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

2. 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

4. Overview

5. 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 13.77 mln (GEL 16.36 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

6. 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)

7. Distribution of gross advertising expenditure (2009)

8. 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.