**The Media Environment**

##  

##  

##  in

**Bosnia and Herzegovina**

# 

# An Assessment for USAID/Bosnia 

**Gwyneth Henderson Jasna Kilalic Boro Kontic**

**January 2003**

Contents

1\.
Foreword............................................................\...3

### 1. Introduction............................................................3

2\. Media Law and Policy Environment.............................4

3\. The Media
Market....................................................8

A.  Public Broadcasting ...........................................10

B.  Private Television..............................................12

C.  Public versus Private TV in the Market...................16

D.  Private Radio....................................................17

E.  Print Media.......................................................19

F.  News Agencies..................................................24

G.  Independent Production....................................\...24

##### 

#####  4. Journalist Associations....................................24

5\. Loans, Financing and Management......................... 25

6\.
Conclusions..........................................................26

7\. Recommendations..................................................29

A.  Sustainability, Business & Management.......... ........29

B.  Journalism.........................................................31

C.  Programme Production.........................................33

D.  Regulation.........................................................33

E.  Research...........................................................34

Appendices

#### 

#### I. List of Organisations and Individuals Consulted

II\. Top Advertisers in Bosnia and Herzegovina

III\. December 2002 Audience Share Figures TV

#### IV. Scope of Work

###### 

**1. Foreword**

Since 1996 the U.S. Government (USG) has invested some \$34m to support
independent broadcast and print media in Bosnia and Herzegovina (BiH) -
\$14.5m since 1999. This level of assistance cannot be sustained and
USAID is now considering how to prioritise the funds they will have
available for the years 2003 to 2006. This report, commissioned by
USAID/Bosnia to aid their decisions, looks at the current situation for
the media, how it may develop and makes some recommendations for their
consideration. During the field work we were able to visit some 43
organisations -- media outlets; regulators; international missions;
media support groups; agencies and research companies. Attachment A
provides a list of individuals interviewed. The media outlets were, in
the main, those which have received support, small or large, from USAID
over the last five years. Altogether we spoke to approximately 70 people
and we would like to record our deep appreciation for the time we were
given and the openness with which our questions were answered and for
the amount of tea and coffee which was so warmly pressed on us.

# 

#  2. Introduction

Free, independent media play a key role in building democracy, promoting
open debate and helping to hold governments and public institutions to
account. Research has shown that a free flow of information bolsters
economic competition and levels of education. For BiH, with its complex
and polarised ethnic and political structures, building national and
local media that properly serve the interests of all its citizens, and
the nation as a whole, has been, at best, problematic.

The events of the years 1991 to 1996 left the country ravaged by war,
with no economy, its population depleted and with its people
traumatised. In 1996 BiH then had to begin both the process of
post-communist transition and a process of post-war inter-ethnic
reconciliation. The country's political structures[^1] continue to be
dominated by parties with pronounced nationalistic programmes. Although
other parties emerged and the coalition grouping, the Alliance for
Change, won power in 2000 in the Federation, in the elections of October
2002 all three presidential seats were won by nationalists, and
nationalist parties also made a strong showing in the State Parliament,
as well as in both entities' Parliaments. Voter turnout at 54% reflected
widespread disillusionment.

Life for the people of BiH is hard -- official unemployment hovers
around 40% (although the UNDP report of 2002 concludes that taking the
'grey market' into account, the figure is actually 22.2%); the average
salary is around 419KM and BiH's trade deficit in the first six months
of 2002 reached 3,168 billion KM.[^2] The High Representative in his new
year message made it clear too that the situation will get worse before
it gets better. The market therefore is extremely weak -- this of course
is a major factor in prohibiting the growth of healthy, robust,
pluralist and sustainable media. Another factor is that during the war
most media was used as propaganda to bolster nationalism in whichever
community it was serving -- this has had a lasting effect in that most
people still use outlets which they perceive as "theirs" and which they
believe reflect, to an extent, their views, perspectives and prejudices.
Lastly a factor sometimes overlooked -- BiH lost huge numbers of
experienced and excellent editors, journalists and programme makers
during and after the war. The next generation lost years of their youth
and education.

# 3. Media Law and Policy Environment

The legal situation for the media in BiH was, and to an extent remains,
complex and sometimes contradictory. Until the last three years it was
determined to a large extent by state structure, the judiciary and
political/ethnic affiliations. This has been complicated by the cantonal
structure of the Federation (10 in all) and the pronounced centralism of
the Republika Srpska. In the last three years, either imposed directly
by OHR decision, or through parliamentary legislation, the situation is
somewhat changed.

In the early years of international intervention, responsibility for
broadcasting was split between two agencies -- the Telecommunications
Regulatory Agency (TRA), responsible amongst other things for frequency
management, and the Independent Media Commission (IMC), responsible for
the licensing of radio and television stations, programme monitoring and
standard setting in terms of establishing codes of practice. In March
2001 the High Representative amalgamated the two agencies creating the
Communication Regulatory Authority (CRA). The OHR Decision states "All
acts, codes, rules, guidelines and decisions made by the IMC and the TRA
shall remain in force unless replaced or amended by decisions made by
the CRA". Since the new independent regulatory body was created there
have been two important developments. First, the CRA no longer has a
monitoring unit; breaches of terms and conditions are only addressed if
a formal complaint is made to them. Second, perhaps of more concern to
commercial broadcasters, was the passing of the law on public
broadcasting[^3].

Many of those interviewed expressed the view that the CRA is not
properly independent and cited 'bad' decisions during the last round of
station licensing but without presenting firm evidence. In the current
situation suspicions are inevitable but if accusations seem well founded
it may be valuable to provide advice or legal support to the
complainant. The CRA was also accused several times of not responding to
accusations of unfair practice -- however no commercial station seems to
have made a formal complaint in the way laid down in the CRA's rules.
Stations should be both encouraged and supported in doing so
[if]{.underline} the accusations are well founded and evidence can be
produced. The issue of unfair practice is directly connected to the new
PBS law. Whilst the authors of this report support the existence of
public service broadcasting, national and regional broadcasting on a
European model, they are aware that some people believe the current law
may have the potential to undermine pluralism in BiH. This is because of
the large slice of the advertising market national and entity public
broadcasters can command through their superior transmitter capacity and
thus coverage of the population. Because of this superior national
coverage they can currently command the right to broadcast key sporting
and other events; because they have an income from subscriptions -- and
currently from leasing transmitters[^4]. The problem is compounded by
the complex, expensive system that has been invented. The system is -
one network each for Republika Srpska (RT RS) and the Federation
(FedTV), and a third for the whole country, PBS. (Currently PBS
broadcasts its programmes on the two entity networks -- it cannot have
its channel until there is a new transmitter network and this is still
in the tendering process with the European Union.) Not one person
interviewed currently believes it is sustainable -- in particular the
intended PBS network. Indeed many seem to think PBS will never get on
air as a separate/new channel. Whilst the current political realities
are recognised, everyone seems to believe that even in the medium term
one network, with regional opt outs and some regional production, will
have to come into being. (These views are those of the people we spoke
to within public broadcasting as well as others.) The view is based
largely on the size of BiH -- in a country of 3.8m people, 2.4m adults,
two entity and one national network is simply too many for society to
afford.[^5] The situation is compounded by the sheer number of people
employed in public broadcasting -- 400+ by FedTV, almost six hundred by
RT RS and 900+ by PBS. (PBS under the new structures holds all the
technical staff and equipment for which FedTV has to pay according to
usage. RS hold on to their equipment and technical support services for
now.) It is very difficult to get rid of surplus staff -- largely
because of the labour laws belonging to socialist times -- however until
the public broadcasters achieve sensible levels of staffing their
financial situation will remain parlous. Longer term there is a view
that [if]{.underline} the level of subscription collection rises
dramatically, [if]{.underline} the three broadcasters can be persuaded
to produce complementary schedules and [if]{.underline} they can agree
on a common infrastructure to achieve economies of scale, all could
survive.

