The International Press Institute (IPI) today publishes a policy paper on state support to media in North Macedonia and the need for a fund for public interest journalism and media pluralism, which was released today as part of a wider report on the challenges facing media freedom in the country.
The paper is included as an annex to the report published following an international press freedom fact-finding mission to North Macedonia which took place from 5-7 June 2023. The mission aimed to identify the most serious challenges facing the media ecosystem and press freedom in North Macedonia and to provide recommendations on how the country can make progress on its commitments to address these issues within the framework of its potential accession to the European Union.
This policy paper is included as an annex to the report, which was prepared by the Association of Journalists of Macedonia. Download the full report here
Executive Summary
One of the most complex issues for the development of a healthy media ecosystem is the question of how and when public funding should be used to help support public interest journalism. In an era when the traditional business model for journalism is under sustained pressure due to digital disruption, this debate has become more pertinent than ever. While multiple policy options exist for governments to help support media through public funding, each carries its own opportunities and risks. No model fits all national contexts, and local economic and historical characteristics must be assessed when developing the best approach to fostering a viable and sustainable media landscape.
In North Macedonia, the most acute economic challenges facing media stem from the country’s highly fragmented media landscape and the lack of an advertising market big enough to support it. Since the government amended the law in 2017 to prohibit state advertising campaigns in media due to rampant abuses under the previous administrations, no new system for supporting audiovisual media has been created to fill this revenue gap. Likewise, no form of systemic state support exists to sustain the country’s struggling local and community media sector. The COVID-19 pandemic exacerbated the financial challenges facing the country’s entire media landscape.
Under pressure from the country’s terrestrial private television stations, the Social Democrat government has proposed to return to a system of state advertising in media. Draft legislation has been developed that would reform the current Article 102 of the Law on Audio and Audiovisual Media Services, which prohibits state advertising in broadcast media. This major policy shift has been justified by the Ministry of Information Society and Administration (MISA) as providing a vital economic lifeline to struggling media at a time of uncertainty, while also improving the communication of government campaigns and policies to citizens. New safeguards have been proposed to try and ensure advertising is allocated in a fairer, non-political and more transparent way.
This approach has been opposed by the country’s leading journalistic and media associations and organisations, who warn that the reappearance of state advertising in media in North Macedonia risks a return to the clientelist practices of the past, with deeply damaging effects on media independence and freedom more widely. They secondly warn that under this system, by far the share of the envisaged state advertising funds would be allocated to the country’s five largest private TV stations, distorting the market and disadvantaging local, regional and community media. They further note that the reform would also disadvantage all online media given that the scope of the law does not regulate informative online portals. These groups are instead calling for a broader and more innovative form of financial support to media carrying out public interest journalism, with wider positive effects on media pluralism and quality journalism.
This paper outlines the challenges and opportunities associated with competing visions for financial support to media in North Macedonia and sets out recommendations for a way forward that supports media’s economic development while also promoting public interest journalism. To do so, it first briefly examines the history of the model of state advertising in North Macedonia to set out how this experience should inform future policy choices. The paper recommends that, given the clear risks associated with state advertising in countries with a history of clientelism, an alternative, project-based approach that establishes a fund for public interest journalism should be considered. In an alternative model, such a fund could be established alongside a reduced state advertising model strengthened with significant additional safeguards.
State Advertising: A History of Abuse in North Macedonia
State advertising for public awareness and information campaigns has long been one of the dominant forms of state support for media in Europe and around the world. For many media, this has represented a major source of revenue and offset losses from falling print sales or the migration of advertising online. Yet, of all the forms of direct state support to media, it is widely perceived as carrying the largest risks. In Europe, an increasing body of academic work examining the phenomenon of media capture has identified how state advertising has been weaponised by governments to control editorial coverage. In several countries within the EU and the Western Balkans, revenue from state advertising is allocated in a non-transparent and discriminatory manner to reward political alignment with the government, while simultaneously being withdrawn or denied to critical media. While many EU countries have established robust systems to ensure this funding is not abused, a system of patronage is deeply ingrained in other EU Member States such as Hungary and Poland, with damaging effects on the viability of independent media outlets.
