Financial Sustainability and Advertisement Revenues of the Georgian Media Mathias Huter Transparency International Georgia

Why advertising matters The only way to support an independent, pluralistic media market The market aspect: Ads create incentives to reach larger audiences Best case: Improvement in quality, journalistic competition Revenues allow media to invest Lack of financial sustainability leads to editorial interference and the media being used as a tool by politicians

Overview

Decrease in ad revenue before elections Total reported ad revenues of broadcasters 2011: GEL 72.4 million Total advertising revenues (including sponsorship and teleshopping) of major TV channels fell by 1.5% in first 8 months of 2012 GEL 36.2 mln (01-08/11) GEL 35.7 mln (01-08/12) Rustavi: Decrease of ad revenue GEL mln (GEL mln) – Sponsorship increased by more than 70% to GEL 2.2 million Imedi: Stable, from GEL 15.2 (2011) to GEL 15.7 mln (2012) Maestro: +500% GEL 152,107 in 01-08/11 GEL 1,010,110 in 01-08/12 TV9: GEL 176,085

Estimated net advertising market (2010) Medium Net ad-spend USD Newspapers & magazines3.5 to 4.5 million TV*35 million Radio*2.2 million Outdoor2 to 4 million Online0.5 to 1 million Total43 to 46.5 million * Exact data provided by GNCC Estimate by TI Georgia, based on 2010 data from the Georgian National Communications Commission, the Georgian Public Broadcaster, and 2009 data from ZenithOptimedia/AGB Nielsen (exchange rate: GEL 1 = USD 0.566)

Distribution of gross advertising expenditure (2009)

Observations Before elections: some self-censorship by advertisers. This no longer seems to be a problem Limited capacity in media outlets to market themselves. Trainings are trying to address that High market concentration, political ownership. Changes are likely.