There is no question that trying to collect subscriptions through the
electricity bills in the Federation and telephone bills in RS, is
inefficient and ineffective -- at most 45% are paid in the Federation to
Republika Srpska's 18% or 30% depending on the source. Difficulties in
collection are hardly surprising because people can opt not to pay the
subscription when paying the utilities charge. There is an idea --
within the OHR -- to improve the situation by transferring the
collection of subscriptions throughout to telephone bills. The
advantages are that regulation of telephones is also the responsibility
of the CRA, who could therefore lay down strict rules for collection,
and that it would be a progressive tax since poorer people do not have
telephones and therefore would not be required to pay. (According to
Prism Research 20% of households do not have a telephone.) There is a
view, in the OHR, and shared by the BBC Consultancy Team working with
FedTV, PBS and RT RS, that this is urgent because the sooner public
services get out of their dependency on advertising the better. However
this change would need political support, a common approach and changes
in the Law.

The PBS law determines that facilities, resources and property will be
divided. This process is intended to be complete by mid 2003. Whilst
there is great appreciation of the 'crucial' role of the internationals
in separating broadcasting from politics and creating a new situation
for the public broadcasters, there is some resentment at the cost of the
BBC consultancy team in FedTV and PBS, which costs \$4.5m. The Director
of RT RS, one month into his tenure, is more positive and believes the
structural and cultural changes needed cannot be achieved without the
BBC.

The concerns held by the commercial sector and others about the amount
of advertising the law allows on public networks, and the assertion that
it will lead to the demise of commercial broadcasting, are hard to
substantiate. We return to this topic in the section 'The Media Market
2003'. It may be too that in the heightened atmosphere surrounding the
imposition of the public broadcasting law, views and positions were
taken which have now dissipated. However many commercial stations
believe that the public broadcasters, in particular Fed TV, are 'price
dumping' their advertising slots thereby indulging in unfair practice
and breaking CRA rules. Under the regulations the public broadcasters
have to report, and clear their rates with the CRA. According to Mreza
Plus[^6], Fed TV has been price dumping. When Mreza Plus informed CRA of
this problem, the response was to ask for the accusation to be submitted
as a formal complaint. This has not yet been done. The subject of price
dumping is a recurrent theme. There is no doubt that in return for
various commitments plus the amount of total spend by the advertiser,
discounts of around 70% are offered. However all the agencies agree that
this is normal practice and that [all]{.underline} stations offer heavy
discounts. Therefore, all stations share the responsibility for keeping
the price depressed. It can be argued that public broadcasters have a
special responsibility for open and transparent practice but, given the
financial position of the public broadcasters, it is unlikely the
argument would have much weight. It is also the case that no public
broadcaster is yet winning enough advertising minutes to reach the
permitted limit. The amount of advertising the public broadcasters can
carry is a matter for the CRA as well although the current level is
spelled out in the law. The amount currently allowed is consistent with
European norms. There are no restrictions on commercial broadcasters.
Under the law too the CRA will review the level after five years -- this
may be too long a period and the situation will need to be monitored. It
is believed too that the CRA is giving priority to public broadcasters
in allocating transmitter sites. The CRA confirmed that they do give
priority for national coverage to the public sector -- to determine
whether this is 'fair', or whether it simply means the public
broadcasters get what they want, would need extensive and detailed
research site by site.

The CRA has set up a small research department but has no funds to do
anything original or substantial. There is little or no information
available that is useful for broadcasters or regulators -- audience
research is post hoc, only gives a snapshot and frequently is believed
to be massaged to suit the purchaser. We recommend that USAID consider
further support to the CRA to enable it to carry out the sort of
research both it and the media in BiH need. To do the sort of extensive
work needed (especially given the lack of accurate demographic data)
would be expensive but other donors would be highly likely to consider
such projects in partnership.[^7]

The CRA is an independent regulatory authority. When questioned about
their ability to remain so the answer was not entirely reassuring. They
said, the main issue may be their ability to win and retain an adequate
budget if they upset the politicians too much; that by the autumn there
will be no internationals on the staff; if the law is good they should
be safe but in the last resort it will be up to the Office of the High
Representative to protect them. Views expressed by some in the
international community confirmed this somewhat less than confident view
and believe it would be in the CRA's interests long term to have an
international in a key senior position beyond the autumn. The results of
the October election have led to this change in view. The view has also
been expressed that continuing international donor support will be
important in strengthening the CRA's independence. For the mid-term,
there is a view amongst Europeans in the international community, that a
better way to protect the CRA's independence would be to have it funded
by the broadcast and telecommunications industries. The broadcasters
would pay a percentage of their licence fee and the telecommunications
companies a percentage of their revenue. The only role then for the
Council of Ministers would be to agree some sort of cost of living
increase after the original fees have been set. Of course annual
independent audits would be crucial. The authors support the idea of
such audit. There is concern too that the proposed Competition
Regulation Authority may be another problem for the CRA. The CRA alone
should regulate the media market.

Beyond the law for public broadcasting and the creation of the CRA,
other important legislation for the media has been passed into law. One
concerns libel and defamation and the other Freedom of Access to
Information. The Freedom of Information legislation came into effect in
2001. We were unable to find evidence that it has yet made much
difference to journalists seeking information -- institutions do not
refuse access to information - they simply do not respond to the
requests. It is important that some well-publicised 'test' cases be
pursued if organisations are to begin to understand what their
responsibilities are to be transparent and accountable, and if the
legislation is to have any impact. The provision of a short booklet for
journalists on this and other legal issues could be a valuable
contribution. Similarly the provision of a well-publicised legal
support/advice fund for outlets with a serious story/issue to explore
could make a big difference to their ability to utilise the legislation
and do their job. We recommend both ideas to USAID**.**

The decriminalisation of libel and defamation is greatly welcomed --
however the welcome is somewhat tempered by the general despair at the
irresponsibility of the print media and the regular publication of
unsubstantiated accusation, gossip, rumour and personal attacks. The
view too seems to be that until the courts are reformed an individual is
unlikely to try to seek civil redress since it may take three, five or
even more, years for the case to be resolved. Regulation of the print
media is a proverbial 'hot' topic. Print's behaviour during the
elections has persuaded many who in principle are against anything other
than self-regulation that 'something must be done'. The creation of the
European Union funded Press Council, close to the UK model, did not have
much success in its first year of operation. There is universal
agreement that this is due in large part to the wrong person being
appointed to run it. Money was also a problem -- funding ran out in
November 2002. Thanks to the USA Public Affairs office and Press Now,
bridging funds were found. And as of January 17^th^ a longer term
solution is in place. The process is being overseen by the CRA's
Director of Communications. The Swedes have given operating funds for 12
months and there is additional funding from the British Embassy and IREX
for some activities; a new director is being sought immediately and it
is hoped he/she will be in place by mid-February; the Council, with a
Bosnian Vice Chairman, will meet six times a year rather than the
current four; the Council's secretariat will have a monitoring function
and, an important change, the Council will be able to raise complaints.

# 4. The Media Market 2003

There are simply too many media outlets in BiH -- and this was the only
proposition with which every one of the 70+ people we spoke to, agreed.
The latest CRA figures in January 2003 are 70 TV stations and 113 radio
stations. There are, according to MIB, 7 daily newspapers plus 6 from
Serbia and Croatia, and 46 magazines, plus 61 from outside, available.
The more interesting fact is that those within each sector believe it to
be true within their sector too -- whether it be public at the state,
entity canton or municipal level; commercial of every size and reach and
in every medium. too. There is too much radio; too much television and
too much print. BiH cannot possibly sustain so many outlets but the
situation in the country is that many, many media outlets are able to
access financial support in one way or another in many different ways,
so it is very hard to assess when the market may shrink to a more
rational level. The market is weak -- according to agency figures for
2002[^8] the available national revenue to be shared was 36m KM (5m KM
more than 2001) which breaks down as:-