Since its independence, North Macedonia has suffered from repeated waves of non-democratic manipulation of state advertising by governments. Under the VMRO-DPMNE administration of Prime Minister Nikola Gruevski, who later fled the country to avoid corruption charges, abuses of state advertising campaigns reached their peak, as millions of euros of public money were used to systematically support media moguls close to the government in return for favourable media coverage. While the government justified the PR campaigns as vital for communicating messages to the public about legal reforms or public health issues, experts described the advertising as an indirect form of bribery between politics and media. After the VMRO-DPMNE administration fell and the Social Democrats were elected to government in 2017, a moratorium was placed on public campaigns in private media. Article 102 of the Law on Audio and Audiovisual Media Services formally bans all advertising in private broadcast media by all public authorities at both the national and municipal levels by restricting the planning of funds for this purpose (amendments as of December 31, 2018). This legal framework has remained unchanged since.
Financial Challenges: A Fragmented Media Market
The ban on state advertising in media is widely recognised as having an overall positive effect on limiting corrupt connections between media outlets and political interest in North Macedonia. Local journalistic and media organisations have warned in recent years of sporadic attempts of misuse by certain public enterprises in recent years, and compliance is not complete. However, overall this shift in culture is noted by international press freedom organisations and research organisations as severing the toxic link between private media and government and bolstering media independence. Media freedom groups recognise the ban as being justified, when set against the backdrop of the national experience with state advertising thus far. However, after the restriction was imposed many media faced a new reality in which a sizable amount of the revenue they require for business operations had disappeared.
In North Macedonia – a highly fragmented market in which many broadcast media compete for a share of an already small advertising pie – the ban has exacerbated financial challenges. In the broadcast market, according to the Agency for Audio and Audiovisual Media Services, there are a total of 107 broadcasters: 44 television channels and 63 radio stations. Eleven TV channels broadcast programs at the national level, with 18 at the regional level and 15 at the local level (via cable operators). In the radio market, four stations broadcast programs nationally, 16 at the regional level (of which 1 is a non-profit radio), and 43 at the local level (3 are non-profit). For a country of North Macedonia’s size and demographics, this is a highly densely populated broadcast media landscape. Advertising from private capital – historically the biggest source of revenue for both private print and broadcast media – has not proven sufficient to sustain such a large number of media entities. While economic viability for private media was challenging in the past, these issues were exacerbated further by the COVID-19 pandemic, as advertising revenue from private capital collapsed. Despite limited grants from international donors, media viability and sustainability remain weak. It has been repeatedly recognised that the country lacks a specific initiative or a model to support the sustainability of regional and local media.
Print Subsidies: A Limited Return to Direct State Support
To mitigate the negative economic impact of banning state advertising campaigns in the media, in 2018 the government introduced, with the support of the country’s leading journalistic associations, an annual subsidy program for the costs of printing the country’s newspapers. The practice is used in many countries around the world to provide sustained funding to the media. This new form of state support – distinct from state advertising campaigns – followed a successful lobbying campaign by the print industry. The independent allocation of this funding has been recognised by the MPM, which in its 2023 report recorded a low risk of interference regarding support to the media sector, including print subsidies. Media freedom groups both domestic and international have not raised concerns about the allocation of this form of public money.
However, as millions of euros were distributed and the relative success of this approach became clear, broadcast and online media also began calling for similar state support. In the broadcast sector, these demands have largely been led by the country’s five largest national television stations: Alfa, Alsat-M, Kanal 5, Sitel and Telma. These stations were among the largest recipients of advertising under the previous model of state advertising, given their large audience reach and sizeable influence they wield in the market. According to media reports, the five stations have been lobbying the Social Democratic government for a lifting of Article 102. The TV channels argue they deserve similar support to print media, and that state advertising, if allocated in a more democratic manner, would bolster their finances and improve long term sustainability. The Association of Journalists of Macedonia (AJM) and the Independent Union of Journalists and Media Workers (IUJMW), the country’s two leading journalist associations, together with other local media organisations, remain categorically opposed to any return to a system of state advertising, warning the associated risks outweigh any net benefits. This debate over the future of state support to media has continued for many years.
