Slovaks consume news more frequently and in bigger amounts than ever before. They have access to a plethora of publications, news portals, radio and television stations. However, much of that is in the hands of a few powerful financial corporations, closely linked with political groups. Policymakers and regulators lack vision and have little interest in strengthening journalism. A handful of foreign players are still investing in news, but they are increasingly favoring investments in entertainment or are raring to exit the market completely. The Slovak public broadcaster has garnered kudos for its journalistic output in recent years, but a new management is poised to put an end to that.
Still, not all is gloom and doom on the Slovak news market. A new generation of professionals is shaking up the status quo, launching new political platforms and funding media start-ups.
Government, Politics and Regulation
2ND, UPDATED EDITION, 2020:
Thanks to the Constitution, Slovaks enjoy freedom of speech. Press publishing is not restricted in any way and censorship is forbidden in Slovakia. However, the Slovak media regulation remains a heavily politicized process that affects the environment in which journalists and media outlets operate, according to the report.
“All of the regulators covering media are in theory autonomous institutions, but in practice they take orders from the politicians in power as the state has the biggest say in appointing and dismissing their members,” Marius Dragomir, CMDS director and the report’s author, wrote.
Today, the most debated regulatory issue in Slovakia is the online content. There is no law governing online content in Slovakia yet, but the country’s authority in charge of media regulation, the Council for Broadcasting and Retransmission (RVR), whose original mission was to watchdog the broadcast industry, has been expanding its remit to other types of companies. The RVR has begun in recent years to monitor publishers and telcos. However, it doesn’t cover major on-demand video platforms or social networks such as Netflix and Facebook. How and when these actors will be regulated is yet to be seen.
Journalists interviewed for this report say that the internet should remain unregulated. Designing regulations for online content by using the fake news scare as a pretext is going to lead to more self-censorship among journalists and media outlets, according to the report. The culture ministry is the main initiator of media policies in Slovakia. Parliament plays an equally important role as they often alter the content of laws sent over for approval by the ministry.
On top of political influence, Slovak media regulation is marred by lack of vision and progressive thinking. All that allows “a handful of financial powerhouses with dubious business practices” to capture the country’s news media, according to the report. Moreover, the investigation of the assassination of journalist Jan Kuciak unearthed “a cesspool of corruption and organized crime that connects major media groups, politicians and criminals,” Dragomir wrote in the report.
The most recent controversial issue related to media regulation was the approval by Parliament last year of an amendment to the Press Law that would make it easier for politicians to demand a right of reply in the media. The amendment was a response to the “media terror,” the phrase used by the ruling Smer-SD party to refer to critical media coverage.
1ST EDITION, 2018
The regulation of media in Slovakia is a heavily politicized process. All of the regulators covering media are in theory autonomous institutions, but in practice they take orders from the politicians in power as the state has the biggest say in appointing and dismissing their boards. The sole authority directly in charge of media regulation is the Council for Broadcasting and Retransmission (RVR), a body created in the early 1990s to watchdog the broadcast industry. However, their regulatory role is decreasing as licensing of broadcasters, due to digital developments, has become a formality.
Policy in Slovakia is usually initiated by the culture ministry, which drafts most of the initial proposals for legislation in the media field. However, parliament has an equally high influence (in some cases even higher) in the policy process. A number of media laws (such as the Digital Broadcasting Act) drafted by the culture ministry have been significantly altered in parliament under pressure chiefly from private broadcasters, according to journalists and media experts interviewed for this report.
Several other regulatory authorities indirectly cover news media. In fact, a significant role in shaping the Slovak media market is played by the antitrust regulator, PMU. Its decisions, for example, allowing media acquisitions by Penta Investments, a mighty financial group, have helped this company gain an outstanding dominant position in the media market.
The biggest regulatory issue in Slovakia is the internet. This is a field that is still outside the state regulation and, according to most of the journalists interviewed for this report, it should stay like that. However, the government is looking into ways of regulating online content. Already, empowered by EU legislation, the RVR is taking its role in internet regulation more seriously than the EU ever recommended. Although it has not yet made many decisions in the online area, RVR is carving out its own territory online, regularly publishing the list of outlets that are in its regulatory sphere. These outlets are a hotchpotch of small and big broadcasters, publishers and telcos that have a presence online (who doesn’t?). Conspicuously, major on-demand suppliers and social media are not covered by RVR (or any regulator for that matter).
