The Media Markets

2.1. The Norwegian Media Market: History of Development

After World War II the traditional party press, the mostly family-based ownership structure and the NRKpublic service broadcasting monopoly remained the same for some time. From 1960 until 1980 Norway was ruled by the social democrats and media subsidies emerged during this time. The parliament decided, for example, to give certain newspapers subsidies (Helgesen & Gaustad 2002). Those decades are nowadays in hindsight seen as the “age of innocence”. Østbye thinks that there had been a certain variety of media, since one owner mostly owned one newspaper company, the state-owned monopoly NRKwas democratically controlled and there was also a variety of larger, medium-sized and smaller book publishers. (Østbye 2000: 45) Nevertheless the first steps towards concentration of ownership were taken.

In the cities there were highly competitive markets with two to four newspapers with different points-of-view. During the post-war decades the smaller, so-called “no.2 papers” were closed, bought up or merged with others, due to the strong competition in the advertising market. The larger papers on the local market often received the most advertisements. At the same time, the content of the larger newspapers was homogenised and they got disconnected from the political parties, in order to get access to a larger local public and market. On the other hand, new businesses were started in the districts, so that the number of papers grew. All these facts are leading Østbye to the conclusion, that the early concentration on the Norwegian newspaper market was not because of the development of newspaper chains, although today’s largest actors started quite early with the first merges. But more because of the growing part of the all-Norwegian paper circulation: first the regional and then the papers in single copy sale had a steady larger share of the circulation. If the five largest newspapers had 1/4 share of circulation in 1952, then in 1999 their share increased to 1/3.

In 1981, when the NRKmonopoly ended, there was only one radio and one TV channel in Norway. The following years were a quite lively period for the Norwegian media landscape. Media became interesting investment objects, instead of

being driven for mostly ideological reasons all the previous years.²Three groups developed that later became the most important for the Norwegian media market: A-Pressen, the Schibsted Group and the Orkla Media Group. While the first two had a long history on the newspaper market and grew in to chain and multimedia ownership, the Orkla Media Group was founded as part of the large Orkla Group, which had its tradition in mining in Norway but was also engaged in a variety of other industries.

The A-Pressen group was founded to control and help the newspapers in the labour movement after a proposal of 1937 and played an important role in restarting all the “traditional” labour papers after the Nazi occupation. In the following decades the papers were bound to the party and the national Labour Union, and they shared editorial content as well as the means of production for example in order to subsidise the smaller and weaker. Østbye refers to the A-Pressen of those days as acting as as a group, although most of the newspapers were formally independent having their own local owners.

In 1989 the A-Pressen formally became a trust, while not every associated paper agreed with this decision. While the Labour Union held all the stocks in the first years, new actors such as international investment banks and the Norwegian importer of VW-cars arrived on the scene in 1993/94.

The Schibsted group has its roots deep in the Norwegian press history, being founded as the newspaper company Aftenposten by a printer in 1860. For decades that was the only business, until later larger book publishing activities were added. Until 1981 the Aftenpostenhad the highest circulation of any daily newspaper in Norway. When Schibsted acquired the tabloid paper VG in June 1966, they of course could not have known that this would guarantee their “pole position” on the newspaper market until today. The paper, started in the post-war years, owed the company money and the choice was whether to take them over or to lose the money for certain. VG is today the most popular tabloid and single copy sale newspaper.

The state monopoly of broadcasting finally ended in the 1980s. Local Radio and TV stations were opened, and privately owned stations on the national level also became possible.

2.2 The development of the media market in the Baltic States: from transition to development

The Baltic media economy underwent a change of economic paradigm since the end of the 1980s. The Estonian media researcher Taivo Palju (Paju 2004) has used the following periodisation concerning the changes in the Estonian media market:

I period (1989–1995): establishment of the first privately owned media enterprises, birth of the advertising market, privatisation and commercialisation of the periodicals and channels that already existed during the Soviet time II period (1995–1998): tough competition and the formation of corporations

III period (1998–2000): huge losses, economic crisis, foreign investments

IV period (since 2000): stabilisation concerning the Estonian language media market, negotiations between corporations, convergence of different media and telecommunications.