Current proposal: Lifting of Article 102
Proposed amendments to the Law on Audio and Audiovisual Media Services were first announced in May 2022. The draft bill was developed within a special working group. which was tasked with amending the law. It remains unclear who the members of this working group are and the body suffers from a lack of transparency. The working group was initiated by the Secretariat for European Affairs and later transferred to the competent Ministry of Information Society and Administration. A draft bill was tabled in parliament by five MPs from the ruling majority in November 2021. The amendment envisions the revocation of Article 102 and the return to state advertising on televisions and radios. Rather than give opportunities to individual state and municipal authorities to launch advertising campaigns if they chose to, the draft amendments would make purchasing space in media a legal obligation. This system would allocate 0.1 per cent of the annual state budget for this funding every year, excluding the income from the local budgets of the municipalities. Based on the current budget, this would equate to between 3.5 and 4 million euros per year. This excludes the funding coming from all potential municipalities, the level of which is difficult assess. Both national and municipal authorities would be obliged to conduct between one to four campaigns annually. However, under new rules, this advertising in broadcast media would be limited to “campaigns of public interest”. In total, estimates suggest these campaigns would equate to almost a quarter of private broadcasters’ yearly income, or a similar amount that is paid to private media for the election campaigns prescribed in the Election Code, meaning that in theory half of the annual budget for private media outlets would potentially be paid by public funds.
The new law foresees safeguards which the MISA claims will prevent the abuse prevalent in the past. Firstly, the campaigns to be run in media would first be recommended by a special parliamentary committee. In an attempt to secure bipartisan agreement, this committee would be composed of three MPs from the ruling majority and three MPs from the opposition. These MPs can propose potential public interest campaigns and the committee would decide which are successful. A similar model would be implemented at the local level. For those campaigns selected, a tender would be launched by the government and broadcast media companies would apply. The government would make the final decision of allocating money for campaigns. These would be divided into three price categories, to ensure contracts cannot be artificially bloated. The money paid would be tied to the average price of commercial advertising on each broadcaster. The Ministry claims this system will be conducted with greater transparency, would be in line with future EU Directive rules, and would re-establish the ability of public institutions to communicate its policies and messages to citizens.
Ministry’s Proposed Amendment: Strengths and Flaws
As currently envisioned, the additional income to private television and radio broadcasters in North Macedonia as a result of the return of state advertising campaigns would realistically represent a major financial boost to the sector. However, the principal concerns stem from the fact that this funding would be unequally distributed and fails to significantly support local and regional media, as well as online media (informative portals). Acute risks posed by the ability of state advertising campaigns to infringe on editorial independence also remain a concern.
Firstly, regarding the economic situation, on the positive side, media will benefit from millions of euros in guaranteed and direct advertising revenue per year. This direct support should allow the opportunity for better long-term financial planning and investment in staffing and innovation. On the negative side, according to the published version of the legal amendments as of July 2023, the five largest terrestrial television stations would receive 80 per cent of all advertising funding, with just 20 per cent left for other channels. While this money is allocated based on audience share and other market criteria, the unequal nature of the proposed allocation is clear. Given that the five largest channels already draw in the largest share of commercial advertising from private capital, this unequal distribution of funding will only further disadvantage smaller media in the market. Smaller independent broadcasters carrying out investigative, public interest journalism are unlikely to benefit significantly. Overall, the new system risks prioritising the larger broadcasters at the expense of smaller media.
