Murdoch takes first step to fulfil Balkans promise

Murdoch has been awarded the first Bulgarian commercial TV channel. Limited revenue will make it tricky to deliver the high standards promised.

Since the Berlin Wall came crashing down ten years ago, Eastern Europe has seen a frenzy of interest from Western investors. Prominent among them: companies eager to take advantage of a newly-liberated media industry, and of millions of consumers introduced for the first time to the delights of free elections, free enterprise, a free press and the free market.

But some investors missed out, and some countries as well. Among the investors was Rupert Murdoch, who in the early Nineties was too busy saving his empire from collapse under the weight of massive borrowings and huge interest payments, and stemming the enormous losses at the merged Sky-BSB.

Among the countries was Bulgaria, the last stop before Europe turns into Asia at the Turkish border, and a state where the process of reform stalled for several years in the mid-Nineties, when the former Communists returned to power as the Bulgarian Socialist Party.

But now Bulgaria is catching up. Much of the country’s national newspaper industry, including the two most popular titles, is already controlled by a single Western company, WAZ (Westdeutsche Algemeiner Zeitung).

And last month the licence to run the country’s first national commercial TV channel was awarded – to a Murdoch subsidiary called Balkan News Corporation. By the end of this summer a new service, bTV, should be broadcasting a full schedule of programming on what is now Bulgarian National Television’s (BNT) second channel, with about 83 per cent coverage of the country’s 8.5 million people.

And it seems the parent News Corporation already has ambitions to expand outside Bulgaria. News Corp Europe chairman Martin Pompadur points out that Bulgaria is in the centre of the Balkans, bordered by Turkey, Greece, Macedonia and the former Yugoslavia. That makes it a good place from which to learn how the region works and eye up other opportunities in Balkan media.

This is just as well. Bulgaria is not only a small country but a poor one. The average wage is just £850 a year. Unemployment is officially put at 16 per cent and rising, unofficially even higher.

Petko Shishkov, editor of respected weekly economic newspaper Capital, puts total TV ad spend at just $25m (£15.6m) The advertising monitor produced by the local subsidiary of Gallup, BBSS (Balkan British Social Surveys), shows cosmetics, drink and food are the biggest product categories advertised on TV – low-cost items which are all the country’s poverty-stricken consumers can afford. Not surprisingly, manufacturers of consumer durables are in dire straits.

For the most part the capital, Sofia, and its people are terribly shabby. The infrastructure is in appalling condition. And Bulgaria is the only country I know where, in one of the best restaurants in town, a note in the menu asks patrons to leave their mobile phones and hand in guns at reception on arrival.

The impact of a major commercial TV company in this small and rather murky pool is the subject of much speculation among Bulgaria’s limited chattering class. Capital’s Shishkov and his media editor, Alexey Lazarov, say the first effect will be to reduce the cost of TV airtime.

That could be bad news both for the new channel, allowed to carry up to 12 minutes of advertising an hour, and for BNT, which can carry six minutes (and also gets an annual grant from the state budget). BNT’s immediate response, perversely, has been to increase its airtime charges fourfold, no doubt hoping to make a quick killing before the competitor comes on stream.

BNT programme-makers such as Konstantin Kissimov, the news editor, and Asen Gregorov, producer of the breakfast programme and presenter of a weekly programme about the economy, put on a brave front. They say competition will be good for them (it will – judging by how low the TV news, technical and editorial standards are) and that BNT’s commitment to public service programmes will help it keep its audience. They also point to the success of Bulgarian National Radio, whose Horizont channel still has a monthly reach of 53 per cent of the population, according to BBSS, compared with between nine and 13 per cent apiece for the four most popular commercial networks – and that after a decade of commercial competition.

But state radio’s audience is heavily skewed towards older, more conservative and rural listeners; the commercial stations are popular with younger listeners in urban areas. In the same way, BNT is already losing audiences and revenue to local commercial TV stations in the cities, even though their budgets are tinier and technical standards even lower.

BNT can look forward to massive job losses from its surviving workforce of 2,000 as national competition for advertising and audiences drives down ad revenue, and inefficiencies are highlighted (just as they have been at state broadcasters in other small European countries, faced with the arrival of commercial competition).

As for the new commercial channel: with a limited pool of talent and meagre budgets thanks to limited revenue, it may find it hard to deliver on a promise of higher programme standards and more popular schedules.

Bulgaria, it’s clear, isn’t going to make Rupert Murdoch rich for a good few years yet.

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