The key influencers in the Slovak media regulation are in a way or another associated with politics and politicians. Most of those sitting on regulatory bodies need in the first place the support of authorities (parliament or government) to be appointed in those positions. The Slovak regulatory environment is characterized by a dearth of vision and progressive thinking needed to spark innovative journalistic projects. Instead, hackneyed regulatory practices allow the Slovak news media market to get captured by a handful of financial powerhouses with dubious business practices and heavily anchored in political life.
The largest players on the Slovak media market in terms of funding are the government (which controls the system of license fees for the public broadcaster and also gives subsidies and state ad money to the media) and several private actors, including foreign media houses, politicians and financial groups. Financially, the government retains a leading position with over €100m of public money invested in the media, according to the latest available data from 2016. Most of that is in the form of public funding allocated to RTVS, the Slovak public broadcaster. With the exception of several private players, the amount of public funding dwarfs the turnover of most media companies in Slovakia.
Two large financial groups, Penta Investments and J&T, have been increasing their participation in the media in the past few years. Penta Investments, particularly, controls via two companies a large portfolio of print titles and websites. The company repeatedly claimed that they view media purely as a business. They are said to be eying even more acquisitions. Penta Investments and J&T in the 1990s reaped spectacular profits off taxpayer money through state companies. They have vested interests, doing business with the government, especially in regulated sectors such as healthcare and energy.
The two main foreign players are American owned Central European Media Enterprises (CME), which controls the most popular TV channel in Slovakia, and Swiss-German publisher Ringier Axel Springer, which owns the most popular daily Novy cas, and the biggest online server, Azet.sk, along with a big portfolio of entertainment titles. However, both are planning to exit the news market. CME is reportedly planning to sell its operations, possibly to a group of oligarchs from Slovakia and the Czech Republic whereas Ringier Axel Springer announced plans to sell most of its print news media to focus solely on online portals. Some of those are news portals, of which the most popular is Aktuality.sk, the four most read website in the country.
A big technology player is Slovak Telekom, the largest advertiser in the country and one of the biggest companies in Slovakia with revenues of some €670m and net earnings of €61m in 2016. They own the second largest portal by audience, Zoznam.sk, and a popular tabloid news website.
Other prominent players in the Slovak news media sector are a small group of businessmen and politicians, including Andrej Babis, prime minister in the Czech Republic.
News is not highly profitable in Slovakia, with six of the ten largest companies in the market incurring losses in the period 2012-2016, but a lucrative subscription-based model is emerging, primarily in digital publishing. The most popular, non-tabloid, daily in Slovakia, Sme is moving toward that model as their print circulation steadily declines. DennikN, a news outlet established in 2014 by a group of breakaway reporters from Sme, claims that they have reached profitability thanks to a paywall model.
Technology, Public Sphere and Journalism
Slovakia has been a fast adopter of new technologies. During the past decade, internet and mobile penetration in the country has exploded, significantly changing news consumption and access to information. The country has a mobile penetration of over 130%, one of the highest in Europe, as many Slovaks use more than one mobile SIM card.
Changing lifestyle and more affordable services allow Slovaks to boost their media diet on mobile devices. Unlike a decade or so ago, post-paid mobile subscriptions, allowing online surfing at leisure, at home or abroad, are now dominant. Nearly 83% of Slovaks are online via a mobile device. Internet services have also become one of the main drivers for growth on the Slovak electronic communications market contributing more than 17% to this market in 2016, a jump from 10% five years before. However, the turnover in the electronic communications market is constantly declining, which is a sign of both saturation and dwindling prices due to increased competition. That is likely to affect first and foremost local telecoms and internet service providers, the key infrastructure operators and distributors of content and communication services.
