Targeted subsidies – data on the digital switchover campaign

The digital switchover campaign has been ongoing for months. Using data that has become available thus far, we have analysed the channels that the authorities use to inform the affected households, and hence also the question of what media outlets benefit from the state’s spending of billions of forints. Based on the numbers available to date, at list prices roughly 81% of the campaign’s spending has gone to companies affiliated with the political right.

By Szonja Navratil and Ágnes Urbán.

As we noted previously, the digital switchover is set to occur this year, which is why the National Media and Infocommunications Authority (Nemzeti Média- és Hírközlési Hatóság, abbreviated as NMHH in Hungarian) has initiated a campaign to inform households that still watch analogue terrestrial television. Roughly 15% of the households need to be persuaded that changing their television technology is inevitable. This undertaking is further encumbered by the fact that the affected households are dispersed throughout the country and exhibit varied media consumption patterns. Even as a professional task, planning an efficient campaign to this end is therefore a challenging assignment. What drew our attention, however, was that an agency that is well-known for its affiliation with Fidesz’ former treasurer and financial éminence grise, Lajos Simicska, namely the I.M.G. Inter Média Group, won the public procurement tender to manage the campaign worth a net of 1.9 billion forints. (You can read more about the agency’s background here and here.)

Based on data provided by the research corporation Kantar Média, we investigated media spending allocated in the framework of the campaign in the period between January and May 2013. Kantar works with list prices, from which media corporations generally offer a steep discount. Hence the forint amounts as such provide little information, for they do not reflect real numbers; the distribution of expenditures among various media outlets is nevertheless indicative of trends, however. Our analysis extends only to media that are accessible through the Kantar Média database.

In the table below, we have marked those companies in the list whose owners are generally known to be affiliated with the political right, with their respective connections already documented in the press. This primarily refers to the media empire associated with the names of Lajos Simicska, Zsolt Nyerges, Károly Fonyó and Gábor Liszkay. We have recently had the opportunity to read about the outstanding levels of profit that the enterprises involved generate. We have also ranked the holdings of FHB Bank’s chairman, Zoltán Spéder, as well as the daily Magyar Hírlap, which is owned by Gábor Széles, with the identifiably right-wing corporations.

Campaign expenses of the NMHH digital switchover campaign at list prices, May – January 2013 (in ‘000 HUF)

Newspaper/channel	Type of media outlet	Expenditure in ‘000 HUF	Share %	Background
Publimont	public spaces	164,832	24.84	Simicska-Nyerges business interest
TV2	television	109,119	16.44	may become Zsolt Nyerges business interest
Metropol	daily newspaper	51,848	7.81	Károly Fonyó business interest
Class FM	radio	45,338	6.83	Zsolt Nyerges business interest
RTL Klub	television	36,939	5.57
CEMP Sales House	internet	34,130	5.14	Zoltán Spéder business interest
EURO AWK	public spaces	30,067	4.53	Károy Fonyó business interest
Publimont City Light	public spaces	25,563	3.85	Simicska-Nyerges business interest
Magyar Nemzet	daily newspaper	23,600	3.56	Gábor Liszkay business interest
EPAMEDIA BB	public spaces	20,441	3.08
Music FM	radio	18,575	2.80	Zsolt Nyerges business interest
Heti Válasz	magazine	12,840	1.94	Zsolt Nyerges business interest
Axel Springer regional newspapers (9 papers)	daily newspaper	11,070	1.67
Info Rádió	radio	10,950	1.65	Zoltán Spéder business interest
Kossuth Rádió	radio	10,806	1.63	MTVA
Magyar Hírlap	daily newspaper	9,360	1.41	Gábor Széles business interest
Pontreklám	public spaces	7,975	1.20
M1	television	6,900	1.04	MTVA
Pannon Lapok Társasága regional newspapers (5 papers)	daily newspaper	5,787	0.87
Inform Média regional newspapers (3 papers)	daily newspaper	3,855	0.58
Petőfi Rádió	radio	3,618	0.55	MTVA
Lapcom rural portfolio	internet	3,470	0.52
Lapcom regional newspapers (2 papers)	daily newspaper	3,119	0.47
Duna TV	cable television	2,259	0.34	MTVA
M2	cable television	2,055	0.31	MTVA
Pannon Plakát	public spaces	1,917	0.29
EURO AWK Citylight	public spaces	1,863	0.28	Károly Fonyó business interest
Axel Springer portfolio	internet	1,804	0.27
Hungaroplakát	public spaces	1,701	0.26
Telehold	magazine	1,197	0.18	MTVA
Inform Média rural portfolio	internet	544	0.08
Total		663,542	100.0