This periodisation pinpoints three important issues. First, up to 1998 the Estonian media market was blooming and competition among newspapers was especially tough (price wars, subscription campaigns etc.). Secondly, since 1998 foreign ownership became dominant. In 1996 advertising expenditure increased by 20%, 22.8% in 1997 and 15.9% in 1998. However, in 1999 advertising expenditure decreased by 13%. Since 2000 advertising expenditure has grown steadily (World Press

2 Discussion about media being seen as “stock exchange” or “cathedral” (Østbye 2000:58f).

Trends 2004: 139). Thirdly, although Palju does not mention it, today we can assert that the process of concentration began in 1998. For example from 1999 up to 2003 the number of daily titles has decreased by 35.29%, non-dailies titles have decreased by 6% (World Association of newspapers-World press trends 2004:137).

As in other post-socialist countries, the sectors within Estonia’s media market witnessed great fluctuations in the 1990s and then towards the end of 1990s the Estonian media landscape stabilised (see also Saks 2002: 187–206). Since the beginning of the 1990s until 1998/99 press and television stations invested and lost money. The decade is sometimes labelled as a “money-burning” period. Spending cuts started since 1998/99.

In neighbouring Latvia some similar and some different development trends can be observed.

I period (1985–1987) is characterised by the first signs of democratisation, openness and weakening of the media censorship system. Some free and independent press issues are published, however illegally. (Briksˇe, Du¯ze & Sˇulmane 1993:227f)

II period (1988–1991) is characterised by the collapse of the communist press and the liberalisation of the media market alongside with a popular and journalistic drive for state independence. Newspapers change names and enjoy very high circulation numbers despite little advertising, but relatively high purchasing power. Soviet military occupation cannot stop the free press and the establishment of independent media, partly with foreign investment.

III period (1992–1996) is characterised by a sharp decline in circulation for the press as prices rise dramatically, more foreign investments, privatisation of the media. Liberal media laws are passed. The advertising market develops both in public and private media.

IV period (1997–2004) is characterised by concentration of ownership, surreptitious advertising and the rapid development of online media. An alternative (private) distribution channel for the press is developed. There are increased discussions on digitalisation and the licence fee to finance public service radio and TV. More nationwide private TV and radio channels are developed. There is rapid economic development.

On the Latvian media market there were relatively good economic times for the old newspapers and magazines that had managed to reform as well as for most of the new press publications up till 1992. For instance, the circulation numbers of the main established dailies published in Latvian and Russian;Neatkarı¯ga¯ Cı¯n,aand SM Segodnjadropped from 183 000 and 173 000 in 1992 to 90 000 and 65 000 respectively in 1993. The same pattern was seen among weeklies.Lauku Avı¯ze went from 316 000 in 1990 to 130 000 in 1993 and Literatu¯ra un Ma¯kslawent from 104 000 in 1990 to 5 000 in 1993.

Two of the most popular new weeklies and monthly magazines during the fight for independence period, Atmoda and Avots, simply did not come out in 1993. (Høyer, Lauk & Vihalemm 1993:348f). This change on the market were caused by a series of factors; Russian economic sanctions in February 1992, shortage of and more expensive paper, the price of newspapers thus frequently increased by more than ten times. As independence was established and tougher economic times came, most people had to review their priorities.

In 1991 the Soviet authorities made several attempts to crush the free press in Latvia. During January 1991 the Press House in Riga that used to house most newspapers and the main printing plant was occupied by Soviet forces. The same happened in January and August 1991 with the national TV and radio. Even though one of the main dailies Dienaone day was printed in Sweden and shipped to Latvia for distribution and the studio of the first private, independent radio channel, 102,7 FM, in August 1991 operated out of Oslo in Norway, mostly the Latvian media succeeded in finding ways to print and transmit their media products elsewhere in Latvia. And those that tackled these changes best gained a competitive advantage in the media market.