In terms of new safeguards, on the positive side, the new rules should represent far tighter regulation of state campaigns and go some way to preventing the indirect purchasing of media support that characterised previous governments. However, strict implementation of the law would be crucial for preventing abuse. The requirement for a bipartisan approach for the selection of campaigns to be proposed to the government should also reduce the space for exploitation. The professional criteria and industry knowledge of MPs appointed to this body would be an important factor in its independence and success. MPs with demonstrable connections and in conflict of interest vis-a-vis certain media should be barred. Clear and accessible data about the amounts of money awarded to media should be published on a regular basis in a public database, to improve transparency.
Even with additional safeguards built in, the risks from state advertising remain clear, as shown by examples from European Union member states. Furthermore, the definition of “public interest” in proposed campaigns would be at risk of subjective interpretation by MPs. The criteria involved in meeting the “public interest” will likewise be problematic to define. Ultimately, political forces would retain control over the eventual decisions for allocating support, re-establishing an uneasy connection between the state and the media. Professional journalism and media organisations, including the AJM and the SSNM have argued convincingly that the return of state advertising to broadcast media would be “disastrous for the independent editorial policy of these media”.
State Support for Media: A European Perspective
The models of state support to media within European countries vary significantly from region to region and country to country. As outlined in a recent expert report commissioned by the Council of Europe, there have traditionally been four forms of state support to media. These are: 1. direct subsidies (like those currently awarded to print media in North Macedonia); 2. tax advantages; 3. state advertising (as is being proposed by the MISA); and 4. project-based support schemes. EU countries tend to adopt a mixture of these policies. The expert report further notes: “of the most common forms of public funding for the media in Europe, the least appropriate (…) is state advertising. Awarded by state bodies or state-owned companies, this form of financing is the most problematic as it is habitually misused by authorities to influence the editorial agenda of the media outlets.” Additional expert reports also identify state advertising as being the “most risky” form of state support to media.
In several EU countries, the weaponization of state advertising is one of the four key mechanisms used by governments to capture and control media. In Hungary, where the Fidesz government is the biggest advertiser in the media market, advertising campaigns have been instrumentalized to warp the media market in favour of a dominant pro-government narrative. Discriminatory abuse of state advertising is also widespread in Poland, where media critical of the ruling Law and Justice party have seen revenue from such campaigns dry up in the last decade. In other EU countries, even those with clear laws for how money should be disbursed, public health messaging campaigns during the pandemic were allocated in a highly discriminatory and politically-motivated way, as occurred in Greece in 2021. While these countries remain extreme examples, many EU states ranked on the higher end of democracy indexes suffer from similar challenges. It should be noted that in many EU countries, particularly in the Nordic countries and others ranked highly on Reporters Without Borders’ Press Freedom Index, robust rules are in place to regulate the allocation of state advertising and abuses are rare. Though there are exceptions, countries which have suffered from a history of clientelist systems of patronage tend to face systemic conflicts of interest within such a model.
In recent years, more EU countries have been experimenting with the fourth form of state support: project-based schemes to promote public interest journalism. Under this model, funding is awarded to media on a contractual basis for carrying out specific projects and is also aimed at improving media quality and diversity. There are many positive examples of such schemes working in EU countries and beyond.
As outlined in the Council of Europe expert report, the Netherlands has a very successful support scheme which is aimed at improving the quality and viability of the media: “The system thus works as a grant-making fund whose mission is to finance media outlets that want to improve their journalism or their operations.” This funding is allocated through two funds: the Dutch Journalism Fund (SVDJ) and the Special Journalistic Projects Fund. Crucially, the SVDJ acts as an independent administrative body, based on funding from the Ministry of Education, Culture and Science. The second also operates as an independent foundation, with funding from the Ministry. The Special Journalistic Projects Fund awards money to media after consultation with a committee of advisors, made up of media experts without political connections or affiliations. This would represent an effective and successful model for the Macedonian fund to replicate.
Also cited in the Council of Europe report as a positive example, the Flemish government in Belgium has long overseen a successful model of public funding based on specific projects. This system is functionally independent from the government and has been used for investigative journalism and other public interest projects. It uses public money to support the Audiovisual Fund (VAF). The scheme is recognised internationally as contributing to a very vibrant and dynamic audiovisual production sector. The Danish government also has plans to propose a new model for media support that favours local and regional media, while contributing with funding for much needed digital development and transformation, according to another COE report on media viability and sustainability.
