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Media Sustainability Index (MSI) - Europe and Eurasia

MSI Europe & Eurasia 2008

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Ukraine

Introduction

Overall Country Score:   2.00

In Ukraine’s ongoing political instability, confrontation between branches of power and major political forces, and surprise parliamentary elections in September 2007, the media were a commodity in the fight for power and influence. Previous achievements in free speech and media independence now appear fragile and unprotected: strong legal and institutional protections to make these gains irreversible have not been yet established.

Panelists were rather critical about the media situation in 2007, pointing out many requirements for progress that unfortunately have not been achieved in the media sphere. They rated all five indicators lower than for the last two years, some even lower than in 2004. Ukraine’s overall MSI score was 2.00. The government is still interested in control over media, lacks understanding of independent media’s role in society, and generally does not support it. It pays lip-service to transparency and openness, taking formal yet ineffective measures.

Summarizing the year 2007, Victoria Syumar, director of Institute of Mass Information, stated in Ukrainska Pravda, “There was censorship by government, now it is censorship by money… Before, the censorship by the powerful was performed by the stick. Then those in power came to realize that the stick is too crude, and the journalists were starting to resist. So they started to exercise it with the carrot, as money is much more pleasant, and it is hard to refuse. But we should not forget: this is the same censorship.”

Professionalism of journalists was rated almost at the level of 2004 due to dominance of jeansa, or paid-for editorial content, illegally ordered by political forces, businesses, governmental bodies. Ukraine has never seen such amounts of paid-for materials like during these elections. Panelists also emphasized the general yellowing of press reports, lack of in-depth coverage of socially important topics, increase in self-censorship, non-compliance with professional standards for the majority of numerous Ukrainian journalists and media, and uncoordinated self-regulation of the industry.

Despite developed media legislation, access to public information is rather problematic and judicial practice is dubious. Courts fail to apply European conventions and sums for awarded for civil damage claims are excessively high. Investigations on crimes against journalists are not completed. Broadcast licensing procedures became less transparent and politicized.

Again, there was a lack of political will to conduct the privatization of state media, a serious obstacle for media development and an injustice for taxpayers. Endless talks about public broadcasting did not result in any progress of its establishment.

Media wealth was increasing with continued growth of the advertising market and unexpected profits from elections. The past year saw the next stage of monopolization of the media market, as large players moved towards further consolidation. A serious imbalance in the division of advertising revenue between electronic and print media, as well as nation-wide versus regional outlets remains due to a lack of appropriate audience and circulation measurements.

Objective 1: Freedom of Speech

Score: 1.93

Ukraine still encounters certain problems with enforcement of its seemingly developed media legislation, especially when it comes to access to information. Sums in damage claims awarded against media increased. Licensing procedures became unclear and usually depend on political decisions. State and municipal media subsidized by the government do not have independent editorial policies and create unfair competition to private media. Overall rating of the objective decreased to 1.93, down from 2.25 in 2006/2007.

Ukraine has one of the most developed media law frameworks among the post-Soviet countries, harmonized with international provisions for many years. The law adopted in 2006 provides for application of European conventions and allows recognition of decisions by the European Court.

Still, serious problems of its enforcement remain and state officials and businesses often ignore the law. According to Lyudmila Pankratova, vice-president of the Media Lawyers Association, lately the number of court decisions imposing large sums of moral damage compensation has increased. “Damages up to $10,000 is too much and leads to self-censorship among journalists. More middle level officials sue journalists. One notorious suit for the unheard-of sum of UAH46 million by the EDAPS consortium [printer of secure documents, such as passports] against the newspaper Biznes, filed in November 2007, itself is pressure on free speech,” she said Panelists also mentioned the lawsuit of Slavyansk’s mayor against TV SAT-PLUS for about $20,000.

Sergiy Tomilenko, chief editor of municipal newspaper Nova Doba in Cherkassy added that the number of law suits against media filed by citizens is also increasing. However the trend is not about exercising the right to protection but the desire to receive disproportionate sums for moral damages.

On the other hand, Viktor Danylov, publisher and television owner from Rivne said that after their remarkable victory in a lawsuit by the ex-governor of Chervoniy in 2005, judges in his region are afraid to deal with media and sometimes suits against media are rejected during pre-court hearings. “Sometimes journalists and editors lack enthusiasm to use existing legal protections, expecting red tape and corruption in the judicial system,” he added.

Kostyantyn Kvurt, executive director of Internews-Ukraine, believes that this is an issue of civilization and cultural nature: “The problem is that in Ukraine everything is done for the sake of political forces.”

Licensing of broadcast media was evaluated worse than previous few years. With the adoption of new laws in 2005 there were many expectations of its improvement, but it actually became one of the most shadowy of state regulations. The criteria and algorithm are unclear and it is hard to understand what requirements must be provided to get a license. Practice shows that licensing is often granted for political reasons. It is easy to cancel license. In addition there are publicly known examples of companies working without license for years.

Viktor Danylov pointed to three ‘landmines’ in Ukraine which could bury somebody’s media business at once: spot checks for licensed software, audits by tax authorities, and broadcast licensing. Licenses are granted for five to 10 years depending on specific conditions. Television companies may automatically renew the license if they do not have any warnings. Licenses of television companies that received a certain number of warnings on license term violations can be automatically withdrawn. Despite this, some companies automatically received renewal while having warnings. There are also new provisions on Ukrainian production and Ukrainian language quotas which are hard to follow at the beginning stage and any television channel may be cited for violating them, but enforcement is not equitable.

