Monday, November 19

The “Balkanisation” of Czech Media


By the time Forum Media ended on Thursday, there were a lot of people leaving in an angry mood. This is not unusual. Forum Media seems to attract a lot of negative reaction every year. Overall it creates an extremely ambitious agenda for itself, which is very difficult for a magazine to organise successfully on limited resources.

However the negativity this year focused on what should have been a highlight of the event: the session which brought together the major players of the media market. Again, we must reserve a bit of sympathy for Dan Koppl. In order to be relevant, the session had to include Jaromir Soukup on the panel, but he has in the past been extremely capricious when invited to similar events, frequently cancelling his appearances at the last minute. So  the organisers chose to present Soukup as just one of the panel of four to whom questions would be directed.

But it was Soukup that everyone wanted to hear from most, because his business acquisitions this year point to the Balkanisation of the Czech media scene. Now that description is not a cheap generalisation. Consider the media scene in Bulgaria for example. It is dominated by one man, Krassimir Guergov. This man, an ex-secret policeman, built up media interests from the early 90s, starting with the advertising agency Kres. However he soon started to build business positions too on the media owner side, becoming the owner of BTV with CME (the same company which owns TV Nova of course). BTV owns radio as well as TV stations, and claims a 44% share of the TV market.

Mr Guergov built up these positions in a country which at the time was virtually lawless by European standards. I have friends with legitimate business in Bulgaria who at the time seriously considered relocating themselves and their families to Prague to ensure their personal safety. Nowadays Bulgaria is part of the EU. It has a Clients' Association, and as I know from meetings with its members, one of its main concerns is the over-riding power of Mr Guergov. They feel they and their media agencies have no possibility to plan and buy media in an open market, because of Mr Guergov's position. They cannot join forces with the agencies' association to take action, because Mr Guergov has been chairman of the agencies' association since 1996! They have no confidence in their national politicians because the politicians are assumed to all be afraid of Mr Guergov's control over so many mass media outlets. Their main hope is to interest the EU in the situation.

Now consider what has happened this year in the Czech Republic. Mr Soukup owns Medea, now possibly the largest media agency.  Medea has long pursued a strategy of attracting many small Czech companies which together create a large buying pool. People tell me that Medea has good, hard working people in its team.

However this year Mr Soukup's company Empresa Media has bought several magazines, including Tyden, and now TV Barrandov. He has, with TV Nova presented the almost surreal idea that the Czech Republic should become the only country in Europe with two peoplemeter systems, which must ultimately be paid for by the clients. (I have never met a professional media buyer who thinks there is any serious problem with the current peoplemeter system). Mr Soukup has not however met any serious resistance to any of these moves. When he became a media owner, AKA met to discuss the conflict of interest. Despite much indignant muttering before the meeting from the CEOs of big international agencies, AKA came to the conclusion that Medea had done nothing to warrant being thrown out of AKA. Of course not. Medea, the agency, does not own Tyden, the magazine. So that's alright, then.

So on Thursday morning, Mr Soukup blithely continued with the "no conflict" theme. He gave us his "personal assurance" that there would be no conflict in the interraction between Medea and Tyden or Barrandov. He even offered to set up an 'ethics committee' to examine such issues, which naturally he would lead. The reaction from the audience at that point suggested that this may have been an example of the famous Czech black humour, but Mr Soukup did not seem to be joking. Meanwhile we heard Mrs Smuclerova  of Ringier speaking warmly of the new joint sales agreement between her company and and Mr Soukup. Mr Soukup then corrected her, saying the agreement was with Empresa - so that's alright then.  Marek Singer of Prima did not mention his company's new joint sales agreement with TV Barrandov, but it too was much discussed outside the room.

Do you now agree, dear reader, that "Balkanisation" is not too dramatic a word to describe what is happening to the Czech media market ? If not, perhaps I should take you back to Bulgaria again. Most of the big international clients there (Unilever, Nestle, telcos, banks, etc) work with international media agencies such as Mindshare, OMG, Starcom etc. However these agencies find it difficult to develop optimal campaigns because the biggest commercial TV company is controlled by the same man who owns their biggest local agency rival. On the other hand, a "failure" by a company to advertise 'sufficiently' in a certain medium can raise the spectre of negative editorial comment about that company. For similar reasons Bulgarian politicians are most unwilling to initiate a media law which might restrict the business interests of somebody who controls the most powerful media voices - such voices can run unhelpful commentaries at election time. A bomb exploded outside a newspaper office the month before I arrived.

We are not at this point yet, of course. The Bulgarian are amazed however that we do not have a similar association in the Czech Republic. They would probably be even more surprised to hear that at Forum Media, the clear conflict of interest in Mr Soukup's empire was there for all to see. And yet not one client spoke up about the dangers of it.

Welcome to the Balkans!

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