Most of the Latvian press was privatised as the Soviet period ended. For instance,Diena, a daily established by the Latvian government in 1990, started its privatisation process in September 1991. The paper’s employees decided to establish their own shareholding company and attract a foreign investor. (Briksˇe, Du¯ze & Sˇulmane 1993:243).Dienabecame the first paper in Latvia to focus seriously on advertising to achieve sound economic results that would ensure editorial independence.

Unlike Diena, many other Latvian newspapers, radio and TV stations have not managed to attract the necessary amount of advertising and have become very vulnerable to influence from outside. Many newspapers, radio and TV channels are thus sponsored by political and economic groups that want to get their message across.

Throughout the periods, quite different from other countries in the world, female management dominance in the press market in Latvia has been maintained. According to results from a sociological study in 1998 involving 318 journalists in Latvia, a total of 56.3% of the leaders of media organisations were women. (Sˇulmane 2000:76). As per December 2004 a total of 5 of the 8 national dailies have female editors-in-chief (Diena, Latvijas Avı¯ze, Dienas Bizness, Chas (Cˇas) and Telegraf).

Concerning changes in the Lithuanian media market, several distinctive periods – liberalisation, diversification and concentration – must be considered.³

Liberalisation (1987–1989). New themes penetrated the print as well as broadcast media. Distinctive characteristics of this sub-period are the arrival of new titles and the diversification within the Lithuanian newspapers market.

The electronic media (Lithuanian television) played a significant role in the political mobilisation of the public.

The principal role of the media was to serve national emancipation, so the media worked as a political instrument for the newly born national movement Saju¯dis.

Diversification (1990–1995). A distinctive feature of this phase is privatisation and commercialisation of newspapers (those that existed during the Soviet time). It was a “closed” privatisation, which was realised without open tenders.

Instead, the shares were divided among the people who had worked at the newspaper. New owners lacked money and, most importantly, knowledge of how to be competitive in a newly created market. So the media organisations experienced changes of ownership and economic hardships of various kinds. New privately owned media enterprises and new newspaper titles were established, and gradually the advertising market was born.

Competition (1996–2003). This period is marked by a steep decline in newspaper titles, circulation and the growth of newspaper production costs (the price increased). Foreign capital arrived into the newspaper market:Kauno dienawas bought by the Norwegian Orkla Media AS. The formation of corporations was an answer to strong competition within the newspaper market. The national daily Lietuvos rytasestablished regional supplements for the cities of Vilnius and Kaunas.Lietuvos zˇiniosannounced itself as a national tabloid (in 1998), which was a new business concept at the time.

An entirely new type of diversification of newspapers took place in 2003 and continues until now. The national tabloid VL: Vakaro zˇinios, published by Respublikos grupe˙ UAB, has entered the dailies market by fighting aggressively for the position of the most read and also the cheapest daily in the country. In response, the largest national daily Lietuvos rytasestablished a tabloid newspaper Ekstra zˇiniosfor just 0.49 Litas per copy. Moreover, with convergence between print and telecommunications media increasing,Lietuvos rytasdecided to have a face-lift on the Internet and to provide no more free news online. Access to the Internet newspaper is only by subscription (the strategy is mainly directed towards international readers). The papers published by Respublikos grupe˙ UAB, in contrast to Lietuvos rytas UAB, keep away from any online experiments.

3 For more information see, for example, Balcˇytiene˙, Aukse˙ (in press): Understanding national characteristics of Lithuanian media.

To conclude, the period 1988–1992 is especially important in Lithuania. An enormous expansion of the press market took place to reflect the ideological diversity of the time. Therefore, this period is called revolutionary, and the next phase (1993–2003) is evolutionary.