The content of media and the level of professionalism
and orientation of their journalism depends upon their
source of funding. The very essence of media, their
place and role in the life of a region, and their
function in the perpetuation of the local societal
structure, depend on who is giving them money.
There are currently five revenue sources for mass
media:
- State funding
- Advertising
- Non-governmental sponsorship
- Individuals (subscribers, retail sales of print
media and subscription payments for radio and TV)
- Redistribution of funds within the framework of
a particular mass media holding company.
Our examination of the budgets of regional media will
be limited to comparison of two sources of funding:
regional budgets and regional mass media advertising
markets. The researchers are aware that this comparison
will produce only rough figures, but this approach is
based on several grounds. First, the total absence of
credible statistics in the sphere of mass media and
the absolute opaqueness of media budgets make it extremely
difficult to conduct a more accurate and comprehensive
financial analysis of sources of financing. Secondly,
comparison of the amount of budget funds with the amount
of advertising revenue will reveal a general tendency
and identify the essence and sense of each region's
media profile.
Mass media exist in a kind of gravitational field
comprised mainly of two monetary bodies: state funds
and advertising revenues. The relationship between
these two types of funding to a large extent governs
the policy and nature of regional media.
An overwhelming predominance of state money in the
mass media produces a non-market model with far-reaching
consequences. A predominance of advertising capital
produces a market model, also with far-reaching -
including negative - consequences, inasmuch as the
state of the press in such a situation is dependent
on the state of the market.
Our analysis is based on the assumption that the
proportion of advertising revenues and state funding
in regional media budgets is closely linked with the
level of press freedom. It should be noted, however,
that this is only a very rough, approximate indicator
of the economic freedom of the press in a region.
A predominance of advertising revenues in media
budgets definitely results in a certain dependence
on the advertiser, which of course restricts press
freedom to a certain degree. But this dependence can
in no way compare to the barriers imposed by dependence
on the state. Firstly, there is only one government,
so there is no alternative or escape from dependence
on it. On the other hand, there are many advertisers
and the extent of dependence on each one is counterbalanced
by the dependence on the others. Secondly, the major
requirement of advertisers for media is that they
provide the maximum possible exposure to the consumer.
As such, this type of dependence encourages mass media
to expand their audience of readers, viewers and listeners
by providing a quality product on a competitive media
market.
Dependence on state funding means dependence on
officials with a vested interest in preserving their
power and stabilizing the existing order. This inevitably
leads to interference in editorial policy, various
forms of censorship, and deprivation of press freedom.
Advertisers are not interested in interfering with
press content, as this can lead to reduced circulation
or audiences. Officials provide funds for the purpose
of influencing the information made public by the
media. The budget is the basis of local governmental
policy, and the manner in which it is distributed
can say more about that policy than any analysis of
the public addresses given by a regional leader.
Table 1 presents data on regional budgets in which
money is earmarked for mass media. The share of the
overall budget earmarked for media is a significant
indicator of local government policy.
For purposes of comparison, we will divide the various
territorial entities into groups, and rank them in
decreasing order within each group according to the
percentage of the budget earmarked for mass media.
The nationwide average budget share earmarked for
mass media expenditure is 0.46%.
Table 1
| No.
