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Hungary - Footprint of Financial Crisis in the Media (2009)

Hungary - Footprint of Financial Crisis in the Media (2009)

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Published by OSFJournalism
This Open Society Institute Media Program study explores the impact of the financial crisis on media and news delivery to citizens in 18 countries of Central and Eastern Europe and the Commonwealth of Independent States.

The global economic downturn has affected countless businesses across the region, forcing them to slash costs, lay off employees, and reduce output. Media businesses are no exception. However, when media businesses are hit, it is not just their turnover that suffers: their primary function, the delivery of news to citizens, feels the impact too.

To explore the impact of the crisis on independent media and accountability journalism, the Media Program carried out a study in 18 post-socialist countries heavily hit by the crisis: Albania, Armenia, Bosnia and Herzegovina, Bulgaria, Czech Republic, Estonia, Hungary, Kyrgyzstan, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, and Ukraine.

The study looks at media performance in 2009 compared with the previous three years, explores the cost-saving measures taken by significant news carriers, and the effects of these measures on output, breadth and depth of coverage, scope of investigative reporting, and opportunities for open public debate.

Key Findings
Media across the region have lost 30 to 60 percent of their income.
Media were forced to adopt cost-saving measures, including reduced volume, staff layoffs, reduced investigative reporting, and cuts in international and provincial coverage.
Several media markets have experienced a flight of foreign investors and bankruptcies of independent outlets.
The crisis-related constraints and ownership changes have caused an overall drop in the quality of news delivery to citizens.
Media content has become shallower, more entertainment-centered, increasingly isolationist, more prone to political and business influences, and lacking in investigative bite.
This Open Society Institute Media Program study explores the impact of the financial crisis on media and news delivery to citizens in 18 countries of Central and Eastern Europe and the Commonwealth of Independent States.

The global economic downturn has affected countless businesses across the region, forcing them to slash costs, lay off employees, and reduce output. Media businesses are no exception. However, when media businesses are hit, it is not just their turnover that suffers: their primary function, the delivery of news to citizens, feels the impact too.

To explore the impact of the crisis on independent media and accountability journalism, the Media Program carried out a study in 18 post-socialist countries heavily hit by the crisis: Albania, Armenia, Bosnia and Herzegovina, Bulgaria, Czech Republic, Estonia, Hungary, Kyrgyzstan, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, and Ukraine.

The study looks at media performance in 2009 compared with the previous three years, explores the cost-saving measures taken by significant news carriers, and the effects of these measures on output, breadth and depth of coverage, scope of investigative reporting, and opportunities for open public debate.

Key Findings
Media across the region have lost 30 to 60 percent of their income.
Media were forced to adopt cost-saving measures, including reduced volume, staff layoffs, reduced investigative reporting, and cuts in international and provincial coverage.
Several media markets have experienced a flight of foreign investors and bankruptcies of independent outlets.
The crisis-related constraints and ownership changes have caused an overall drop in the quality of news delivery to citizens.
Media content has become shallower, more entertainment-centered, increasingly isolationist, more prone to political and business influences, and lacking in investigative bite.

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Categories:Types, Research
Published by: OSFJournalism on Jul 25, 2012
Copyright:Attribution Non-commercial

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07/25/2012

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Footprint of Financial Crisis in the Media
Hungary country reportCompiled by József Péter MartinCommissioned by Open Society InstituteDecember 2009
 
FOOTPRINT OF FINANCIAL CRISIS IN THE MEDIA2
General state of the media sector
1
 The Hungarian media have been severely hit by the current economic crisis. Advertising revenues,audience shares and circulation data all indicate that the media industry is hard-pressed financially.However, there are huge differences among different media types (see Chart 1
 )
. The printed presswas by far the most stricken, but the electronic media (TV, radio) suffered severe losses as well. Theonline media was hit the least by the crisis; some portals even managed to increase their revenues.
2
 
Chart 1. Advertising revenues in media
The crisis had a marginal impact on the biggest news portals. Indeed, the revenues of some, such asIndex, grew considerably until recently. According to figures provided by the company, the advertisingrevenue of Index increased by 65 per cent between 2006 and 2008, and another 9 per cent from2008 to 2009. Online media is gaining ground at the expense of the printed press independently ofthe financial crisis. A marked expansion in the number of unique users signals this trend. However,according to the most recent and not yet confirmed market information the dynamism of internetexpansion, mainly in terms of revenue, may have slowed down if not reversed.The public service and national electronic media have seen a 10–15 per cent drop in their advertisingrevenues. The audience share of some national TV channels has also decreased compared withprevious years. Public service TV stations lost their significance in the country’s media landscape, butthis is only partly and indirectly due to the financial crisis. Staff levels in the public media have beenslightly reduced but the broadcast time has not been dramatically cut back.
1
This section is based on indicators from the individual media and short interviews with market experts.
2
We limit our analysis to national newspapers and journals, national TV, regional or national radio and online portals above 30,000 dailyvisitors, with original content and staff.
Advertising revenue in different media types
compared to 2006 
 
0
 
50
 
100
 
150
 
200
 
250
 
2006
 
2007
 
2008
 
2009
 
percent
 
PrintTV
 
Radio
 
New Media
 
 
FOOTPRINT OF FINANCIAL CRISIS IN THE MEDIA3
The most severe losses were registered in the serious printed press. Advertising revenues of dailiesand weeklies have dwindled by 16 per cent and 19 per cent respectively, but the loss is even biggerin real revenue terms: it may reach 30 per cent in national political dailies, and the losses may rise to50 per cent in political and economic weeklies.
HVG 
, the country’s most respected political andeconomic weekly magazine, had to face a 34 per cent loss in rate card advertisement revenue in2009 compared with the previous year. The effective loss of advertisement revenue at
Figyel 
ő 
, thecountry’s leading business weekly, may have reached 50 per cent last year. These figures reflect thesharp decline in advertising in three sectors: banking, automobile and real estate.Astoundingly, the economic and business press has been hit even more by the drop in advertisingrevenues than the general-interest print media.
3
Apparently, in a recession advertisers no longerdistinguish between general and higher-status readers with more purchasing power, whereas someyears ago this very distinction was the comparative advantage of the business and economic presswith relatively small circulation, though nevertheless influential, on the advertising market.The decrease in circulation in the serious segment of the print media has been accelerated by thefinancial crisis (see Chart 2). Within one year, from 2008 to 2009, the circulation of the biggest seriousbroadsheet daily (
Népszabadság 
) decreased by 15 per cent, and during the same period the largestweekly (
HVG 
) lost 10 per cent of its buyers.
Chart 2. Circulation of the largest print media
3
For example, the rate card advertising revenues of both business dailies decreased by more than 50 per cent between 2006 and 2009.
Circulation of the largest quality periodicals
 
0
 
20 000
 
40 000
 
60 000
 
80 000
 
100 000
 
120 000
 
140 000
 
160 000
 
2006
 
2007
 
2008
 
2009**first 9 months
 
Average yearly figures
 
Népszabadság
 
HVG
 
Magyar Nemzet
 

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