TV -- 23m KM

Billboards etc. - 10m KM

Print -- 2m KM

Radio -- 1m KM[^9]^0^

This difficulty is compounded by a serious lack of demographic, media
consumption and market information that would allow proper analysis of
actual and potential markets for the media. There are a number of
research agencies in BiH. We recommend that USAID identify and employ an
expert in this field to assess the relative value of the work produced
by them for the media - capacities and competence. We further recommend
-- perhaps in conjunction with the CRA's needs - that USAID support the
necessary research to make audience measurement and research properly
meaningful. Currently stations only see research as a tool to assess
audience numbers to persuade advertisers to use their station --
understandable when next month's income is crucial, but research should
also be available to inform decisions about developing new programme
strands, and for competitive scheduling based on an understanding of the
potential and targeted audience. According to the Fabrika Agency there
is no TV programming for young people even though advertisers want it,
but what and when should, of course, be decided with knowledge and
understanding of the potential audience's preferences and when they are
available to watch.[^10]^1^ We also recommend that USAID support some
further skills transfer on the value of research to selected media
outlets. All agencies and research organisations interviewed said there
is little or no understanding of its importance and how it can or should
be used. In this, as with every type of needed training identified, all
organisations underlined the importance of skills transfer being done
through Bosnian institutions. Advertising agencies also/still complain
that many, if not most, outlets do not understand their role and see
them as competitors at best -- and the enemy at worst. However, almost
all stations complain about agencies -- in particular about their high
charges. One only passes on 35% of the cost to advertisers to stations
-- and as a result almost all use agencies very little. Most stations
said only 20% of their advertisements come from agencies -- 80% they win
for themselves. Given the dire financial situation most are operating in
this is hardly surprising -- and until there is a much bigger market of
big advertisers than now, this is unlikely to change. The list of the
fourteen biggest advertisers is attached as Appendix II -- SFOR is the
fourth and the Banja Luka Brewery, the fifth.

# Public Broadcasting Television

The structure of national and entity public broadcasting has already
been outlined. PBS is not yet a distinct network. Fed TV is a long way
the most successful overall and particularly in the Federation. The
coming competition between FedTV and the proposed PBS network is likely
to take its toll. It will be very hard for FedTV, as successor of BH TV,
to give up its past, and its current, leading position. RT RS has not,
and does not have the same success in Republika Srpska -- and is, as
outlined above, in a parlous state financially -- that may be a
contributory reason for the network's quality which is, by any
standards, poor. HRT Croatia wins the same audience share of 19% in RS
-- admittedly with three networks But these three organisations are only
part of public broadcasting in BiH. Most cantons and many municipal
authorities have their own radio and television stations. How much
public money is going into this tier is impossible to estimate but
overall it must be substantial. And of course they are fighting for a
share of the advertising cake too. Where stations are popular, FedTV and
TVTK the public station in Tuzla, their share of advertising revenues is
commensurate with their share of audience. FedTV is the most watched
station in BiH -- it has overall a 29% audience share -- within the
Federation it has 43%; TVTK has 30% of Tuzla canton.[^11]^2^

However almost all the official audience figures quoted by stations are
those provided by Mareco and should be treated with some caution since
they are based on research carried out in eleven main cities -- 7 in the
Federation and 4 in RS.[^12]^3^ Yet according to other research only 42%
of the total population live in urban areas. We understand too that
whether communities constitute urban, suburban or rural settlements has
not been defined. Once again the need for substantial and accurate
properly researched demographic/market information is underlined.

Amongst local public stations TV TK Tuzla is unusual in winning such a
large share of audience. In the other ten cities for which we have
figures the local station's audience share ranges between 5% and 17%. It
must be assumed their advertising revenues are commensurate. However of
course all the stations are also subsidised by the local authorities.
According to TV TK Tuzla the sum is relatively small and has to be spent
on salaries. Given they have a staff of 80 it is credible that this only
covers one third of their monthly outgoings -- the rest they have to
raise from other sources. At present they raise approximately 100k KM
from advertising revenue -- we assume the rest comes from barter deals.
However there is no doubt they receive too substantial 'in kind' support
from the authorities -- for example they pay no rent. The price for all
their support from the authorities is to cover all local political
affairs -- we understand from others in the city it also means they do
not reflect criticism of the authorities or their policies. The station
is deeply resentful of the tough restrictions placed on them by the
CRA - in particular the public service programming responsibilities;
only being allowed to carry four minutes of advertisements an hour to
FedTV's 6' - 8'; and being forced off their transmitter 'high' site in
favour of the national broadcasters.

The situation is further complicated TV TK complain, by the 'unfair'
competition from TV Tuzla -- a Mreza Plus partner. This was too a
station founded by local authorities -- it is in the last stages of
privatisation and by the end of January 2003 the remaining 27% owned by
the municipality will be bought by Rudhem, a controversial Swiss Bosnian
company which already has stock. However, TV Tuzla has a continuing
contract with the authorities for some programming but say there is no
editorial interference. The authors are highly sceptical of any deals in
which a station is paid by the authorities to make programmes for them.
TV TK also want to privatise but there is currently an OHR moratorium on
media privatisation. The moratorium was put in place until after the
last round of CRA licensing so should be lifted imminently.

We detail the situation in Tuzla as an example of how complex and murky
much of the financing and control of the media market in BiH remains.
The situation in Mostar is not dissimilar -- RTV Mostar, a private
station, is widely believed to take money from the local authorities. In
Bihac, the canton station RTV USK, also wants to privatise as soon as
possible. The station management are optimistic that they can do well
but with a staff of 80+ of which 30 are journalists; 30 administration
and the rest technical staff; but since 47% of their costs come from the
canton budget and they have an audience of 17% in Bihac, it is difficult
to share that optimism. They also currently cannot win even the
permitted 4 minutes an hour in advertisements allowed by the CRA. And
they are not confident about the process of privatisation -- "of the
privatisations that have happened in Bihac you can count on the fingers
of one hand those that have been done legally". They fear too that they
may be bought by a political grouping. The station says that they can
reflect criticism of the authorities 'if they want', leading to the
inescapable conclusion that currently they do not choose to do so.

We can only assume the Tuzla/Bihac scenarios are not entirely dissimilar
to many, if not most, canton and municipal stations. Many will fail if
they are placed properly in the market -- but many may survive,
purchased to be the voice of one or other grouping with an agenda. With
sufficient money to invest in entertainment blocks to complement local
programming, some may even flourish.

And according to BORAM Agency, 40% of radio stations are owned by rich
businessmen who 'just like to have their own station'.

We cannot see any reason why, at this stage, USAID should offer support
to public broadcasters but we recommend that as and when stations
privatise, the situation be monitored to determine if any may warrant
support because of the quality of output in an underserved locality. We
also recommend that any journalism training be open to young people from
the public stations so that an understanding of the principles and
practice of decent journalism, and of the role and responsibilities of
the media in a democracy, continue to be spread. We further recommend
that any such training be done through an existing Bosnian organisation
and so contribute to institution building in BiH.

**B. Private Broadcasting Television**

USAID has been the largest contributor by far to private/commercial
broadcasting in BiH but many other donor organizations have also spent
very substantial sums of money to support it. In the early years, before
any semblance of order or regulation could be instituted, the key
objective was to simply try and support rational voices. We have no need
here to rehearse the disgraceful way in which the media was used during
the long years of conflict. Inevitably some of the choices made were
wrong, and some money was wasted, but the result is that there are
independent voices present -- and were present long before the
international community made any headway with public broadcasting. The
unfortunate saga of OBN must long remain a salutary case history. The
story is well known and needs no rehearsal here -- however the fall-out
from it reverberates still. From the authors' perspective the
fundamental error with OBN was in inventing a new organisation rather
than developing a service through an existing, decent and potentially
viable outfit. The second error was in retaining international
management for the network without either the appropriate skills to run
a commercial network, or the empathy to recognise the value of member
stations The third error was to keep chucking large sums of money at it
rather than spending the cash more widely on stations. The fourth error
was in the way support for OBN was finally ended. It is a matter of
regret that OBN has been sold to a private company with mixed overseas
and Bosnian ownership, and nothing is known about what has happened to
the purchase price of its assets.[^13]*^4^* Lastly the whole saga did
enormous damage to the image of the international community in BiH --
and to the relationships within it. This last point is still evident and
still leads to misunderstandings. We believe it worth reporting that
there is a perception in the rest of the international community that
the USG seems to keep its distance from ongoing debate and discussion
while policy is being developed -- and this can cause great difficulty
if it then disagrees with decisions taken. One completely independent
source said 'The USG in BiH needs to engage more -- to be a core part of
the initial processes'. However there are many who believe the rows were
blown out of proportion.