Another Balkan country, Croatia, also operates a successful fund for public interest journalism. This Fund for the Promotion of Pluralism and Diversity of Electronic Media was established by the Law on Electronic Media. Its funding represents 3% of the revenue collected from the television fee for the public broadcaster, Croatian Radio and Television. In this case, the fund is managed by the media regulator, the Electronic Media Agency (AEM). Its objective is to support the promotion of content of public interest at both the local and regional level. Every year, it supports the production of around one hundred programmes of public interest in local and regional radio and television channels and online media aimed at local communities, including those using local dialects. Areas included in “public interest” topics include, for example, the exercise of citizens’ right to information; the promotion of cultural creativity and the promotion of cultural heritage; the development of education, science and the arts; and the promotion of works in local dialects; promotion of special cultural projects and events; and respect for national minorities. While this fund is coordinated by the media regulator rather than a body of NGOs and media unions and associations, it has been operated independently and has been successful in supporting pluralistic coverage.
Outside the EU, New Zealand established its own Public Interest Journalism Fund during the COVID-19 pandemic to help support media to produce high quality content. This fund distributed $55 million and was aimed at supporting the production of journalistic content at the regional and national level which would bolster democratic debate and encourage critical thinking. The scheme was internationally recognised as a success and a model for replication.
Alternative Proposal: A Fund for Pluralistic and Public Interest Journalism
In North Macedonia, leading journalists’ associations have long opposed the return of state advertising campaigns in broadcast media. Citing the country’s recent past experiences with this form of state support, they argue that an alternative model is required and have instead supported a legal solution which prioritises the production of diverse, high-quality, professional and public interest journalism. This would foster long-form, analytical investigative journalism covering under-reported issues in society, and would serve the interests of all citizens, including minorities and under-represented communities. Public interest themes would include documentary, educational and entertainment content. They have called for this support to be allocated to the non-profit and private media sectors, including broadcast, print and online media. This proposed system envisions a model in which media apply for journalistic projects and receive financial support in return. These projects would be designed for media at the national and local level. In a statement the associations argue this would be the most effective, and safest, way of helping directly support the media industry while also ensuring public interest values are met.
The structure and funding of this Fund would be essential for its functional independence. As in EU countries, the simplest model for funding such a scheme would be for its budget to come from the Ministry of Information Society and Administration. If such a model were to be adopted, money from the state budget could be channelled into a project-based support scheme. Additional financial tools for expanding the fund are possible, including taxes on telecommunications or social media companies. Structurally, the fund would need to act on behalf of the Ministry, but as an independent administrative body with autonomy to allocate funds autonomously. Its work would be led by a committee of media experts, academics and editors, who would be appointed based on strict professional criteria, and supported by a bipartisan representation of MPs. Decision making on projects would take place via a democratic voting mechanism. Data about the allocation of money would be published online regularly and be easily accessible. All media would be able to apply, from small community broadcasters up to the TV stations. The size and funding of projects would be tailored to meet different types of media, or production companies or consortium of journalists, although steps would be taken to ensure money is dispersed in a fair and proportionate manner. According to a recent report from the Centre for Media Pluralism and Media Freedom (CMPF), local and community media in Europe increasingly need to rely on financial support from the state. A project-based fund which ensures fair access to funding for these media companies could therefore help address this issue in North Macedonia. Crucially, the fund would be conceived on a multi-year basis to ensure media benefit from greater stability and can make long-term plans.