| Territorial Entity
|
Total Budget(rubles)
|
Mass media expenditure (rubles)
|
Municipal mass media expenditure
(rubles)
|
Expenditure on TV and radio
broad-
casting (rubles)
|
Expenditure on print media
(rubles)
|
Percentage of overall budget
earmarked for mass media
|
| Group 1. Richest Regions
|
| 1
| Yamalo-Nenets Autonomous District
|
24 466 000.0
|
392 200.0
|
|
|
|
1.60
|
| 2
| Krasnodar Territory
|
8 015 979.0
|
96 500.0
|
23 500.0
|
68 250.0
|
28 250.0
|
1.20
|
| 3
| Tumen Region
|
5 259 306.0
|
60 000.0
|
1 050.0
|
2 480.0
|
4 310.0
|
1.14
|
| 4
| Vologda Region
|
4 514 458.7
|
43 810.0
|
1 420.0
|
|
8 000.0
|
0.97
|
| 5
| Moscow
|
152 149 841.0
|
1 463 535.0
|
|
1 320 935.0
|
77 188.0
|
0.96
|
| 6
| Khanty-Mansisk Autonomous District
|
18 547 622.0
|
158 475.0
|
|
80 916.0
|
77 559.0
|
0.85
|
| 7
| Orenburg Region
|
4 608 839.0
|
26 757.0
|
|
7 704.0
|
19 053.0
|
0.58
|
| 8
| Republic of Dagestan
|
7 751 760.0
|
44 360.0
|
|
7 307.0
|
|
0.57
|
| 9
| Republic of Sakha (Yakutia)
|
22 107 782.0
|
118 884.0
|
|
54 613.0
|
61 395.0
|
0.54
|
| 10
| Republic of Tatarstan
|
19 635 544.0
|
104 326.0
|
7 500.0
|
50 000.0
|
49 146.0
|
0.53
|
| 11
| Republic of Bashkortostan
|
15 169 800.0
|
80 032.0
|
1 000.0
|
|
|
0.53
|
| 12
| Altai Territory
|
4 263 937.0
|
21 853.0
|
100.0
|
|
9 641.0
|
0.51
|
| 13
| Stavropol Territory
|
4 618 652.0
|
23 341.0
|
1 323.0
|
11 628.0
|
11 713.0
|
0.51
|
| 14
| Volgograd Region
|
5 160 689.0
|
25 297.0
|
458.0
|
2 000.0
|
23 297.0
|
0.49
|
| 15
| Nizhny Novgorod Region
|
6 445 012.0
|
31 042.0
|
4 900.0
|
|
|
0.48
|
| 16
| Chelyabinsk Region
|
4 955 867.0
|
22 280.0
|
|
|
|
0.45
|
| 17
| Primorsk Territory
|
7 077 401.0
|
28 417.0
|
11 000.0
|
17 641.0
|
10 776.0
|
0.40
|
| 18
| St. Petersburg
|
34 142 300.0
|
132 805.6
|
|
73 075.6
|
59 730.0
|
0.39
|
| 19
| Moscow Region
|
14 282 680.4
|
55 329.1
|
|
40 641.5
|
12 217.7
|
0.39
|
| 20
| Novosibirsk Region
|
5 549 832.8
|
17 726.1
|
13 680.0
|
4 300.0
|
4 817.0
|
0.32
|
| 21
| Krasnoyarsk Territory
|
11 300 680.0
|
25 940.0
|
4 640.0
|
|
25 940.0
|
0.23
|
| 22
| Rostov Region
|
6 489 756.9
|
10 497.1
|
1 500.0
|
2 000.0
|
8 497.1
|
0.16
|
| 23
| Samara Region
|
7 803 717.0
|
11 011.0
|
5 000.0
|
5 800.0
|
5 211.0
|
0.14
|
| 24
| Sverdlovsk Region
|
11 633 436.0
|
15 007.0
|
7 800.0
|
|
15 007.0
|
0.13
|
| 25
| Khabarovsk Territory
|
9 085 438.0
|
5 323.0
|
2 076.0
|
3 163.0
|
550.0
|
0.06
|
| 26
| Kemerovo Region
|
21 156 916.0
|
2 646.0
|
553.0
|
|
2 646.0
|
0.01
|
| 27
| Perm Region
|
13 318 772.0
|
560.0
|
|
110.0
|
450.0
|
0.00
|
| Group 2. Medium Regions
|
| 1
| Ulyanovsk Region
|
2 453 651.1
|
25 000.0
|
1 541.0
|
1 000.0
|
24 000.0
|
1.02
|
| 2
| Republicof Mordovia
|
2 190 808.3
|
19 550.0
|
|
3 050.0
|
16 500.0
|
0.89
|
| 3
| Arkhangelsk Region
|
2 802 829.0
|
24 750.0
|
3 500.0
|
|
24 750.0
|
0.88
|
| 4
| Leningrad Region