OBN is surviving. It has an audience share of 5% overall -- 11% in
Sarajevo and 14% in Mostar. It has gained an additional licence from the
CRA to complete its terrestrial coverage with 35 new transmitters. It
has twelve affiliate stations which fill in the gaps. Affiliates are
both publicly and privately owned. OBN also has a relationship with
Oscar C, Mostar to provide news coverage. OBN has taken out a loan at
very reasonable interest rates, thanks to their ability to borrow
through an Austrian bank. OBN is a registered limited company in London
which holds 48% of the stock -- the rest belongs to people in Bosnia.
One of the owners of the parent company is also an owner of Nova TV,
Croatia and the two stations are therefore is in a position to purchase
the rights for programming for both countries at favourable rates. OBN
has a strategy -- it is to have a system of linked companies -- in
Slovenia, Croatia and BiH imminently -- and in due course in Serbia,
Bulgaria and Albania. The company believe it is impossible to finance a
decent service solely from the BiH market and the only way to survive is
with regional cooperation/networking. They are trying to develop joint
marketing -- and already have 4 clients covering Croatia and BiH -- and
the vision is to have regional 'global marketing' and then just an
office in Sarajevo for local ads. OBN is as conscious as all others of
the need to produce quality domestic programmes but the cost in the
present situation is prohibitive. OBN shares the general view of the
reforms of public broadcasting and their chances of success. OBN also
believes that the market in BiH is too small for two commercial networks
and that either it or Mreza Plus will fail. OBN, of course, think it
will be Mreza which will fail, as it believes Mreza is not yet
functioning as a proper network.

After the collapse of the original, internationally supported OBN, in
the summer of 2000 USAID/IREX made the brave decision to try again to
create a BiH wide network of stations with considerable support from
other donors. Working with stations that had been OBN affiliates Mreza
Plus was created.[^14]*^5^* Support was given both for infrastructure
and to purchase popular programming -- management and marketing training
and support were also invested in all five companies. The latest
audience figures give Mreza 14% audience share and an estimated 25% of
available advertising revenues from agencies.[^15]*^6^* However together
the network signal covers at best 85% of the population. There is no
question that all five stations have gained enormously through their
membership of the network -- 'the USAID/IREX support for Mreza is the
best project in the world.' However there are some difficulties facing
the network. First and foremost, of course, is simply the weakness of
the market in BiH. Secondly the stations' experience with OBN has left
scars -- the demise of the original OBN did great damage. Thirdly the
structure, and thus the decision-making process, are cumbersome. It is
taking time for the five companies to function as a united group -- and
time for the network executive to establish it-self.

Maintaining a strong, competitive regional presence and operating
successfully within a network is a difficult balancing act. This is
particularly the case for TV Hayat in Sarajevo and ATV in Banja Luka.
Both stations have carved out a strong presence in their home markets --
and produce good programming for their regional audiences. Given the
regional preferences of those audiences, and the revenues won through
serving them well, balancing the interests of the network with their own
output is problematic for both stations. Both believe membership of
Mreza Plus brings them great benefit, but both believe too they must
retain their own identity. For the three smaller stations membership of
the network brings even greater benefit -- with less well-established
local programming, and thus smaller impact, the shared entertainment
blocks bring them a much bigger audience reach.

The stations broadcast as a network for several hours each day during
peak time but which hours these are depends on the day. According to
Fabrika Agency this means they lose some advertising because advertisers
running a campaign want the same slots at the same time on successive
days. ATV and Hayat argue having some peak time hours for regional
programmes ensures good audiences for their own public interest
documentaries and other programming. Both have good audiences
individually as well as when they are broadcasting as Mreza. (See
Appendix IV). Advertisers of course are well aware too that Mreza Plus
has, at most, 85% coverage of the country. The public broadcasters reach
the whole territory, and, very soon, so should OBN.

TV Hayat is confident of its future -- full cost recovery is very close
and the newly launched satellite service for the Bosnian diaspora
overseas with Mreza Plus programming will, it is believed, bring in
additional revenue. And there are plans to extend terrestrial coverage
in BiH. The company has a sizeable loan over five years at a reasonable
rate -- and its confidence is palpable.

ATV is also highly regarded. It has carved a strong position for itself
in Republika Srpska and its importance as a news provider was confirmed
to us by three distinguished media figures. They also said that 99% of
the population of RS is not yet ready to turn to national news services
produced outside RS. (The authors can confirm the ATV news is excellent
-- properly national, editorially sound, fast moving, lively and
professional.) The ATV news is also the station's biggest revenue
earner. ATV is not as far down the road to full self-sustainability as
Hayat but since it has a different history, this is not surprising. The
market in RS is even weaker than the market in the Federation -- and
average salaries lower. ATV has been supported from the beginning by
donors to ensure that decent, balanced news and information programming
by, and for, Republika Srpska is available -- it is succeeding in its
mission (which was tested to the full in 1999) and the importance of its
role is undiminished. ATV, whilst it has some concerns about the
network, believes Mreza Plus to be crucial both for its own survival and
for pluralism in BiH.

The three smaller stations, RTV Mostar, Oscar C Mostar and TV Tuzla are
not as strong as Hayat and ATV -- either in the programming they offer
or in their confidence in their potential for individual
self-sustainability. Two of the three still have contracts with the
local authorities to make programmes. All three fully recognise the
benefits membership of Mreza Plus brings them.

Future support from USAID for the Mreza Plus network has been made
conditional on the creation of a network news programme. The stations
are now in the process of developing a plan to achieve one with IREX
support -- and, also with IREX support, will be creating a central
marketing function. The authors welcome both these initiatives which
should strengthen the network. However the authors believe the news
programme can be achieved without much additional expenditure. For
example, uplinks for Mostar and Tuzla are not essential at this stage --
and until the product is proven, telephone reports, with archive footage
or stills, could be used. CNN and BBC World frequently employ this
technique. In other words, investing in an expensive infrastructure may
be inappropriate until the programme is established and of proven value
in the market.

Mreza Plus is a significant project for BiH. It has the potential to
ensure pluralism. Looking ahead five to seven years -- and assuming that
PBS will end up as one channel with one central newsroom and
entity/regional opt-outs -- as far as we know, unless Mreza Plus
survives and produces a national news service, there will be no
alternative voices -- no pluralism in news and public affairs
programming on a national level. (OBN intends to continue with its news
but has no plans to extend this into current affairs or public affairs
programming.) Currently, Mreza Plus as a network is almost
indistinguishable from other BiH services. It has the same mix of films,
purchased programming of soap operas and light entertainment programmes,
some sport and cheaply produced local shows. (Although individual
stations do carry other documentaries and have local/regional public
affairs programmes.) We recommend that USAID provide support to Mreza
Plus stations with independent producers on commission, to make other
excellent domestic programming -- not least because all the research
figures demonstrate that good domestic productions are the most popular.
If the news project, and the development of other domestic programming,
do not materialise perhaps donors need to consider, and ask the network,
why they should continue to support it. Whilst the authors believe the
original Mreza strategy to first establish the network as a commercial
proposition was right, it needs now to establish other criteria for
success. On the basis of the current offer it is difficult to see what
distinguishes it from either FedTV or OBN -- or even HRT which secures
10% of audience share nationwide. The authors believe the network will
need to be more than a potentially lucrative business to continue
warranting donations. This assessment should not be taken to apply to
some of the individual stations -- only to the network as it is
currently structured and supported.

The authors also believe all commercial television companies, sooner
rather than later, must begin to develop regional partners. The market
in BiH is very small and the revenue cake will remain limited even if
economic conditions were to improve rapidly. Regional programme exchange
and programme purchase would be much more cost effective -- and selling
advertising for much bigger markets would bring much greater rewards.
There are 'sympathetic' stations in the region -- relationships already
exist for the exchange of news material -- and we recommend Mreza Plus
urgently pursue possibilities. It was said to the authors more than once
-- 'Mreza just does not recognise the market conditions -- BiH will
never be a big enough market'.

