Hungary: Western Investors Damaged Our Free Press

November 25, 2014 • Media and Politics • by

Recent stories about Hungary in the western press have given the impression that Budapest, the capital, has been descending into a totalitarianism not seen in Europe since the invading horsemen of Genghis Khan. Criticism of the centralizing policies and authoritarian style of Viktor Orban, the prime minister, usually includes a comparison to Vladimir Putin. Orban is depicted as a ‘Victator’, engaged in a full scale war against press freedom. But let me offer you a different news angle. A story about how western investors stifled Hungary’s free press for decades after 1989.

‘Viktor Orban Steers Hungary Toward Russia, 25 Years After Fall of the Berlin Wall’, proclaimed the New York Times recently. This was only one of many articles suggesting that Hungary is on the verge of becoming a Russian satellite state.

If Hungary’s news industry is drifting towards the Putinist model of a controlled state media it has a long way to go. The most popular online news sites in Hungary, and around half of the main newspapers and broadcasters, are vehemently critical of the government. Something you cannot really call a totalitarian media landscape. However, they are all struggling with vanishing advertisers and are financially overexposed to their owners’ business interests and government PR spending.

This story is about how foreign media ownership distorted a small market and left it highly vulnerable when search engines hijack ad revenues, and social media demolish traditional news distribution.

The New York Times headline was right to refer to the fall of the Berlin wall. The year 1989 was exactly the time when a newly emerging free press in Hungary was put on the wrong course by western investors. It was a course that led to at least some of the current troubles here.

How did it happen?

Western media conglomerates bought up Hungarian newspapers like cheap candy in 1989 and 1990, before, during and immediately after the first free democratic parliamentary elections. For example, in the very final hours of Hungarian communism, in 1990, the German company, Axel Springer, the WAZ group, an Austrian and an English investor struck hasty deals with the communist party (or its successor, MSZP), to buy regional newspapers (with a combined daily circulation of at least 1.2 million people at that time).

These papers were technically owned by the state party, but of course constituted national property. Still, cunning apparatchiks allegedly channeled the money into party and private bank accounts. But what was really clever was that the deals included terms to ensure the survival of the old guard editors and staff.

The ‘grocers’, new corporate media investors, profited after 1989

That was the original sin with which the new, “free” Hungarian press was born in many other cases, too. The “grocers” — as Nick Davies, the Guardian journalist, called the new corporate media investors that bought and brought down big family papers in the West — rescued the old journalists with their new newspapers.

In Hungary, genuine local news or newly-founded, independent national outlets were not able to build up their operations at a time when the news business was still a highly profitable endeavour (how could you compete with the grocers?). It is a telling story how the most influential national newspaper, Népszabadság, a flagship party mouthpiece before 1990, like Pravda in the Soviet Union, ended up in the hands of the German conglomerate Bertelsmann (later sold to the Swiss Ringier) in the same way.

This was a Muscovite heritage that did not bother western analysts.

Western investors are now restructuring or selling up and leaving Hungary

Since news publishing is no longer a profitable business, and in the face of falling circulation, these very same grocers have recently been seen “restructuring their portfolios” or fleeing their Hungarian  investments altogether.

They are leaving behind a news industry with no real reserves, such as charitable funds or backers, (a politically motivated George Soros does not count), and the political class will not shed tears about it.

As a 21st century political power, Orban’s party is probably losing interest in shaping the press landscape in Hungary anyway.

News  outlets are being bypassed by social media and public service broadcasting

Public broadcasters are on a short leash, and thus the governing party is increasingly able to bypass new and old news outlets with its messages, and address voters (or consumers) either by social media or its own third party “independent civic” group campaigns. Or with the help of sophisticated computer data bases that enable political parties to reach voters directly in their homes.

None of these techniques being an invention of Mr. Putin, but rather trends adopted from the United States.

A lot is simplified here. A recent, controlling Hungarian media law and a special tax on media advertising are of course things to deeply worry about. It is telling however that they have not triggered the wide-scale protests in Budapest that the recently planned (since withdrawn) internet tax did.

This is Zuckerberg’s generation in the streets of Budapest, and I guess even Viktor Orban has now understood: over-regulation and absurd taxes will not kill the free press in Hungary. It is already dying of something else. Not Moscow’s trickery, but shrinking news budgets and a lack of new investments, surely the best scenario for a government wishing to control the news.

Any independent and free press in a democracy (and Hungary is still one, contrary to popular assumptions in the western media) needs sound financial foundations, a viable business model of quality journalism. This is something that the news industry does not have any more, not only in Hungary but in the whole western world.

 Photo credit: Flikr: Habeebee 



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