Market entry and commercial regulations for media businesses are the same as for other businesses. High levels of taxation across industries and many tax administering complications still contribute to shadowy transactions in business. Print publishers enjoy a VAT exemption for sales and subscriptions.

State-owned and municipal media receive subsidies from the state budgets, and sometimes enjoy lower prices for using state-owned printers, transmitters, and other resources. Lacking real budget constraints, governmental media essentially engage in price dumping, a practice that severely hurts private media.

In spite of criminal responsibility for prevention of legal journalist activities, the journalists, in case of violation of their rights, can hardly get the guilty party punished. None of crimes against journalists over the last years has been completely investigated. Lyudmila Pankratova comments that formally the cases against those who prevent journalists from exercising their professional activities are filed, but they are not duly investigated, and courts do not pass sentences on them.

Reports on attacks, threats to journalists and prevention from professional activities are regular, although there were no blatant, high-profile cases in the past year. According to Sergiy Guz, head of Independent Media Trade Union, there was an increase of attacks on journalists (e.g. in Rivne oblast), pressure on media (e.g. Lviv oblast) with the lower level of crime detection as well as reaction on journalists complaints by the relevant bodies. Requests of Independent media trade union usually were addressed by just formal replies of the law enforcement bodies.

“Crimes against journalists gain broad resonance in media, but actually there are no completed investigations and prosecution of the guilty. - said Viktor Danylov. – Impudent burglary in the office of OGO publishing house in Rivne in 2005 with theft of information has not been yet discovered by the local law enforcement bodies.”

The legislation grants privileges to the state owned media compared to private outlets both in access to information and financing. “In fact, private media through paying taxes finances its competition – state newspaper which receives budget subsidies,” stresses print media advisor of Internews Network Oleg Khomenok.

In addition to huge funding from the budget, appointment and dismissal of government media top managers is a political issue. Government journalists have the status of civil servants and relevant increases in pensions and salaries, which are not competitive towards the pay levels of most successful private media in the biggest cities, but can be a significant benefit at the regional level. Kostyantyn Kvurt comments that state media, for which budget spends about UAH350 million to UAH500 million per year, perform purely social function – supporting the army of employees.

For the most part state and municipal media are editorially dependent with rare exclusions. According to Sergiy Guz, the pressure of local governmental bodies on the editorial policy of the state controlled media increased in 2007, especially through financing and staffing.

“The issue of their privatization became overripe – says Sergiy Tomilenko. – Now politicians and businesses are on tenterhooks to snatch something of their property.”

Since 2001 libel is exclusively a civil issue, but the legislation in this area is not perfect and the court practice is worse. Despite European Court judgments and Ukrainian legal provisions the court still may punish for conclusions of an editorial nature made by journalists. Defendants have to prove that they had facts behind their opinions published. The court also must consider the factual basis for editorial opinions, which sometimes it ignores in favor of plaintiffs.

Government officials as plaintiffs receive preferential treatment. Damage sum claims increased, and moreover there is a fee that must be paid to appeals courts equal to 50 percent of the fee paid by the plaintiff in the first instance. Plaintiff’s fees begin at one percent for claims less than UAH1700 to 10 percent for claims greater than UAH170,000. Using the example above, the paper Biznes would have to come up with UAH2.3 million just to appeal should it lose the case in the first court. This structure creates real problems for media already struggling to survive economically and leave them vulnerable to harassment.

Governmental bodies have not become more open and transparent for the public. Access to public information is still complicated and inefficient. There are direct refusals to comment information, and official requests for information are addressed usually by formal and empty replies even upon interference of influential figures. Governmental bodies flirt with media and the public establishing communication departments and press services which produce positive presentations and hold meetings with press rather than promptly provide information essential for the society.

According to panelist Lyudmila Pankratova, legislation on access to information legs behind the international standards. New law on information access is not adopted. Officials do not know and fulfill the existing provisions, but the journalists became more active. Danylov, however, noted that although his journalists persistently and professionally gnaw out information from officials, they still fail to get it many times.

According to the survey of the Independent media trade union, at the regional level there are substantial problems in getting information not only on actions of the law enforcement bodies but also activities and adopted documents of the local government.

Olena Gerus, chief editor of Salon Dona I Basa from Donetsk, comments: “Provision of documents from local officials is connected with red tape and circumlocution. Official requests take several days and do not always lead to timely reception of necessary data. It is easier for journalists to use press releases than to dash against the bureaucratic rock, and this undermines quality of journalism research. Provision of information depends of ‘human feelings’ of an official rather than on legally guaranteed right. ‘This is out of my competence,’ is rather often answer of officials to request on information provision. It would be much easier if the documents are available in the Internet but local bodies make only first steps to follow this practice.”

Access to foreign news sources is not restricted anyhow. The only limit is the level of foreign language proficiency of journalists.

“Entry to the profession is free, meanwhile there are lots of pseudo-journalists, and quality of their materials is awful,” said Yevgen Rybka, content editor of Dossier at Ligabiznesinform.

Objective 2: Professional Journalism

Score: 1.66

Sergiy Guz emphasized significant decrease in the quality of journalism in 2007 up to the level of 2001-2004: “The censorship of temniks was substituted by the censorship of jeansa – paid-for materials. It was mostly evident during parliamentary elections campaign. Many regional newspapers published only paid-for materials and didn’t provide their own elections coverage. News of news agencies, central television channels, radio and newspapers at all levels are for sale.”