Sources: Kantar Média, kreativ.hu, hvg.hu, magyarnarancs.hu, origo.hu

We naturally have no insight in the campaign’s exact details since we don’t know what the underlying considerations in the media planning process were, what discounts the media corporations offered from their list prices, how often advertisements are published for the amounts in question, and how the target group was defined. What is nevertheless remarkable is that the list does not include certain publishers whose outlets are well-known for their extensive reach, such as Ringier or Sanoma. Especially Ringier’s absence is glaring, as Blikk Hungary is the paid daily with the largest circulation and readership, and as a tabloid it reaches consumers who do not read other press products.
The list contains 31 individual outlets or conglomerates in total, since we have combined the regional newspapers published by the same publisher. Of the 31 companies, we have classified 13 as falling into the right-wing sphere of influence (as the linked graph here also shows), there are substantial intertwinements between the prominent right-wing media investors; we sought to assign each media outlet to the businessperson most directly linked to it). Yet these 13 have received a stunningly high ratio of the total spending in the digital switchover campaign, namely 81.1% of all expenditures. There are six media outlets that belong to the public service media provider – these dispose over 4% of total advertising expenditures; as far as those are concerned, the state merely puts money from one pocket into another. There are therefore 12 items in the table above that can be tied neither to the state nor the right-wing. Altogether, these have received a mere 14.9% of expenditures based on list prices.Sources: Kantar Média, kreativ.hu, hvg.hu, magyarnarancs.hu, origo.hu

To stay on the issue of the newspaper market, it is also striking that while the daily Magyar Nemzet received 3.6% of the entire campaign’s expenditures, Népszabadság saw not a single advertisement on digital switchover. According to data provided by the Hungarian Audit Bureau of Circulations (Magyar Terjesztés-ellenőrző Szövetség – Matesz), in the first quarter of 2013, 39,293 copies of Magyar Nemzet were distributed on a daily average, while during the same period Népszabadság‘s circulation was 52,409. In other words ads placed in the latter would have reached a significant, and obviously larger, number of readers.

Even more interestingly, the share of the 19 regional dailies was a mere 3.6% at list prices, which corresponds to Magyar Nemzet‘s ratio. According to data provided by the Matesz, the total average circulation of all regional newspapers was 523,808 in the first quarter, exceeding Magyar Nemzet‘s by an order of over 13 (there was only one regional daily newspaper for which there was no circulation data available at the Matesz, namely the Nógrád Megyei Hírlap, which was also one of the recipients of advertisement money). The regional newspapers ought to have played an especially pre-eminent role in the campaign as research by the NMHH suggests that most of those affected by digital switchover live in rural areas.

Stemming from the very nature of the issue under discussion, the role of terrestrial television is especially important in the switchover. At list prices, TV2‘s share of the campaign expenditures was thrice that of RTL Klub, which is probably not wholly unrelated to the fact that TV2’s director general, Zsolt Simon, is known for his ties to Fidesz, nor is the preference for TV2 unconnected to the back and forth surrounding the sale of that television channel. It is worth noting that according to the Media Council’s Report to Parliament, RTL Klub reached 17.9% of viewers in 2012, while TV2’s rating was 15.8% in that year. It seems safe to assume that these ratios did not change significantly in the period under review, that is the first five months of 2013. At the same time, the digital switchover campaign appeared in public media broadcasting as well, which was of course eminently justified, since presumably a large segment of the target group watches M1’s programmes. Still, it is more difficult to explain why ads were screened on M2 and Duna TV, in light of the fact that these channels are not available through analogue terrestrial broadcasting. In other words, those with access to these channels are not affected by the switchover issue, at least not directly.

Following the same logic applied above, on may also ask why there are advertisements on index.hu and none on origo.hu, why Info Rádió is involved in the campaign while Klub Rádió isn’t (one might also add that Info Rádió’s transmission range and target audience does not mesh with the profile of households affected by the switchover), why Heti Válasz made the list even as no other public affairs magazine did. Whenever a choice is to be made between right-wing media outlets and left-wing or independent outlets with roughly the same – and occasionally even significantly larger – reach, the scale always tips towards the former. It would be hard to ascribe this all to coincidence.

Even without information about all the details of the campaign, the contours of the underlying political objectives are rather clearly discernible: the campaign spending, which is otherwise socially important and genuinely in the public interest, exhibits a strong bias towards the right. The communication of digital switchover is palpably used as yet another means to channel funds to friendly media companies, and it remains only to be hoped that at least some of the two billion forint budget allocated to this communications effort will be used to actually inform the households affected.

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