|
4 075 316.0
|
34 800.0
|
|
14 900.0
|
6 500.0
|
0.85
|
| 5
| Republic of Kabardino-Balkaria
|
2 982 667.0
|
24 628.0
|
nbsp
|
1 200.0
|
23 428.0
|
0.83
|
| 6
| Republicof Udmurtia
|
2 765 879.0
|
18 899.0
|
5 300.0
|
5 591.0
|
13 308.0
|
0.68
|
| 7
| Komi Republic
|
3 926 958.0
|
24 822.0
|
700.0
|
2 045.0
|
18 624.0
|
0.63
|
| 8
| Omsk Region
|
3 976 917.9
|
23 301.8
|
5 000.1
|
7 300.0
|
16 001.8
|
0.59
|
| 9
| Tver Region
|
2 352 620.0
|
10 640.0
|
2 085.2
|
|
10 640.0
|
0.45
|
| 10
| Republic of Karelia
|
2 223 768.0
|
9 902.0
|
|
|
6 803.0
|
0.45
|
| 11
| Voronezh Region
|
2 240 917.0
|
9 350.0
|
4 362.0
|
|
5 000.0
|
0.42
|
| 12
| Lipetsk Region
|
3 368 681.0
|
13 398.0
|
|
2 000.0
|
6 932.0
|
0.40
|
| 13
| Pskov Region
|
2 409 636.3
|
9 481.0
|
2 373.7
|
1 200.0
|
8 281.0
|
0.39
|
| 14
| Belgorod Region
|
2 659 523.0
|
10 305.0
|
1 110.0
|
|
10 305.0
|
0.39
|
| 15
| Kursk Region
|
3 954 431.0
|
14 272.0
|
204.0
|
|
14 272.0
|
0.36
|
| 16
| Tula Region
|
1 976 022.7
|
7 051.1
|
1 200.0
|
|
7 051.1
|
0.36
|
| 17
| Saratov Region
|
3 300 339.8
|
11 162.0
|
|
|
9 482.0
|
0.34
|
| 18
| Magadan Region
|
3 680 801.0
|
11 577.0
|
|
6 559.0
|
5 018.0
|
0.31
|
| 19
| Sakhalin Region
|
2 179 989.0
|
6 515.0
|
|
2 500.0
|
4 015.0
|
0.30
|
| 20
| Tambov Region
|
2 091 920.1
|
5 826.2
|
529.0
|
|
5 826.2
|
0.28
|
| 21
| Irkutsk Region
|
4 234 686.0
|
9 744.0
|
4 200.0
|
|
5 000.0
|
0.23
|
| 22
| Murmansk Region
|
2 761 600.0
|
6 200.0
|
5 000.0
|
500.0
|
5 700.0
|
0.22
|
| 23
| Chita Region
|
2 246 568.6
|
4 450.0
|
|
|
4 450.0
|
0.20
|
| 24
| Republic of Buryatia
|
2 441 216.0
|
4 182.0
|
|
366.0
|
3 816.0
|
0.17
|
| 25
| Yaroslavl Region
|
2 528 252.0
|
3 500.0
|
1 690.6
|
|
|
0.14
|
| 26
| Tomsk Region
|
3 230 331.0
|
3 000.0
|
4 031.0
|
1 000.0
|
|
0.09
|
| 27
| Amur Region
|
2 262 805.0
|
340.0
|
1 367.0
|
|
340.0
|
0.02
|
| Group 3. Poor Regions
|
| 1
| Orel Region
|
1 328 873.0
|
15 220.0
|
300.0
|
4 270.0
|
10 950.0
|
1.15
|
| 2
| Karachaevo-Cherkess Republic
|
737 952.2
|
7 376.2
|
|
|
|
1.00
|
| 3
| Bryansk Region
|
1 483 159.0
|
13 100.0
|
614.0
|
400.0
|
11 500.0
|
0.88
|
| 4
| Kostroma Region
|
1 829 447.0
|
14 908.0
|
950.0
|
1 400.0
|
13 508.0
|
0.81
|
| 5
| Adygei Republic
|
967 574.0
|
6 781.0
|
|
67.0
|
6 683.0
|
0.70
|
| 6
| Republic of Altai
|
892 809.0
|
6 252.0
|
|
|
4 760.0
|
0.70
|
| 7
| Novgorod Region
|
1 093 677.0
|
7 424.0
|
950.0
|
1 264.0
|
4 889.0
|
0.68
|
| 8
| Republicof Chuvashia
|
1 938 967.5
|
12 174.5
|
879.7
|
575.0
|
11 599.5
|
0.63
|
| 9
| Ryazan Region
|
1 803 514.0
|
10 820.0
|
|
3 150.0
|
7 670.0
|
0.60
|
| 10
| Agin-Buryat Autonomous District
|
270 263.0
|
1 484.0
|
|
|
|
0.55
|
| 11
| Republic of Alania (North Osetia)
|
1 812 297.0
|
8 980.0
|
|
|
3 380.0
|
0.50
|
| 12
| Republic of Mari-El
|
1 303 702.0
|
6 254.0
|
|
|
|
0.48
|
| 13
| Kirov Region
|
1 900 625.0
|