At the end of year a group of well-known journalists launched initiative “We are not for sale!” Monitoring major television news they rate and announce the largest amounts of jeansa naming clients as well as corrupt journalists.

MSI panelist stated overwhelming level of jeansa in media and yellowing of press, lack of professionalism and non-compliance with professional standards by majority of journalists, increase of self-censorship. Overall, Ukraine was ranked at 1.66, down from 2.06 in 2006.

Panelists agreed that due to free entry to profession, low standards of journalism degree programs, lack of self-regulation among journalists, there are too many unprofessional journalists who do not comply with basic professional standards. Panelist Konstyantyn Kvurt said that there is no critical mass of truly professional journalists in the industry. “Majority of journalists do not correspond to the accepted standards. Real big money is paid for violation of standards, political orders, – he emphasized. - Relevant standards are paid for by just a salary. Media do not serve public interests as they gain money from business and government.”

Panelist Olena Gerus added: “There is significant difference between publications in large and small cities, in the capital and the regions. For small regional publications Internet access with sufficient volume and speed is exclusion rather than a rule. Information search skills are insufficient. There is a tangible difference in approaches of the younger journalists (under 25-30 years old) and those who started to work in Soviet times. The ‘old guard’ tends to use approach when more analytical coverage prevails; meanwhile they usually ignore opinions of all the conflict parties. The lion’s share of news is just a description of press-conferences and accordingly it reflects points of views expressed there.” By comparison, panelists felt that younger journalists are free from ‘Soviet’ traditions, more relevant to modern practices and more willing to change and learn. However, there are stories of younger journalists working for ‘old-fashioned’ newspapers who follow the practice of opinionated coverage.

“Journalists themselves demonstrate that they are not ready to comply with professional standards and resist the attempts of pressure on editorial policy, especially when it is about materially stimulated publications,” said panelist Sergiy Tomilenko.

Ethical standards in Ukrainian press are not complied with in the majority of publications. Only small group of regional and national media implemented and uses professional standards, but this is not the case for state, partisan and corporate press. Panelist Viktor Danylov said that a lot depends on management – in his media it is forbidden to publish stories lacking different points of view, ethical standards are obligatory and journalists can’t receive awards from government and various gifts.

“The issue of gifts to journalists has just started to be discussed in journalists’ community and journalists recognize that ‘souvenirs’ do not oblige them to cover this or that event in favor of a grantor,” commented Olena Gerus. “However, not all media practice strict limitation of the acceptable gift value. Therefore each journalist makes his own decision as to accept, for instance, iPod and how his ‘gratitude’ would influence the quality and accents in his material.”

“Self-regulating journalists’ organizations are not developed enough therefore there are no levers to influence unethical and unprofessional journalists,” emphasized panelist Lyudmila Pankratova. “Ethical standards are developed but, according to many journalists, there is no need to follow them.”

Compliance with the ethical standards decreased and corruption among media managers and journalists has grown. Panelist Gennadiy Sergeev, director of TRC Chernivtsi, mentioned that he perfectly knows the pricelist how to get in news of almost all national channels. According to interview of Viktoria Syumar, expert of the Institute of Mass Information, to Deutsche Welle, two-minute news report costs about $5,000, pre-recorded or live air – $50,000 to $70,000 during election campaign.

There were few high-profile scandals connected with attempts to establish censorship in media (e.g., the forced resignation—later retracted—of Ihor Slisarenko at Channel 5 television after he reported on the cost of education for the president’s children) and pressure on the editorial policy of Gazeta 24 by its ownership (which includes a political party leader) that resulted in the resignation of Editor-in-Chief Vitaliy Portnikov (the scandal in newspaper “24” during elections).

According to panelist Oleg Khomenok, self-censorship is practiced by all media outlets; there is a trend of moving the untouchable topics from politics to business: journalists recognize that cannot publish stories on the problems of large advertisers, as publishers are afraid to lose advertising budgets. Increase of advertising budgets enlarges dependence of content on the preferences of the advertiser. Judicial practice also favors self-censorship: guessing how a court might treat a potential case results in journalists choosing to play it safe.

“Self-censorship among journalists and editors sometimes exceeds the scale of real dangers for them, but examples of Aleksandrov’s and Gongadze’s deaths speak for themselves to deny self-censorship today.” said panelist Viktor Danylov. “However, we still have to weight every word in the stories on sensitive issues; otherwise we are in danger of pressure and lawsuits.” Legal restrictions for media to agitate for candidates caused new type of self-censorship – many newspapers and television channels publish only paid-for materials or purely informative stories without any analysis in fear to be prosecuted by the law. At the same time jeansa on elections also found its way to the readers and viewer through the same media.

Taking into account high level of self-censorship and censorship, not all important issues are covered. Panelist Kostyantyn Kvurt added other reasons of that: inaccessibility of information, low level of journalists who are not able to write in-depth analytical stories. Experts also mentioned further yellowing of press reports towards news like “a crocodile run away from the zoo,” instead of coverage of socially important topics.

Natalia Ligachova, chief editor of Telekritika magazine, criticizing jeansa in her articles, drew attention of journalists that they are bribed for topics which they should have covered for free. Public relations workers have complained many times that it is impossible to get coverage of issues, even those that are essential to the public interest, without paying media outlets for the coverage. She mentioned example that all media kept silence in October on a number of serious international statements about the scale of corruption in Ukraine threatening its democratic and economic development as well as national security.