On the internet content market, foreign players are dominant: Google is leader on the browsing and searching market and Facebook is by far the most popular social network, with nearly 45% of Slovaks using it. However, two local players, Azet.sk and Zoznam.sk, with a profile similar to Google (in local language) pose significant competition. Unlike Google, they are also producers of news content (though a lot of it is tabloid fare), which gives them a big advantage in the news media market. Ringier Axel Springer, a Swiss-German publisher, is increasingly powerful in the digital news market. It owns Azet.sk, but also the news portal Aktuality.sk, the fourth most visited website in Slovakia.
Although the remit of regulators does not cover companies like Google and Facebook, the position of international technology companies in Slovakia is highly endangered. Authorities have showed in the past couple of years their commitment to make them pay taxes on all advertising revenue generated in Slovakia. They also want Facebook and other foreign technology companies to open a local office in Slovakia (as Google has done already) if they want to pull in revenues from Slovak customers.
A younger generation of Slovak professionals, coming from the IT and digital services sector, is emerging and changing the industry. New associations of creative industry people and outspoken technology entrepreneurs are gaining more clout in society and even politics. Several IT professionals and entrepreneurs, including the head of Google Slovakia, Rasto Kulich, support Progressive Slovakia (Progresivne Slovensko), a progressive political party launched in late 2017.
Generally, in spite of usual lobbying practices for commercial gains, the technology sector in Slovakia is apolitical. None of these companies has ownership links with politicians and political parties. Only one of them, O2 Slovakia, has ownership connections with a powerful financial group operating in Central and Eastern Europe, namely PPF, which is led by Czech magnate Petr Kellner.
Although news media have a relatively low outreach on social networks, all of them rely on social media, particularly Facebook, to distribute their products. However, an experiment run by Facebook in 2017, consisting of removal from its main feed of posts generated by professional media clobbered news media in Slovakia. Some of them experienced day-to-day declines of 60% in their user interaction (wich is how Facebook defines likes, shares or comments).
Out of all foreign technology companies, only Google got involved directly in supporting Slovak journalism. Through its grant-making project Digital News Initiative (DNI), it has given some €1.16m to locals to develop journalism projects in Slovakia. While that helps one-two projects get off the ground, it hardly influences the news market in the country.
This report is part of the Media Influence Matrix project initiated by the Center for Media, Data and Society (CMDS) and run as part of the Media & Power Research Consortium.
The country reports in the Media Influence Matrix series aim to research the changing landscape of:
- government and policy space, with a focus on the changes in the policy and regulatory environment;
- funding, with a focus on the key funding sources of journalism and the impact on editorial coverage;
- technology in the public sphere, with a focus on how technology companies, through activities such as automation and algorithm-based content distribution, impact news media and journalism.
The research focuses on news media, including newly emerged players. The study is neither aimed at exhaustively mapping the entire media industry nor is it intended to target specific media sectors. Instead, it maps the most popular and most influential news media on a country-by-country basis and analyzes their changing relations with politics, government and technology companies.
Researchers are collecting data and information following a common set of research guidelines (See Research Guidelines in Appendix I below). The analysis in these reports is carried out by researchers with experience in the country covered by the report under the guidance of a team of editorial supervisors and experts. The reports are reviewed by a team of reviewers selected by our advisory boards.
For each country report, a list of sources used in each chapter of the report is published. In the categorization of technology companies in all country reports we use the methodology of the Ranking Digital Rights project, which divides companies in two groups. The first group, internet and mobile, includes the so-called “mobile ecosystems,” companies that create mobile devices and products. In the second category, telecommunications companies, we include service operators that offer connection and access services such as voice, data or cable connections.
“In 2015, Ranking Digital Rights (RDR) launched its inaugural Corporate Accountability Index, which ranked 16 Internet and telecommunications companies. For the 2017 Index, RDR has expanded the ranking to 22 companies, which includes all of the companies ranked in the 2015 Index as well as six new companies. In addition to Internet and telecommunications companies, this year’s Index will include companies that create mobile devices and products we call makers of “mobile ecosystems.” We also added several new services to companies we previously analyzed in 2015.” (Source: RDR)
For detailed information on the data collection methodology for the Media Influence Matrix report on Slovakia, download the pdf below.