Considering the best practices from examples across Europe outlined in the section above, in practice a fund for media pluralism in North Macedonia would be best coordinated by an independent body composed of relevant media experts including stakeholders from media associations, NGOs, academia and cultural organisations, which would meet to assess project applications and decide on the distribution of project funds. As the most representative journalistic bodies with high levels of expertise and decades of experience in the field, the AJM and the IUJMW would be the leading candidates to coordinate this group. Such a composition of the fund would be in line with recommendations outlined in a recent UNESCO report on models for supporting media viability and independent journalism through public funds. Media owners, publishers and editors-in-chief should be excluded from participating in the scheme, given the clear conflicts of interest involved. Decisions should be taken on a voting basis after a period of debate and discussion and assessment of the criteria. Funding would best be allocated on an annual basis, or bi-annual basis for larger journalistic projects, and would be made on strict criteria of public interest, the definition of which would be agreed in advance by the established body. The scoring of each project proposal would be communicated in a transparent manner. The allocation of all funds should be published online on an easily accessible database and in annual reports, which should also be made public
The establishment of a fund for pluralistic and public interest journalism in North Macedonia in this way would be in line with multiple recommendations by intergovernmental bodies, including the Council of Europe. Resolution 1636 (2008) from the Parliamentary Assembly of the Council of Europe, for example, calls on states to take steps to foster media pluralism, stressing that “media freedom in a democracy requires fair and neutral state subsidies to the media”. Recommendation No. R (99) of the Committee of Ministers likewise encourages, among other measures, “the possibility of introducing, with a view to enhancing media pluralism and diversity, direct or indirect financial support schemes for both the print and broadcast media, in particular at the regional and local levels.” It suggests that “subsidies for media entities printing or broadcasting in a minority language could also be considered.”
Overall, there is a need for the vision and policy development on state support to the media in North Macedonia to undergo a shift which better considers democratic and public interest needs, rather than purely economic needs. For the creation of pluralistic and public interest journalism, the proposed project-based model would be most effective and most risk averse for North Macedonia. It should be recognised however that as a project-based system, revenue to media would be less direct and not guaranteed, meaning it may not be fully sufficient to secure the financial sustainability of all media. Taken together though, this appears to be the most appropriate model to allow media in North Macedonia to develop a viable business model while at the same time also retaining their editorial autonomy. While the success of such a model is by no means guaranteed, North Macedonia has multiple successful European examples it can follow, including the Netherlands, Belgium and Croatia.
Conclusion
When assessing competing arguments for funding models for journalism and media pluralism, it is important to note that all forms of state support have the capacity to be both helpful and detrimental. There is no single solution to safeguarding media viability and sustainability. North Macedonia’s national experience with the state advertising model thus far remains the strongest argument for adopting a more innovative form of funding. Some form of fund for pluralistic and public interest journalism would represent the best option. If implemented, it is hoped that a fund could provide a vital economic lifeline to media to carry out their public interest mission. A more resilient media sector would in turn strengthen the country’s democracy. Even then, however, it is important to note that such a funding programme would not single-handedly solve the issue of media sustainability and pluralism. This would need to be supplemented by other legislative and economic policies aimed at supporting free, pluralistic and independent media. Moving forward, rather than make a retrograde step in the form of state advertising, North Macedonia should continue its fragile but positive progress on media freedom by leading the Western Balkans in the search for a new model for public interest journalism.
Recommendations to North Macedonia Authorities:
– Retain Article 102 of the Law on Audio and Audiovisual Media Services to ensure the restriction on state advertising to media remains anchored in law
– Develop a new project-based model of state support to media and journalism, guided by principles of pluralism, diversity and public interest journalism, that is functionally independent from government
– Meet with EU governments and successful public interest journalism funds from across Europe to exchange information and assess possible models for replication
– Take concrete steps to develop the community and not-for-profit media sector in North Macedonia, including minority language and investigative media
– Ensure all steps to provide any form of state support to media are in full alignment with EU legislation on state aid and the provisions outlined in the draft European Media Freedom Act proposed by the European Commission
– Guarantee the widest possible consultation with relevant journalistic associations and media groups in North Macedonia to ensure any changes are backed with industry support
End note
The international press freedom and journalist organisations that took part in the mission to Skopje stand ready to facilitate information sharing and best-practice exchanges between the North Macedonia authorities and the Ministry’s Working Group with successful journalism funds in EU countries.