9 116.0
|
806.0
|
|
8 716.0
|
0.48
|
| 14
| Republic of Kalmykia
|
1 545 964.0
|
6 000.0
|
260.0
|
|
|
0.39
|
| 15
| Ust-Orda Autonomous District
|
534 656.0
|
1 701.0
|
|
|
|
0.32
|
| 16
| Ivanovo Region
|
1 671 181.6
|
4 769.4
|
400.0
|
60.0
|
4 709.4
|
0.29
|
| 17
| Smolensk Region
|
1 586 371.0
|
4 490.0
|
|
|
|
0.28
|
| 18
| Astrakhan Region
|
1 358 490.0
|
3 457.0
|
515.0
|
300.0
|
3 157.0
|
0.25
|
| 19
| Kurgan Region
|
1 583 641.0
|
3 800.0
|
1 600.0
|
|
3 800.0
|
0.24
|
| 20
| Kaluga Region
|
1 551 553.0
|
3 570.0
|
|
235.0
|
3 335.0
|
0.23
|
| 21
| Republic of Khakasia
|
1 369 435.0
|
3 110.0
|
|
500.0
|
2 610.0
|
0.23
|
| 22
| Jewish Autonomous Region
|
669 726.0
|
1 482.0
|
600.0
|
483.0
|
999.0
|
0.22
|
| 23
| Penza Region
|
1 571 148.0
|
2 313.0
|
1 422.0
|
|
|
0.15
|
| 24
| Komi-Permyak Autonomous District
|
542 374.0
|
723.0
|
|
|
723.0
|
0.13
|
| 25
| TaimyrAutonomous District
|
788 949.0
|
990.0
|
|
|
|
0.13
|
| 26
| Nenets Autonomous District
|
1 079 420.9
|
1 007.0
|
|
|
1 007.0
|
0.09
|
| 27
| Kaliningrad Region
|
1 747 050.0
|
1 300.0
|
400.0
|
|
1 300.0
|
0.07
|
| 28
| Vladimir Region
|
1 373 580.0
|
971.0
|
623.0
|
|
|
0.07
|
The first group includes ten of the richest regions
where the amount of mass media expenditure accounts
for over 0.5% of the budget. These are the regions
where local administrations endeavor to gain a strong
position on the information market. One of the leaders
in this area is Krasnodar Territory. At 1.2%, the
record-breaking budget share for mass media expenditure
results in a high level of media saturation and ensures
an informational climate favorable to the local authorities.
The mass media situation in Moscow is of particular
interest. The gigantic mass media budget of nearly
1.5 billion rubles is almost entirely spent on the
activities of the channel TV-Tsentr and is largely
indicative of the Moscow administration's aspiration
to carry out a distinct informational policy not only
in Moscow, but throughout Russia. The Moscow administration
manages to maintain its influence on the city's mass
media market rather successfully, without creating
its own costly media. Instead, it does so by exerting
influence on the leading mass media holding companies
through financial structures with which they are closely
connected.
The large amount of budgetary funds spent on mass
media in the Republics of Bashkortostan, Tatarstan,
Sakha (Yakutia) and Dagestan allow them to follow
a paternalistic policy and maintain the overall loyalty
of journalists to their administrations. The second
group (medium-budget regions) is led by the Ulyanovsk
Region, followed by the Republics of Mordovia, Komi,
Udmurtia and Karelia. In the third group (small-budget
regions), the highest levels of state expenditure
on the media are found in Altai and Adygei Republics,
and Orel and Bryansk Regions.