Panelists were unanimous that level of corruption doesn’t depend on the salary level of journalists and it is so high that any salary would not be enough. The salaries in media sphere have substantially grown but remain in shadow: the lesser part of the salary is received legally; the rest is paid in the envelope. According to panelist Oleg Khomenok, publishers try to minimize taxation but also it gives them additional control over the journalists and favors corruption.

Salary of journalists in the regions is not competitive and the best professionals are grabbed up by the Kyiv ‘vacuum-cleaner’, including by public relations firms and media relations positions with business or government. In addition media, sponsored by the state and politicians, sometimes establish economically unreasonable excessive salary rates which also increase inequality at the labor market. “Profession of journalist in the regions is rarely considered as prestigious and well paid one and therefore it rarely attracts prospective professionals who are able to become successful media managers,” stated panelist Viktor Danylov.

Generally, optimal balance between news and entertainment is maintained. There are specialized news channels and radio stations. Deeper segmentation of media continues. The share of political, news information, discussions and analysis is generally noticeable, and it’s inherent to Ukrainian press. It became especially obvious after the Orange revolution of 2004. Panelist Kostyantyn Kvurt mentioned the dominance of entertainment programs of Russian origin having a negative impact on the Ukrainian market. By crowding out programming from other countries, he felt that this hurts both general education of the viewer and limits professional development of media professionals who are then not exposed to new ideas from other markets.

Technical facilities and equipment is available and affordable, however is more expensive than in western countries. Media is better technically equipped than years before. According to panelist Yevgen Rybka, technical level of media is sufficient to produce normal products; technical as well as methodological aid might be focused on public television establishment.

Quality specialized reporting exists. Certain media segments grow and niche reporting has become more noticeable lately, especially business and economic journalism. The share of investigative journalism is small, and the quality of investigations is low. According to Viktor Danylov, investigations are time consuming, and demand for them, benefit to society, and commercial dividends are not obvious to top managers. However, the amount of investigative stories has gradually increased and public interest in them has developed as well, a promising sign for further development of this genre.

Objective 3: Plurality of News Sources

Score: 2.16

Plurality of various news sources received the highest score among all other objectives, but still it was rated lower– 2.16, compared with 2.34 in 2006. The situation with independent news agencies, own news programming of broadcasters and representation of various social interests in media, including minority-language news sources, was evaluated at the same level as previously. Panelists were much more critical about the issues of disproportion of news sources availability throughout Ukraine, lack of transparency of media ownership, bias and outdated practice of the state-owned and municipal media, servicing governmental and political interests, which were rated much lower than before. Access of citizens to domestic and foreign media, which is not restricted, was perhaps underrated by panelists as part of their overall critical mindset.

News sources, including independent news agencies and television channels with their own news programming, are numerous. However, due to economic situation, the majority of citizens tend to consume information from a limited number of media. According to Viktor Danylov, many people in province subscribe for just one newspaper and often select it by the cheapest price. And in this case private newspapers are in unequal conditions compared to the state controlled media subsidized by the state. In distant villages the viewers are able to watch just a few television channels. Internet news is consumed primarily by citizens of large cities.

According to Internet World Stats, in 2007 the level of Internet penetration is 11.5 percent with 5.28 million users. According to InMind company research, 5.3 million Ukrainians use the Internet, the share of users in the towns of more than 50 thousand inhabitants is about 30 percent. The largest percentage of users is in Kiev – 49 percent of all population. 50 percent of Internet audience is 20-34 years old people. Some other sources estimate 8 million Internet users in Ukraine.

“Access of a citizen to objective information depends rather on his/her ability and desire to use and analyze information from different media,” emphasized Olena Gerus. “Names of media owners are not a secret, citizens know them and discuss whose newspaper Segodnya is and whose Inter TV channel is. They know that they can expect more than usual sympathy to the Party of Regions from TRC Ukraina and more orange coverage from 5 kanal. And the difficulties to watch 5 kanal in the Eastern Ukraine like two years ago do not exist anymore. In the province, villages and small towns, the situation is worse: limited or no access to cable television, numerous newspapers (moreover foreign media), and the Internet.”

Citizens in larger cities have greater access to media sources. Ability to use numerous sources of news depends on geography: in Chernivtsy oblast there are lots of satellite dishes even in small villages where there is a problem of transmitting signal over the mountains, but this is not the case in Eastern Ukraine. The situation can be different even in one oblast: in the central part of Rivne oblast there are up to 50 cable channel, but just few in the north, one local radio in the city and up to 40 radio stations in the mountains.

According to Yevgen Rybka, often, in order to get a full objective picture of an event or trend, one should use several media. At the same time different publications may mutually exclude each other, like on activities on the Tender chamber of Ukraine responsible for state procurements.

Citizens’ access to domestic or international media as well as news sources in the Internet is not restricted and totally depends on people’s interest, welfare as well as knowledge of languages. Share of Russian publications and availability of Russian television channels are significant. Western press is available but not widely represented due to language barriers, lack of demand, and cost.

Still, there are no public media in Ukraine. Again, establishment of public broadcasting as well as privatization of state owned and municipal newspapers failed this year due to the lack of political will, new wave of political confrontation and extraordinary elections, which was regarded by panelists as one of the most negative aspects of media development in the country.