However the network is a new venture and some leeway is still necessary
-- and the experience stations went through with OBN has left scars --
but there are concerns. However if those concerns can be met, then it
will need to be remembered that the network [is]{.underline} still very
new -- 17 months on air as this report is written. With that in mind,
and with the increasing competition the better-funded stations will
offer, we recommend that USAID consider continuing to provide support
for programme purchase to underpin the likelihood of sustainability and
to properly establish the network as a provider of first class
entertainment.

**C**. **Public versus Private TV in the Market**

Whilst there can be no doubt that PBS, FedTV and RT RS have been given
some favourable treatment under the law, and through advantageous
transmitter access, we could find no evidence that this is enough to
kill, or even severely damage, commercial broadcasting. The real factors
are the weak market, the existence of far too many outlets chasing all
too little advertising revenue and overall, the fairly mediocre, all too
similar, nature of what is on offer. Between 19.00 and 20.00 almost
everyone in BiH has the offer of news followed by news unless they turn
to OBN, HRT, Pink etc.. At 21.00 they are offered, in the main, a film,
soap opera or a local entertainment programme. Almost all networks
change shows at the same time -- breaks between programmes are very
bumpy and poor - marketing is badly placed and clumsy. The first network
to really spend time (and money) on skilled scheduling, soundly based on
research, is likely to make a real impact. Of course the lack of good
domestic programming is accounted for by its prohibitive cost in the
current situation, but when it is on offer it is enormously successful.
It may be salutary too for the commercial sector to recognise that
alongside the benefits enjoyed by the public broadcasters, they have
quite heavy commitments placed on them too. 40% of their output has to
be news, information, educational and children's programmes. And
cartoons, for example, are not allowed to be part of their required
offer to children! One other point, it has been asserted the public
broadcasters also have a monopoly over key sporting and other events of
national interest/importance. This is not actually the case -- if a
broadcaster has whole country coverage it can bid in the market for the
rights. OBN will therefore very shortly be able to compete with the
public broadcasters for such programming.

In other words the authors share the conclusions reached in the report
by Tarik Jusic of October 2002.[^16]*^0^* We quote just two of his
conclusions:-

"Although difficult, the current situation will not destroy the
commercial sector, but will rather inhibit the development of both
commercial and public broadcasters."

And

"The key struggle for survival will be enacted in the field of
programming -- the better the programming, the greater the ratings and
the higher the advertising revenues."

To which the authors would add -- research based, knowledge based,
competitive scheduling.

**D. Radio Broadcasting**

The perception that radio is unimportant in BiH is not borne out by the
numbers of people who listen -- some 84% of the population listen at
least three times a week for 3 to 4 hours at a time.

There are, according to the CRA's latest figures, 113 radio stations in
BiH. Only one of them, the public national station BHR1 has an audience
of any appreciable size. The latest figures (December 2002) give the
station a 10% audience share. The most any other station can claim is
something under 4% and almost all those in this category are music
stations. None of the other stations with reasonably substantial speech
programming -- the average ratio is 40% speech to 60% music -- reach
more than 2% of the total population. In other words the market is very
fragmented and consequently revenues are low -- the total pot is
officially 1m KM a year.[^17]*^1^* BORAM Agency gave the example of the
poverty reduction campaign -- out of a total spend of 400m KM just 10k
KM went on radio spots. The situation between local private and public
broadcasters mirrors the situation with television -- except there is no
equivalent to Mreza Plus or OBN. There is only informal networking,
facilitated by the BORAM Agency. 22 stations carry, and contribute to,
news blocks produced by BORAM plus a daily 20 minute news programme.
This project, supported for a year by the European Union with \$300k, is
rated both by the Agency and the EU, a huge success. For the Agency the
proof is that they have just had to ask stations to pay/contribute
because their 20% of the revenue was not enough to cover costs. Almost
all the stations have agreed to pay the requisite 150 KM a month. The
project, 'Infozone' costs 10k KM a month -- ad revenues last year
brought in 35k KM a month -- of which 80% goes to the stations. The
Agency believes the network is a success because it is informal, there
is no conflict of interest for them, and so jealousies/competitiveness
are kept to an absolute minimum. They have resisted attempts to
formalise/register the network for precisely these reasons. They have
another network of 60 stations for a pop music programme, marketed in
the same way. We recommend that if BORAM develop their offer with other
good information products, USAID consider supporting start-up costs.

Some individual stations are doing well in their home markets --
Kameleon in Tuzla is one. Run by an entrepreneur, it looks and feels
professional, modern and smart. The station is very grateful for the
help and support they have had from USAID/IREX. Last year they just
covered costs. And the station has ambitions. They have gained a licence
from the CRA to broadcast across national borders; has ambitions to
build satellite studios in 3 other towns and have them broadcast their
own local programming for 4-5 hours in the morning and, the station
says, it does not need donors anymore other than as providers (IREX) of
research. Kameleon share BORAM's view of the impossibility of building
multi-station networks. We were told -- as we were in Mostar and
Sarajevo of a Radio Free Europe inspired attempt -- which failed.
Kameleon believe that sufficient agreement/cooperation between owners is
just not possible.

Radio Stari Grad, Sarajevo, is also flourishing -- although it believes
that IREX/USAID have failed the radio sector in BiH. The station's view
is that there was a failure to identify a critical mass of stations to
work with and that its judgements on many were poor. The owner of Stari
Grad is patently bitter but we think it necessary to reflect his view
that weaker stations were chosen for support because they could be
'managed' rather than serious, and potentially viable, ones. He firmly
believes one criterion for selection for support was the ability to
operate in English. Stari Grad shares the Kameleon view that there are
less than a dozen serious radios in BiH. Stari Grad like Kameleon is
working hard to increase coverage. So far it has achieved FM coverage of
middle Bosnia, Mostar and Tuzla -- the intention is to have full
national coverage which Stari Grad believes to be a fully sustainable
concept because the competition is so poor. The station's current
audience is 1.3% and last year it secured enough revenue to cover costs.
Stari Grad, like Kameleon, is driven by one person. There is some
cooperation between them -- and professional respect. Their views on
other players were close to identical -- and neither believe there are
more than a dozen serious/decent stations.

Studio 88 in Mostar is a different animal -- who and what it is, and
what it broadcasts, are what the team talk about. This is not to imply
they are not serious about reaching sustainability -- they are. They
have had support from a number of donors. and are very happy with the
current Bosnian consultant provided by IREX. Since USAID's consultant
started working with them their revenues have shot up and they are now
covering 50% -- 60% of their costs. There is little cash flow and much
bartering. Listenership has reportedly gone up 280% but from what to
what is unclear. They report that they have 15% of the market share in
Mostar region. They are particularly proud that during the election they
won 41% of Croat speaking listeners. Although Studio 88 is not in the
same league commercially as the Sarajevo and Tuzla stations we visited,
both respect it and see its existence is important. Perhaps some
flexibility in continuing to offer support such stations is needed. The
OHR representative in Mostar told us it is the only radio local/regional
station which is providing a good amount of decent journalism. We
recommend a sympathetic hearing be given to radio stations like Studio
88 who have a unique role in their communities if they need further
support to ensure survival. The station last year, through a freak
electrical surge, lost their transmitter. Happily the Swiss government
were able to replace it fast. We recommend that USAID consider ensuring
enough flexibility in their funding mechanisms to provide emergency
assistance to deserving outlets faced by crisis.

There was not enough time to visit Radio EFM in Sarajevo but we think we
should record the universal respect in which it is held by the radio
people we met -- and many of the experts we spoke to as well. However
there is concern expressed too that as, essentially, a student station,
it may not have a strategic plan for survival. Given the paucity of good
stations we recommend a local expert be commissioned to see if Radio EFM
has the desire and/or the need for support.

Radio has been relatively underserved by the international community.
Whether this was through a lack of knowledge, lack of a coherent
strategy or the sheer impossibility of assessing which outlets among so
many were worth supporting we cannot judge. The authors have
unfortunately failed to come up with any brilliant concepts to better
serve and support the radio sector. The moment has patently passed for
new initiatives on a grand scale, however many local communities are
without local radio. (According to one estimate this is as much as 40%
of the population.) The suggestions we have are therefore small scale.
Radio is very under regarded generally -- its profile needs raising, as
does its importance, in the community. With this in mind we recommend
USAID support the institution of some radio awards in news, public
affairs, social affairs, education and entertainment categories. We
believe some sponsorship may well be secured for such an initiative too.
Secondly, we recommend a local, independent expert be commissioned to do
a study of what local stations in the underserved regions are present,
to assess them, and to then offer support to those who either provide,
or have the potential to provide, decent services.