ANALYSIS OF ADVETRTISING BUDGETS
Advertising budgets are a market counterbalance to the
paternalistic influence of state funding. Unfortunately,
the size of mass media advertising budgets are secret
and we are therefore forced rely on expert estimates.
According to specialists at the Russian Association
of Advertising Agencies, the total volume of the advertising
market last year amounted to USD 760 million: 274 million
for TV, 45 million for radio and 342 million for print
media.
Note that 80% of advertising revenue remains in
Moscow, with only 20% going to regional print and
electronic media.
The overall federal mass media budget was 5,724,879
thousand rubles or USD 204.5 million, USD 186 million
going to TV and USD 12 million to print media.
The aggregate total of the state media budgets of
all Russia's territorial entities combined was USD
110 million. Unfortunately, not all municipal budgets
were analyzed, but their aggregate total is somewhere
under USD 5 million. Thus, the total amount of state
funds spent on mass media is approximately USD 319.5
million. In other words, the level of market orientation
of the Russian mass media can be estimated at about
70%.
About two-thirds of media revenues come from advertising
and approximately one-third come from the state. Note
that to simplify the analysis, we do not take into
account the other three sources of income: money from
individual consumers, funds from non-governmental
sponsors and re-allocation of funds within media holding
companies.
However, these seemingly extremely optimistic results
are diminished if we consider the fact that around
80% of all advertising activity remains in Moscow
on the national TV channels and the dozens of national
newspapers and magazines. As such, only USD 150 million
of advertising revenue actually reaches the regions,
with the aggregate amount of state funding for mass
media totaling about USD 160 million. Of this amount,
USD 39.6 million constitutes the cumulative budget
of the state-owned regional TV and radio companies
(GTRKs), about USD 5.4 million is allocated from the
federal budget to maintain regional or municipal newspapers,
about USD 110 million represents the cumulative media
budget of all the territorial entities and around
5 million dollars comes from municipal media budgets.
Thus, we can infer that the level of market orientation
of regional media is somewhere below 48%. In other
words, the media markets in Russia are, on average,
slightly more dependent on state funding than on advertising
revenues.
The regions of the Russian Federation differ vastly
from one another in terms of the level of market orientation
of the mass media. To compare regional media markets,
we have used data kindly furnished by Internews and
GfK-VTsIOM. Following is a comparison of state funding
and advertising revenues for each region:
Analysis of Mass Media Funding in 49 Regions (mln.
rubles)
| No
| Region
| Advertising budget
| Amount of state support
| Mass media budget
| Share of total media
budget accounted for by advertising (%)
|
| 1
| Sverdlovsk Region
|
294.86
|
42.98
|
337.84
|
87.28
|
| 2
| Perm Region
|
106.63
|
16.63
|
123.26
|
86.51
|
| 3
| Lipetsk Region
|
110.20
|
18.74
|
128.94
|
85.47
|
| 4
| Tomsk Region
|
116.32
|
23.44
|
139.76
|
83.23
|
| 5
| Kemerovo Region
|
86.45
|
17.88
|
104.33
|
82.86
|
| 6
| Rostov Region
|
121.89
|
27.74
|
149.64
|
81.46
|
| 7
| Kaliningrad Region
|
69.62
|