“State and municipal media do not provide consumers with objective information on a broad range of events, - stated Viktor Danylov. - They are controlled by power and politicians who use them for their purposes, especially during election campaigns. This doesn’t contribute to balanced informing of local communities. These media are biased, prejudiced, rarely present alternative opinions and prefer paid-for stories. The majority of their editors lack skills as well as will to work in the market conditions, they are conservative, rely primarily on governmental support and do not grow professionally.” They also neither cover topics ignored by commercial media nor promote cultural and educational issues.

A case highlighting the political influence in public broadcasting involved the UT-1 show Toloka. On March 20 a planned broadcast that included opposition leaders was canceled and the president of UT-1 Vitaliy Dokalenko stated that the program would be dropped in the future. The program’s moderator was accused of un-professionalism (falsification of interactive voting) and hidden advertising for the opposition. The station’s president first said this was the correct action but later on insisted on the renewal of the show after an internal investigation. The program was back on the air in two months with a new anchor. The media community treated this case as outright censorship.

According to Sergiy Tomilenko, media outlets founded by the state bodies are the least protected from direct pressure of the power. These media are hostages of the political situation in their district. New local deputies, usually lacking basic knowledge of media legislation, which restricts interference of media owners and founders, start to reform editorial statutes for better controllability of municipal newspapers. Whoever governs locally, the ruling party or opposition, it tries to influence editorial policy. One the other hand, he mentioned example when Cherkassy oblast state television has become a true democratic tribune open for all forces due to personality of its top manager and his victory in the conflict with local governor. Meanwhile a colleague from Western Ukraine mentioned local state television, staffed with about 280 employees, which broadcasts primarily old archives and covers primarily local governor in news programs for four hours daily.

Sergiy Guz explains increased dependence and bias of the state controlled media by aggravation of the political situation in the country.

The major nation-wide news agencies are private Interfax-Ukraine, UNIAN, Ligabiznesinform and Ukrainski Novyny as well as state owned DINAU-Ukrinform financed from the state budget. They distribute news to all media at non-discriminatory fashion. Large media can afford to subscribe for national and sometimes for international news agencies. Small media sometimes found, that subscription to them is not cost effective when they can get most news for free from numerous news websites. For the major part the sources are referenced.

Independent broadcast media produce their own news programs. Regional electronic media who care for ratings can’t ignore their own production. State owned broadcasting is of lower quality and serve primarily those in power.

There is no progress in issues of media ownership transparency. Media ownership transparency is not provided by the law. The draft law developed by the Committee on freedom of speech and information of the Parliament has not been adopted. According to Sergiy Guz, vice versa the situation becomes more intricate. One of the brightest examples is new staffing of Inter channel. The same dubious situation is with Studio 1+1 channel. Kostyantyn Kvurt mentioned that today we know more about ownership than three years ago thanks to NGOs’ efforts. However, the panelists recognized that experts rather than all citizens are aware of alleged owners and can judge objectivity of news. Foreign investment in media, especially in electronic media, is not favored (there is a 30 percent limit of foreign ownership share) but exists. The entry to this market, by local or foreign actors, is not easy. Large media holdings exist and competition is insufficient to satisfy consumer needs.

The television market is monopolized by a few large media holding companies. U.A. Inter Media Group, whose shareholders are unknown, owns Inter channel (61 percent), Enter Film (90 percent), 90 percent (Enter Music), channels K1, K2 and Megasport. Central European Media Enterprises (CME) owns Studio 1+1, 1+1 International, Kino, City. Viktor Pinchuk, son-in-law of ex-president Kuchma, owns Novyi, STB and ICTV channels and uniting them in one holding.

In January 2008, Agora Ukraine, a daughter company of Polish Agora S.A. (Gazeta Wyborcza, blox.pl), announced launch of the blog platform in four languages in Ukraine Blox.com.ua.

A broad spectrum of social interests are reflected and represented in the media, including minority-language information sources. Major nation-wide newspapers are published in Russian. Some publications produce two editions – in Ukrainian and Russian while other mix two languages in one edition. Small circulation publications serve national minority communities on their native languages: Crimean Tatar, Jewish, Bulgarian, Roma, Hungarian etc.

Objective 4: Business Management

Score: 2.15

All indicators were evaluated by the panel much lower with the overall objective 4 rate falling from 2.93 in 2006/2007 to 2.15. Although mainstream media outlets operate as profit-generating businesses and increase their management professionalism the panelists noted problems with distribution and subscription infrastructure, oligopoly at the media market at the level of capital city, lack of reliable audience research for regional media, disproportion in advertising flows in electronic and print media, unfair practice of central advertising agencies towards regional media as well as sensitivity to paid-for news coverage and shadow schemes of cooperation with governmental bodies.

Mainstream media in Kyiv and the regions use business plans, use skillful marketing, and utilize professional practices in financial management, accounting, personnel management, and advertising sales. According to Lyudmila Pankratova, disparity in development of central and regional media remains. There are outliers using outdated practices, even in Kyiv. Further, the lack of independent market research covering the regions contributes to this situation.

Ukrainian media business steadily grows with the increase of advertising money and professional competition. And the industry has world class professionals who can share their experience with other countries. More and more private printing facilities are available and their services improve for the most part, with newsprint prices being higher than in Sweden or Finland.