The role of the various international broadcasters in the radio sector
came in for universal criticism. They have pinched the best people
because they 'pay too much' and because they are believed to pay
stations to broadcast their programmes thereby making it much more
difficult to sell programmes. Deutsche Welle do pay; the BBC does not
and Radio Free Europe (the most successful international station in
Bosnia) pays just 3 of it 41 affiliates.

E.  **Print**

In many ways print is the hardest sector to assess. Readership is low in
BiH -- partly because newspapers and magazines are expensive at 1km for
the former and 2km for the latter. But, too, time and again we were told
there was no tradition of readership of print media before the war
either -- no paper in the BiH territory has ever sold more that 50k. And
the print run for books is about 300 copies. Although on the surface the
market is not as crowded as it is for the electronic media, competition
from outside the country is very strong. There are:-

7 Daily newspapers produced in BiH and 13 available from Croatia and
Serbia

46 Weekly and monthly publications produced in BiH and 61 available from
Croatia and Serbia

And of the 46 weekly and monthly publications just 7 are news based. And
of the 7 two are essentially local -- Prezent in Bihac region, and Front
Slobode in Tuzla region.

Recent figures from Prism Research for IREX on daily newspaper
readership are:-

Federation -- 40.2% at least 3 times a week

Republika Srpska -- 22.1% at least 3 times a week

And

News magazines are read regularly, 1 or 2 a month, by 29% of the adult
population.

Total revenue from advertisements is said to be 2m KM.

Overall readership of all publications has fallen over the last two
years -- a notable exception is Nezavisne Novine which has secured a
sizeable increase in sales throughout the country, despite being based
in Banja Luka. IREX/USAID are given total credit by the owner for this
success. Nezavisne Novine also owns a radio station, Radio Nes, which is
well-regarded by other serious stations. The owner of the company is
confident he will survive and reach full sustainability. This in spite
of the subsidised government paper's ability to charge half his cover
price; despite constant pressure from the government via the financial
'police'; despite not securing the lucrative obituary notices from the
Serbian community because the paper is not perceived to be a Serb
outlet; and despite pressure exerted on some institutions not to
advertise with them. It is obvious that all the management, journalism
and business support Nezavisne has had from USAID has really borne fruit
-- and the owner wants more -- and to keep getting support from Western
consultants. His one regret is that his relationship with IREX did not
begin in 1996! Unquestionably Nezavisine Novine's business sense -- the
acquisition of its own printing press -- as well as its improvements in
layout, and not least its journalism, are very impressive. The company
is now printing seven other companies\` publications, including one
Croatian paper and an auto magazine. The printing press is making enough
to repay the loan they took and provide some money to support the
newspaper -- with a five year loan, and therefore heavy monthly
repayments, we were told even the family dog is in collateral for it! On
the principle of investing in small numbers of potentially viable
outlets with sound editorial standards the Nezavisne Novine story is, to
date, an outstanding success story. There is no question that it is seen
as an opposition paper but since it now separates most comment from the
news stories, it simply joins the ranks of most Western papers. For the
future the company would appreciate further support to enable it to
produce an edition for Western Herzegovina. Currently 30% of their sales
are in the Federation and Nezavisne believe with a further zoned edition
this figure would rise dramatically.[^18]*^2^* We recommend some
research be carried out to test the validity of the idea, and if the
results support it, that ways in which support could be provided, be
explored. It is unlikely, with the size of their current five-year loan,
it will be possible for them to raise more capital.

For Nezavisne Novine's radio station, Radio Nes (which we were told also
brings in a useful additional profit a month for the paper) listening
figures are respectable at 3.7%. It has news but is largely dependent on
the news gathered by the newspaper's staff. So, for example, when the
paper was breaking a big story about a bank scandal, radio simply
trailed the newspapers coverage but did no independent stories with the
voices of the players. We recommend that USAID suggest to Nezavisne
Novine they consider developing their journalists into bi-media workers.
Some of the skills are different but can be taught -- and it could be
productive both for the quality of the radio output as well as
delivering some economies.

The story for most of the other print outlets we visited is not so
positive. In Banja Luka we also visited Reporter -- a good-looking,
well-produced glossy magazine. It is jointly published in Serbia with 35
pages of content shared, mostly on foreign affairs, music and film. The
issues we looked at carried a lot of advertising -- a key benefit of a
dual market. But they are having financial problems and are in the
middle of negotiations to transfer ownership and debts. They have had
help from USAID-- after a bad experience the current team has provided
valuable support on business planning. The help Reporter seeks now is to
finance a sort of apprentice system to enable them to train new/young
journalists.

Dani, which remains an influential force in spite of a decrease in
sales, is not yet sustainable.[^19]*^3^* And it really has no faith it
can be in the current economic situation -- "It costs 8 KM to buy Dani
for a month -- for that you can buy 60 eggs". However they continue to
make strenuous efforts to reach sustainability -- they are now charging
for their web edition and currently have secured 250 subscriptions at
\$40 a year. The magazine claims to sell between 14k and 15k copies a
week of which 80% are bought in the Federation and the remaining 20% in
RS. Dani has mixed views on the contributions and support offered by the
international community. Whilst it highly appreciates the training for
business planning and management, the magazine believes huge sums have
been wasted on journalism and editorial seminars and round tables -- and
that frequently journalism training by expatriates is/was inappropriate
because they had no understanding of the realities of BiH. On the other
hand it believes that sending young journalists abroad to gain skills,
new perspectives and experience has been fruitful. Dani is very
conscious that there is little or no investigative journalism in BiH --
because outlets simply cannot afford it. The magazine would like support
to develop their capacity in this -- and to develop their capacity for
economic and educational writing. The lack of real investigative
reporting anywhere in BiH is demonstrable -- we recommend the setting up
of a fund to support properly developed proposals for investigative and
specialist reporting to which respected outlets can apply. And Dani is
important beyond its current readership figures -- as are some other
financially unstable print outlets. It is they who most often raise
issues of substance and frequently set the agenda for the electronic
media. Their influence is disproportionate to their readership as some
of the print media is in every society - the Wall Street Journal, the
second biggest selling paper in the US, has a circulation of just 1.8m,
and the Washington Post about 650k, in a population of something like
280m. We recommend that special consideration be given to the continued
support of decent and influential print outlets, and that mechanisms for
doing so, for example in supporting important investigative projects, be
developed. However, once a project had been agreed it would be essential
that no interference of any sort be allowed.

START magazine is the youngest of the papers/magazines we visited. It is
proud of its editorial vision which seeks to ensure positive stories are
covered as well as the negative. It covers environmental issues -- food,
drink and some personal success stories too. It does cover the bad news
-- but it works hard to have a balance. The magazine has had a lot of
donor support, is duly grateful and, from a position of just covering
costs as it is now, believes, soon, it will be in a position to develop.
At present they print 5k copies and sell 3k at a 2km cover price. Two
years ago the OSI donated a printing press (which brings some income
too), and Press Now a car for distribution -- these two contributions --
plus the business management advice from IREX and some digital equipment
for new photographic studio (which should in due course also bring some
income) have put the magazine on its feet. START has taken a loan from
the Municipal Centre to buy the studio space -- repayment at 5.5% over 5
years. The energy is palpable -- as the list of things they will do
next, demonstrate -- they are first to improve the quality of the
newsroom writing; second to be able to afford better paper for the
magazine and third to have money to invest in promotion to increase
sales. START also has its competitors in proportion -- they have found
their own niche, are confident in their product and able to say the
economy is not (at least not yet) the problem for print media. This
highly unusual view they explained by the number of cars in Sarajevo --
110k -- a large percentage of whose owners, and their families, simply
do not choose to buy newspapers and magazines.