16.42
|
86.04
|
80.92
|
| 8
| Saratov Region
|
111.41
|
28.36
|
139.77
|
79.71
|
| 9
| Vladimir Region
|
28.50
|
7.30
|
35.80
|
79.61
|
| 10
| Samara Region
|
112.93
|
29.24
|
142.17
|
79.44
|
| 11
| Novosibirsk Region
|
219.73
|
58.01
|
277.74
|
79.11
|
| 12
| Voronezh Region
|
102.60
|
27.24
|
129.84
|
79.02
|
| 13
| Penza Region
|
43.43
|
11.70
|
55.13
|
78.77
|
| 14
| St. Petersburg
|
480.43
|
132.81
|
613.23
|
78.34
|
| 15
| Yaroslavl Region
|
33.96
|
10.90
|
44.85
|
75.71
|
| 16
| Smolensk Region
|
35.63
|
11.78
|
47.40
|
75.16
|
| 17
| Kirov Region
|
54.15
|
20.63
|
74.78
|
72.41
|
| 18
| Chelyabinsk Region
|
97.72
|
41.20
|
138.92
|
70.34
|
| 19
| Omsk Region
|
95.19
|
41.14
|
136.33
|
69.83
|
| 20
| Nizhny Novgorod Region
|
116.55
|
50.78
|
167.33
|
69.65
|
| 21
| Krasnoyarsk Territory
|
145.12
|
63.49
|
208.61
|
69.56
|
| 22
| Ryazan Region
|
35.15
|
15.49
|
50.64
|
69.42
|
| 23
| Irkutsk Region
|
73.53
|
36.79
|
110.32
|
66.65
|
| 24
| Republic of Tatarstan
|
220.20
|
111.83
|
332.03
|
66.32
|
| 25
| Stavropol Territory
|
71.61
|
40.58
|
112.19
|
63.83
|
| 26
| Tula Region
|
23.37
|
13.31
|
36.68
|
63.71
|
| 27
| Ivanovo Region
|
17.10
|
9.85
|
26.95
|
63.46
|
| 28
| Kaluga Region
|
15.47
|
8.99
|
24.46
|
63.26
|
| 29
| Kurgan Region
|
20.27
|
12.13
|
32.40
|
62.56
|
| 30
| Altai Territory
|
53.44
|
36.68
|
90.12
|
59.30
|
| 31
| Primorsk Territory
|
121.89
|
86.16
|
208.05
|
58.59
|
| 32
| Volgograd Region
|
58.07
|
42.69
|
100.76
|
57.63
|
| 33
| Astrakhan Region
|
19.70
|
14.60
|
34.30
|
57.43
|
| 34
| Orel Region
|
28.50
|
21.56
|
50.06
|
56.93
|
| 35
| Khabarovsk Territory
|
55.45
|
42.38
|
97.82
|
56.68
|
| 36
| Tambov Region
|
14.88
|
11.38
|
26.27
|
56.66
|
| 37
| Republic of Udmurtia
|
49.16
|
37.92
|
87.08
|
56.46
|
| 38
| Arkhangelsk Region
|
42.93
|
45.94
|
88.86
|
48.31
|
| 39
| Bryansk Region
|
14.25
|
20.47
|
34.72
|
41.04
|
| 40
| Republic of Chuvashia
|
18.24
|
26.47
|
44.71
|
40.80
|
| 41
| Ulyanovsk Region
|
22.80
|
34.20
|
57.00
|
40.00
|
| 42
| Orenburg Region
|
24.34
|
37.11
|
61.45
|
39.62
|
| 43
| Belgorod Region
|
10.87
|
16.92
|
27.79
|
39.12
|
| 44
| Tyumen Region
|
47.74
|
77.24
|
124.98
|
38.20
|
| 45
| Krasnodar Territory
|
86.77
|
141.27
|
228.04
|
38.05
|
| 46
| Republic of Bashkortostan
|
56.29
|
97.30
|
153.59
|
36.65
|
| 47
| Tver Region
|
8.91
|
20.05
|
28.96
|
30.75
|
| 48
| Murmansk Region
|
13.40
|
34.43
|
47.82
|
28.01
|
| 49
| Kursk Region
|
7.13
|
19.10
|
26.22
|
27.17
|
Inspection of these 49 regions has revealed that
the extent of market orientation of the media varies
widely from region to region. It should be borne in
mind that there is no region among the 49 studied
that does not have at least some form of advertising
market, and this represents approximately one third
of all Russia's regions.
If we compare, for example, funding for the media
in the Belgorod and Sverdlovsk Regions, it is clear
that media companies operating in the Belgorod Region
depend largely on the regional authorities, while
the degree of independence in the Sverdlovsk Region
is much higher, at least from a monetary standpoint.
The role of advertising budgets as the economic
basis of media freedom has been convincingly confirmed
by the results of this study.
The chapter covering the classification of media
models demonstrates that there is an extremely close
correlation between the volumes of regional advertising
markets and the extent of press freedom.