However, the infrastructure of press distribution remains awful: Ukrposhta and Souyzdruk, raising their high tariffs, are not efficient for publishers. Private distribution networks are not developed and efficient enough and also dictate prices to the publishers. According to Viktor Danylov, it is hard to imagine morning or evening newspaper in Ukraine and his daily Rivnenska gazeta is delivered to villages once a week (three issues together – on Thursday). Running his own print press, he can easily increase the number of pages depending on advertising volume, but Ukrposhta would refuse to distribute it or appoint such a high price that it becomes senseless. Newspapers face expensive entry requirements to be distributed in supermarkets. Danylov believes that distribution system is a serious hazard to the press and trade associations fail to solve the problem.

Broadcasting depends on the state monopoly – transmitting concern RRT which dictates its tariffs.

Despite obvious disparity between national and regional as well as broadcast and print media, the panelists admit that those who want to make money and have adequate capabilities gain significant profits. Viktor Danylov mentioned that annual advertising increased 70 percent at his regional television station. Across Ukraine, in-house television production, both for own use and to sell to third parties (e.g., documentaries) also increased.

Successful regional publishers diversify their businesses running general interest and various niche publications, distribution and delivery bureaus, printing presses, advertising agencies, sometimes they also run radio or television stations.

However, the market is still fragmented with numerous small and unprofessional players sponsored by government and politicians who influence their editorial policy. On the other hand, the pressure of advertising money leads to domination of jeansa and censorship related to business interests in private media as well.

“Those journalists and media outlets which few years ago would resist any governmental pressure for the sake of truth and objectivity, today often exchange their principles for advertising budgets of clients. – stated Sergiy Tomilenko. - Underdevelopment of the regional market of commercially successful media leads to the fact that media space is extremely sensitive and ready to publication of any paid-for information. Cynical and disrespectful attitude towards editorial independence is often a standard for influential politicians, businessmen as well as officials.”

According to Lyudmila Pankratova, advertising is excessively regulated by the law and this impedes the development of advertising market in the regions. This became a standard on television when 15 minutes bloc of commercials interrupts movies or programs while abroad 1.5 minute bloc is a maximum. Media inflation is high, efficiency of television commercials spots decrease.

Viktor Danylov said that lack of audience research that would adequately represent regional media, its closer relevance to and trust of the regional audiences, unfair practice of advertising agencies which do not care about efficient placement of advertisers money lead to monopolization of the advertising market by few largest national channels. Industrial Television Committee was established long ago, unites the largest 11 television channels, which now cover about 70 percent of audience. It lobbies their interests and combines efforts in market research. Radio Committee, established in December 2007 by three largest radio holdings (Ukrainian Media Holding, TAVR Group and Group M) and three network advertising agencies, aims at improvement of radio audience measurements and introduction of digital radio broadcasting. Managing partner of the Radio Committee is Independent Broadcasters Association.

In successful mainstream media the share of advertising in total revenue corresponds to accepted standards and continues to grow. According to the All-Ukrainian advertising coalition, the media advertising market totaled $1,159 million, up 35 percent from 2006. Political advertising share was $88 million. Television advertising market reached $472 million, up 33 percent from 2006, including the share of regional television of just $32 million. In addition, television sponsorship market was estimated at $75 million, up 12 percent from 2006. Press revenues increased by 30 percent, totaling $230 million. Major portion ($153.6 million.) went to magazines, and the rest – to newspapers. Advertising market of regional press segment is estimated at $38.5 million with more than average growth rate of 31 percent. Radio advertising grew to $34 million, up 28 percent from 2006. The Internet advertising grew by 100 percent to $12 million.

Although there are no official subsidies for private media from state bodies the panelists admitted that there are shadow schemes when many private media can receive some support from the government. State bodies used to announce various competitions for their coverage and grant money to key media outlets. According to Sergiy Tomilenko, there is a practice when local government allocates essential funds for the agreements on governmental coverage in mass media. Such agreements usually lead to neutralization of critical media coverage. If a strong and stable private newspaper like Vechirni Cherkassy with 80,000 copies can print some critical stories about the governor on one page and put his PR stories on the other according to the agreement, less strong players in this case would refuse from critical materials at all.

Lack of reliable ratings and measurements of media is the biggest problem for media development at the regional level. Available nation-wide media measurements for the most part do not account for regional media enough. Market leaders do their best to conduct market research on their own, some regional outlets pay for expensive professional surveys, but are not happy that trade associations didn’t manage to launch syndicated research for its members. This way regional media lose in competition with national outlets and develop their products at random.

According to Oleg Khomenok, market research is the regular practice for the majority of successful publications, but there is a problem of application of these results by national advertisers. There are several nation-wide research companies doing media survey but only one of them – TNS Ukraine has media-planning software Galileo developed in Russia with a monopoly of its application in Ukraine. Galileo is used by large advertisers and agencies in planning and placement of advertising budgets and ensures TNS Ukraine actual monopoly at the media research market.

Olena Gerus said: “Research of audience, its needs and preferences is one of the weakest aspects of Ukrainian media space. My newspaper, Salon Dona I Basa, can’t afford an expensive in-depth survey of the readership, and grudges to spend money for a superficial one. Doing surveys on our own is fraught with incompetent approach and large errors.” In contrast Sergiy Tomilenko, chief editor of one of the model municipal newspapers, noted that he tries to follow readers’ needs with low-cost methods and adjust the products accordingly.