Slobodna Bosna says it has had three stable years -- editorially and
financially. It covers 20% of its costs through ad revenue and the
remaining 80% through the 2 KM cover price. Sales they say are around
25k -- however IREX figures reflect a 2.4% drop -- 3.9% 2000 to 1.5%
2002. One independent source allows the circulation to be around 15k --
18k, a second estimates 10k. These discrepancies in estimating
circulation figures for all print media are normal. Slobodna Bosna's
main problem is printing -- they believe that a first class press,
available to many outlets, is needed badly in the Sarajevo region. Such
a printing press would cost \$10m. They believe with a better-looking
product they could also bring in a great deal more advertising. On the
question of pressure, local or international, the paper confirmed that
over the last two years there has been little or none. However they
believe the situation will deteriorate again with the change in
governments and fear revenge may be wreaked for some of what they have
published in the past. This is, it says, compounded by the mafia style
criminal interests which have their tentacles in so much -- including
some very successful newspapers. The paper believes too that their
critical coverage of what the current High Representative has been
saying and doing has led to the loss of SFOR advertising on the OHR's
instructions.

We heard a number of assertions of this kind during our visits --
another paper made a similar charge about United States and the
withdrawal of financial support after coverage of which they
disapproved. Whether the facts as asserted are true or not, they are
believed, and the stories are repeated and gain in the telling.
Inevitably then the international community is believed, in some
quarters, to be deeply hypocritical when it comes to their support for a
free and independent press.

The situation for the regional press is worse. In Tuzla we visited Front
Slobode and although the magazine has had substantial, and much
appreciated, help from IREX it is not yet flourishing. The paper says it
is just about covering its costs with advertising revenue and a
circulation of 3k at 1KM per copy -- plus 60k KM a month from the
municipality to carry their news. Without donor support the paper does
not know what will happen in the next period. It recognises it is
overstaffed and believes this can be sorted out within the year. The
paper is not prepared to consider seeking a loan at commercial rates to
purchase a printing press -- with one loan outstanding on a car for
distribution, the reluctance is understandable.

Whilst the situation in Bihac cannot be compared with that in Tuzla,
Prezent is in a similar position locally in terms of circulation. The
story of Prezent, and its owner/editor is well-known so we will not
rehearse it here. We simply record that the timely help and support from
IREX and the Swedish Helsinki Committee are deeply appreciated. The
paper made a lot of mistakes last year we were told -- although warned
strongly by IREX in advance about them, the advice was not taken. Now,
however, Prezent is optimistic about the future -- not because the paper
expects a big surge in circulation and thus advertising revenues in
Bihac, but because it is starting to sell well by subscription in the
diaspora in Europe and the States.

The authors, in principle, would like to support local/regional print
media but it may be that the market is simply not there at present for
local newspapers.

The question of the Press Council was ever present. Opinion is divided
as to whether it should have CRA type powers or not. Fortunately in the
author's view, a system of self-regulation will continue to be
attempted. Dieter Loraine, who is managing the process as Director of
Communication at the CRA, believes that it can now function
successfully. It is his view that above all time is needed for the
Council to establish itself. It will now meet six times a year rather
than four which will also greatly speed up adjudications. Of the 32
adjudications it has made to date just over 50% were published by the
outlet concerned -- this figure obviously needs to rise substantially.
The hope is that an erring paper will soon recognise that the bad
publicity it receives in the rest of the media if it does not publish an
adjudication against itself, does far more damage to it. British funds
will be used to pay for an awareness campaign in the electronic media
about the Council's role and work, and how to use it. Of course the
ability of the Council to raise complaints -- plus its new monitoring
function -- will also ensure many more offending pieces can be held to
account. And the intention is that by March 2004 the Council will be an
entirely Bosnian institution paid for by the press. Therefore the other
key objective for the new Chief Executive will be to persuade the print
media to participate fully.

F.  **News Agencies**

There is only one independent news agency operating in BiH -- ONASA. It
currently has 250 clients; 100 full and part time staff; is the only
agency to offer an English service; a separate business service and one
for NGO's. Its competitors are owned and paid by the two entity
governments, SRNA in RS has 1.4m KM budget and FENA in the Federation
1.2m KM. In the authors' view both do a reasonable job in spite of their
funding, but neither offer an English language service. ONASA has to
survive entirely on income and, with the cutting of IREX grants to small
outlets to subscribe, stations can no longer afford to take the service.
They lost 25 subscriptions of 400 KM a month. Also many international
companies are leaving BiH and so that is more lost subscriptions. ONASA
also has problems with its software, and the company from which IREX
originally purchased it. So, there are two things ONASA badly wants --
one is to resolve the software problem -- the other to recognise how
important their service is to small, poor stations and to enable them
again to subscribe. It is a conundrum -- but ONASA is important for BiH
as the only independent agency, so we recommend that if the
reinstatement of the small grants to stations to pay for subscriptions
is impossible, and if IREX has someone with the appropriate skills,
ONASA be offered an urgent full cost analysis to identify any potential
savings and see if the books can be balanced

G.  **Independent Production**

There is very little independent production for television in BiH --
no-one has the money to pay for it. Under the Public Broadcasting Law
the national and entity channels must purchase 10% of their programming
from independent producers, currently we were told it is more like 20%.
However, the independent production company we visited, REFRESH, are
finding it impossible to find a market in television. They also make
very highly regarded feature films and thus have high production values
-- no-one is prepared to afford them. The independent productions we are
aware of do not have such high values -- for example the extremely
popular soap commissioned by FedTV -- but the fact is that it is a
domestic production. REFRESH believe it is time the commercial sector
woke up to this fact, and currently say they only see FedTV as a worthy
partner.

There are altogether about ten independent production companies located
in Sarajevo, Banja Luka, Tuzla and Siroki Brijeg.

Although we were unable to visit any other independent companies, given
the importance of developing domestic programming which has been
stressed earlier in this report, we recommend an assessment be made of
the various companies, and support considered for any which are capable
of producing good productions in partnership with private, commercial
television.

**5**. **Journalist** **Associations**

Over the years, apart from USAID, many sympathetic organisations have
tried to help in this field. There are six associations altogether,
efforts have been made for years to amalgamate, or at least form an
association of the six. Although some progress has been made with four
of the organisations they are still a long way from success. Even the
International Federation of Journalists has given up on them until some
rationalisation happens. No association individually has more than 350
or so members and it seems journalists and media workers are simply not
yet persuaded of their value. Therefore we recommend the situation be
monitored, and as and when the groups do manage to form one national
body, sympathetic consideration be given to supporting it.

**6. Financing, Loans and Management**

We said earlier in this report that much of the financing of the media
in BiH seems rather murky. It is impossible to assess who, with special
interests to pursue, may be funding what. Accusations of one outlet
against another fly frequently -- and, simply on the balance of
probability, a percentage of them are probably well-founded. The less
than transparent funding of canton and municipal stations is another
area of difficulty. However, it was encouraging to hear how many
organisations have been able to secure loans on reasonable terms for
sound business reasons. Noone we spoke to is paying more than 10.5%, and
the variety of lenders with whom arrangements have been made, is wide.
There must too now be a wealth of experience in this area amongst IREX
clients -- perhaps it may be worth pulling some of it together to be
shared more widely.

We had heard much from donors about 'donor dependency' and how media
organisations developed great skill in accessing grants and donations,
but almost none in making money and operating as a business. The authors
believe that this picture is no longer as accurate as it was. IREX, the
MDLF (Media Development Loan Fund) and others have patently had an
impact -- with one or two exceptions, we did not find an expectation
that donors will continue to keep outlets afloat, and a number of people
spoke enthusiastically about their business plans.

However we still repeatedly heard that if you raise revenue, by whatever
means, that is all you need to do to survive. There seemed, again with
exceptions, little appreciation of other aspects of financial management
-- or the broader aspects of management like human resources, analysing
required staffing levels and developing organisational structures,
understanding the total cost base and so-on. We recommend that a package
of management skills training be developed in conjunction with an
excellent management training centre. We further recommend that this be
done in partnership with a local institution to ensure the content and
skills have the widest possible use. This may be even more important
given that the public broadcasters both at state and entity level, will
be able to access as much management training as they want -- and at
every level. We understand that FedTV and PBS are open to this sort of
help and support (rather than journalism and production) and it is
therefore possible that, in this area, they may gain an advantage.

