While the U.S. and some of Western Europe have made progress – whether large or small – in utilizing new and innovative business models for their news media, the Balkans continue to lag behind. Media in the region seem to be hung up on the good old way of making money through advertising, with the only difference that it has now largely moved online.
Really now, how is that for a sustainable future?
In my thesis “On a crossroads: Entrepreneurship and journalism in the Balkans”, a number of journalists and media experts shared their opinions on the topic.
Oliver Vujovic, co-founder of the South East Europe Media Organisation (SEEMO), set the context:
The most important online source [of funding] is, of course, advertising but if you take the percent of advertising that is going online and that is in the old media, especially compared to TV, it is still a very small amount of money.
He took it a step further to say that online news media in the Balkans are still not profitable, and that while some portals are more financially successful than others, most of them are not able to fund their operations entirely through online advertising.
Two things came up with regard to ability – or lack thereof – of online news media in the region to make money from selling advertising space: (1) many businesses do not yet trust to advertise online, and (2) a lot of the advertising budget in the Balkans is controlled by the state.
First, why the trust issues?
Laurentiu Colintineanu and Hannelore Acarnulesei, both active Romanian journalists, raised an important point when it came to the discussion of making money from online news: If something is on the Internet, then it must be free.
“Everybody is used to the fact that the Internet is free. And if the Internet is free, publicity is free also,” said Acarnulesei. She went on: “People who run businesses are not very open to online yet. They all read news online, but they still don’t trust [to advertise on] it.” The fact that the market is so behind is one of the main reasons Acarnulesei and her husband have to run three bakeries on the side in order to keep their publication going.
The distrust in the online world, however, seems to be characteristic for the most of the region. Larisa Rankovic, journalist and media consultant from Serbia, also believes that there is a certain preference for companies to advertise on traditional media, like TV stations, than on a web portal.
Yet, that’s only one side of the story. The question that remains is:
Where does the advertising money come from?
The majority of the journalists and experts I interviewed agreed that the media markets in the region are still relatively small, and that companies do not have much money to invest in publicity online. The ones that do have a budget would be more likely advertise in traditional media, or on sites like Google and Facebook.
Colintineanu explained that at least in his home country, about 80% of all online advertising goes to the big players (e.g. Google, Facebook, etc.) and the other approximately 20% is distributed among digital publications, online news media being among them. Still, the main problem is that a large part of the advertising budget is often controlled by the state, and most of the interviewees agreed that this is a major obstacle to the growth of online news media in the region.
In Montenegro, for instance, making it as an independent news media outlet is more than a challenge because most of the advertising money is in the hands of the state. Milka Tadic Mijovic, executive director of the Montenegrin news weekly Monitor said: “If you’re independent, you can hardly get money from the advertisers, because advertisement is controlled by those who are in power […]”
In a way, it sounds like being an independent and sustainable online news media is not just hard, but almost impossible should they rely on advertising alone. In Serbia, too, a lot of the advertising money is connected to politics. According to Boban Tomic, docent at the Media and Communications Faculty of Singidumun University in Serbia, explained: “In Serbia, we have several agencies that control 80% of the total annual budget for advertising [… and] a lot of media know very well that if they have access to this budget, they will be able to survive.”
These agencies, he added, are mostly in the hands of political structures or other powerful individuals, who can exert pressure on the editorial line of the online news media that they finance. This is one of the main challenges to the independence of online publications in the country – and the region, yet this challenge will persist until they manage to successfully utilize additional revenue streams.