Almost all Ukrainian press lie about circulation figures, and attempts to establish reliable audit bureau of circulations fail. Advertising agencies do not seem to be interested in getting reliable circulation figures as well. Broadcast ratings, according to Kostyantyn Kvurt, are produced independently but not reliably. The problem is that several major channels united in the Industrial Television Committee ordered the all-Ukrainian television ratings at GfK with the aid of people meters. For all of Ukraine it is reliable and independent. However, sampling in the regional cities, some managers complain, inadequately reflects the situation with regional channels that are named in category “other regional channels.” Even the regional leaders do not receive adequate ratings, their managers feel. People metering is very expensive and is not affordable by regional television companies. They complain it is a conspiracy between huge national television channels and marketing agencies. In this situation, without reliable data, regional television cannot attract media advertising agencies who would bring larger advertisers.

Objective 5: Supporting Institutions

Score: 2.09

Panelists rated this objective at 2.09, down from 2.37 in 2006, being primarily upset with failure of media associations and journalists’ unions to lobby the interests and stand for the rights of their members, no progress in improvement of inadequate journalism education as well as hazards of distributions systems for the industry.

Media associations were more active in previous years while implementing numerous donor-funded projects. The main drivers were the executive management of associations which applied for projects and then asked the opinion of membership on whether the projects were priorities for them or not. Only in recent years have associations gone to their members to urge them to initiate activities. With numerous assemblies of members, and some management reassignments in 2007, the associations went through an internal process to reevaluate their role, functions, priorities, standards, etc. However, in some cases members could not come to a consensus on what they wanted. On the other hand association members are rather critical about efficiency; even at the MSI panel some claimed that associations did nothing in terms of lobbying and protecting their interests.

In general no one is personally guilty of bad management, too often members fail to combine their efforts and articulate their interests. According to Sergiy Tomilenko, “Professional community is not developed and sustainable. In resolving problems media outlets usually rely on themselves rather than professional associations. Certain issues are taken care of by National Union of Journalists, Independent Media Trade Union as well as associations of publishers and broadcasters.”

The Ukrainian Association of Press Publishers as well as Independent Association of Broadcasters experienced an evolutionary processes of self-determination, reformation, and attempts to work on new strategies. In spite of blames of the associations’ members in inactivity, lack of lobbying and protecting of their interests, absence of adequate syndicated market surveys and other united efforts, both associations shifted from the managerial initiatives of their executive bodies to the representation of the interests of their members. Legal consultations and training courses for the members remained key activities in 2007.

Kateryna Myasnikova, the executive director of IAB, said that several years ago both associations were established with the aid of international organizations, that was timely and adequate initiative, and their activities were launched primarily by directions of associations. Direction would make decisions to implement some donor-funded projects and tried to persuade its members in its usefulness. Now they try to appeal to the general assembly of members so that they initiate the strategy, planning, and budgeting.

UAPP general director Oleksiy Pogorelov admitted that the general assembly of publishers was rather unmanageable in 2007. Two groups of interests have formed: those of the largest media holdings tending to further consolidation and smaller media. UAPP members tried to define their interests and further strategy of development. Publishers fail to find consensus on many issues, and this mirrors the market development. Largest nation-wide publishers tend to set up an industrial committee to pay and order syndicated surveys which they want.

Association of Independent Regional Publishers of Ukraine also worked on its further strategy with foreign consultants and was rather inactive in 2007.

The two major journalists’ organizations (the National Union of Journalists and the Independent Media Trade Union) often cannot adequately influence negative situations, especially on economic rights of journalists. As Sergiy Guz said, journalists are not able to counteract interference with editorial policy, illegal dismissals, half-legal or illegal employment and salaries.

National Union of Journalists of Ukraine, traditionally the largest and outdated, needs reforming. Tomilenko mentioned example in Cherkassy oblast where local division of NUJU changed management and unite efforts in protecting journalists rights while in other regions NUJU act more as club for pre-pensioner journalists who worked for decades in state owned media.

According to Viktor Danylov, there are still no truly efficient and independent professional associations of journalists in Ukraine which would provide legal, professional and informational support. Kateryna Myasnikova adds that the journalists lack understanding of the purpose of uniting their efforts. The personal benefit of each member in mass organization is not obvious and professional standards are not developed enough so that journalists would feel the need to protect them together.

However, the Ukrainian journalists unite efforts from time to time reacting on the most outrageous events against profession and colleagues.

There are many central and regional media supporting NGOs, such as Institute of Mass Information, Academy of Ukrainian Press, Media Reform Centre, Regional Press Development Institute, Association of journalists of south Ukraine “Pivden” (Kherson), Journalisms Initiative (Kharkiv), Poltava Media Club, Media Professional in Cherkassy, Information and Press Center in Simferopol, Association of Free Journalists in Crimea, Guild of Vinnichina Editors, etc. Media Law Institute and Association of Media Lawyers deal with media legislation and legal protection of media and journalists. Almost all of them rely on financial support of international donors.

Lyudmila Pankratova believes that, activities of the media supporting NGOs are still needed as media and associations are not well developed enough. Free of charge workshops on legal issues are in demand as these issues are largely beyond available training programs. With cut of donor funded programs journalists lost many training opportunities, but the greater concern is lack of workshops for judges, who are rotated - the ability to influence practice of judges through educational activities reduced.

Katerina Myasnikova noticed dangerous trend that with reduction of international donor programs some NGOs have to curtail their activities. There is a lack of governmental support and locally nurtured donors for the third sector. Konstatin Kvurt emphasized that the major problem is “a lack of articulated and understood state interest in development of the third sector. If the state of Ukraine declares democratic values, it has to support then in cooperation programs and finance.” But generally, according to Kvurt, Ukraine has considerably better developed third sector than any other country of the post-soviet space.

Journalism degree programs remain noticeably distant from the needs of media market. Curricula are outdated, professors primarily do not have media background and the graduates’ skills are not appreciated by the industry. The market compensates its need in professionals through short term seminars and training programs

According to Sergiy Tomilenko, just a few academic programs in Ukraine implement the model of modern journalism education – Kyiv-Mohyla Journalism School which annually graduate 20 master degree holders and JORNA project (Journalism Education Reform: media skills development) which gave impulse to an improvement and produced several modern handbooks.

“Donetsk, a city with a million population, has two journalism departments. Both are ‘young’, without traditions and experienced professors,” said Olena Gerus. “Links of universities and media are limited to the summer practice of students. Each year journalism departments produce a bunch of students who have slight ideas of journalist’s job. Their theoretical knowledge originates from old handbooks; general outlook is lower than required. Interest to news is substituted in their minds by the desire to write. Among the interns of our newspaper, almost all recognize that do not read newspapers, have problem in identification of important public figures, classification of the power branches, sources of information, news worthy events and information important for the public.”

Paid-for and free short term training courses on various aspects of media operation are available to media employees. Free courses are limited. The number of those who can afford paid-for courses has risen. Broadcasters complain that not all topics are offered, such as courses on television advertising sales.

Workshops are paid for primarily by employers who often complain that they invest in personnel who then leave for better paid jobs in the capital. And there is no tradition to compensate for headhunting transfers of staff. On the other hand, according to Kostyantyn Kvurt, “free of charge workshop is a crime against journalism standards and market.”

“Every quarter we budget certain amount of money so that couple of employees can be trained,” said Viktor Danylov. “Part of independent media conducts in-house training courses for future journalists. Graduates of such programs recognize that during 10 to 12 training days they learn more about practical job of a journalist more than during years of academic education.”

According to Olena Gerus, the state does not restrict printing and distribution and few instances (such as the attempt to take away newspaper stands from Kyiv metro) excited broad public outrage against this. Newsprint and printing facilities are accessible except for the only restriction – permanently growing prices. Due to constant change of export rules and corruption at customs newsprint is very expensive. Printing facilities are not the issue of politics. There are many private printing presses and their number increases.

The print distribution system is still problematic. Two monopolies – the state owned post office, which primarily handles subscription, and the networks of Soyuzdruk kiosks are inefficient for publishers and dictate conditions and prices. Supermarkets also have expensive entry requirements, including signing fees, rental of shelf space, per-product code fees, and percentage of sales fees, among other. Broadcasting transmitters are managed by the state controlled RRT, which dictates high prices, media managers feel, but to date has not been used for political purposes. The announced introduction of digital television is supposed to be implemented by the state.

According to Viktor Danylov, distribution system both in print and broadcast area can destroy somebody’s business at once – by unexpected price increase. “We had approved annual budget and signed agreement with transmitting facility, but on December 28 we got a notice on price increase and all our plans were ruined. Or we sold one year subscriptions, when Ukrposhta in March again increased its tariffs.” he said.
 
“The power can keep control over press distribution, for instance, through the municipality decisions on allocating land for kiosks,” commented Oleg Khomenok. “In Ternopil representatives of one political force with majority in local council, attempted to get out one newspaper of newsstands threatening to cancel the permission of press sales.” The paper Litsa Dniepropetrovsk suffered at the hands of Ukrposhta after they wrote a story on a criminal investigation of that city’s mayor. The post office first refused to deliver the paper, and then delivered it to its offices and kiosks with a 10-hour delay after Litsa made an official request. The post office finally canceled the contract for “technical reasons” so that a new one could be signed with a different department. However, a rumored change in financing of the paper has resulted in an end of these difficulties.

Panel Participants

  • Sergiy Guz, chairman, Independent Trade Union of Journalists, Kiev (questionnaire only)
  • Oleg Khomenok, print media advisor, Internews’ Network U-Media program, Kiev (questionnaire only)
  • Kostyantyn Kvurt, executive director, Internews-Ukraine, Kiev
  • Natalya Ligachova, director and chief editor, Telekritika magazine, Kiev (questionnaire only)
  • Oleksiy Pogorelov, general director, Ukrainian Association of Press Publishers, Kiev
  • Yevgen Rybka, content editor of Dossier section, Ligabiznesinform, (www.liga.net), Kiev
  • Sergiy Tomilenko, chief editor, Nova Doba, municipal newspaper, Cherkassy
  • Olena Gerus, chief editor, Salon Dona I Basa newspaper, Donetsk
  • Viktor Danylov, director, publishing house OGO, Rivne
  • Gennadiy Sergeyev, director, TRC Chernivtsi, Chernivtsi
  • Iryna Tuz, journalist, Novynar magazine, KP Publications, Kiev
  • Lyudmila Pankratova, vice-president, Media Lawyers Association, Kiev

Observer: Kateryna Myasnikova, executive director, Association of Independent Broadcasters, Kiev

Moderator: Kateryna Laba, executive director, Regional Press Development Institute, Kiev