**6. Conclusions**

It probably does not need saying again, but the media market in BiH is a
mass. Not just because there are too many outlets fighting for an
audience and seeking all too little available money, but because noone
knows much with any accuracy. So claim and counter claim for audience
share, coverage, circulation and advertising revenues contribute to the
general prevailing atmosphere of suspicion and distrust. Undoubtedly
many outlets will fail in the next few years, and it will be a challenge
for all those who care about Bosnia to ensure those that do fail are not
those who are making a genuine contribution to society.

Ten years ago there was chaos in the media, and a great many of the
outlets were pernicious; this was followed by a period of anarchy in
which anyone could do what they liked -- some of what blossomed then was
reasonable, much was not. Now, there is some sort of stability. The
electronic media is highly decentralised but print remains, in the main,
centralised in the two entity capitals. There are a number of decent
organisations close to sustainability. We believe support should
continue to be focused on those who are, and who are also demonstrating,
and continue to demonstrate, a genuine contribution to building
democracy, to promoting open debate, and to helping to hold government,
institutions and all centres of power, to account.

A major area of concern must be that, with the very occasional
exception, most media outlets are not really taking market conditions
into account -- or being realistic about the mid-term future. BiH is a
very small market -- and even supposing the economy were to suddenly
improve dramatically, it will still be too small a market for the amount
of media there is. For radio this is not such a problem -- but for
print, and above all for television, it will continue to be a huge
problem without regional cooperation. (There is some cooperation on the
level of news exchanges with B92/ANEM in Belgrade and CCN in Croatia.)
One station has realised the need for regional purchasing and
advertising and others need to do so urgently. And an exchange of
domestic programming would, of course, have real added value.

It is a matter of great concern that many serious professionals see huge
dangers ahead for the independent media -- private and/or public. The
outlets close to, and supported by political and criminal groupings,
have enormous influence -- and all too strong links to governments. Many
people we spoke to expect an increase of pressure on all fronts and even
direct action. The journalist Helpline (now under the Communications
Department of the OHR) may be able to help individual journalists but it
cannot provide support at the level pressure is likely to come. What can
be done about this is unclear, but we believe that policy makers in the
international community need to recognise the dangers and keep in close
touch with editors, including those whose journalism sometimes offends,
and who may lack social and diplomatic skills as well.

Another area of concern is the privatisation of canton and municipal
stations. A few managed to get ahead of the moratorium put in place
until the CRA licensing round was completed. The moratorium is therefore
due to be lifted imminently. What will happen is very unclear -- not
least because every canton has different rules for ownership -- some,
under their present rules, only allow 10% foreign ownership -- others
48% and some 100%. There is great concern too about how transparent the
process will be.

Overall, we are troubled by the lack of cooperation, the distrust and
the endless denigration by the media of the media, competitor or not, we
found. There were exceptions -- and those exceptions have something in
common -- they are the outlets which have developed, on their own
initiative, their own vision, and their own niche and thus a sense of
proper self-confidence. We believe that donor focus should be on those
who either have, or are able to initiate, a genuine vision and mission
for their organisation. It was very noticeable that those which have
already done so did not feel the need to denigrate or libel or attack or
be otherwise extremely rude, about others.

This dislocation, lack of cooperation, within the media, is reflected
within the international donor community. Many donors are perceived to
want to dictate to, and manage, their clients. The lack of observable
partnerships has led to a diminution of positive achievement -- not
least because outlets feel they must identify with one or other donor.
We believe all sides are equally responsible -- equally capable of
trying to impose their own agenda. The recent EU/US battle does
reverberate. There is a perception amongst other donors to the private,
independent media that USAID sometimes seems not to recognise the value
of partnerships. Also people sometimes believe that whichever donor is
the biggest contributor expects to be able to dictate terms -- both to
the client and to donor partners. Of course, in highly charged
situations perception is all, and we recognise the validity of such
views is open to question but believe they are worth considering.

Media outlets are, in the main, very appreciative of all the donor
support there has been. And sometimes the sums were very small -- we
offer the thought that sometimes a timely \$5k or less can have more
impact and long term value than \$250k.

Many of the organisations we visited just about cover their costs or are
very close to doing so and therefore have a real possibility to be
self-sustainable. But sometimes for donors 'self-sustainability' seems
to be almost an end in itself. We are concerned that the quality of
output be understood, and stated, to be equally important. We were
concerned that some donors spoke to us only about media as sustainable
businesses. And this emphasis was reflected in our meetings with media
organisations -- almost all wanted to tell us about themselves as a
business -- all too few wanted to tell us, enthuse us, with their
output, the quality of their journalism and its importance for the
community. Where that distinctive quality of output exists, and an
outlet's contribution is proven, it is to be hoped that support for the
organisation be considered for a little longer, perhaps in partnership
with another donor, if USAID's funding restrictions make direct support
impossible.

A key objective for programmes which invest in any area of activity must
be to work with local organisations, and so contribute to institution
building within a country. We are disappointed that so little of the
extensive training and development work that has been carried out has
been in partnership with Bosnian institutions -- be they universities or
training centres. (The imminent transfer of the 'internet for
journalists' training capacity is a welcome initiative towards this
goal.) We believe this is an area which needs to be urgently addressed
if much of what the United States has brought to Bosnia is not to be
lost. We also hope that now, seven years after the beginning of US
assistance to the media in BiH, that it will be possible to largely
Bosnianise future programmes.

7.  **Recommendations**

Our recommendations to USAID/Bosnia for future investment and support to
media take into account reduced budgets. Some recommendations suggest
immediate or short-term possibilities which might be funded through
existing programs.

**A) Sustainability, Business and Management**

The media market in BiH remains small and weak -- and there are far too
many outlets chasing what little advertising revenue there is. USAID's
strategy over the last couple of years or so has been to concentrate
investment and energies in a small number of decent and potentially
viable organisations. While this strategy has been appropriate and
mostly successful, sustainability should not be the sole criterion used
in the selection of media partners for USAID. A continued emphasis on
the quality of an outlet's content should be maintained. Outlets seeking
funds, or other material help, should be closely monitored for content
as well as financial stability, and any further support granted should
be equally dependent on the contribution made by the outlet to the
community. Given this, specific recommendations include:

**Print**

1.  Newspaper and magazine readership is low in BiH but, as everywhere,
    its influence and value is disproportionate. It is vital to the
    development of democracy that a healthy and genuinely independent
    print sector survive, especially in BiH, where some of the
    best-selling papers and magazines are tied to political or other
    centres of power. Whilst it is well understood that USAID cannot
    provide support for operating costs, we recommend that funds be made
    available to support worthwhile investigative and specialist
    journalism. In this way journals like Dani, which have an important
    contribution to make to open discussion and debate, could both
    extend their coverage in important areas and, most likely, increase
    circulation. Real investigative journalism is expensive, as is the
    acquisition of specialist skills. (See under Journalism below.)

2.  Building on its success, we recommend that research be carried out
    soon for the Nezavisne Novine newspaper to determine the viability
    of a zoned edition for Herzegovina, and if the results are positive,
    that ways to support such an expansion be explored to extend
    circulation and underpin the probability of long term
    sustainability. Nezavisne Novine should also continue to be
    supported with on going business, financial and journalism training
    where appropriate and requested.

3.  We recommend that any company producing services in more than one
    medium be strongly encouraged to develop multi-media workers. It
    strengthens output and can produce real economies.

**Radio**

1)  The radio sector has been underserved in BiH -- and it is under
    regarded in the market. To raise its profile and to help persuade
    advertisers of its value, we recommend USAID support the institution
    of some professional awards for news, information, educational,
    public affairs etc. programming on an annual basis. We believe it
    will be possible to secure sponsorship once such awards are
    established.

2)  In some geographical areas, decent speech radio has made good
    progress as a business -- in some, like Mostar, it is not yet so
    well rooted. We recommend that stations like Studio 88 continue to
    be supported with business advice and training. We also recommend
    that, perhaps in partnership with other donors with less restrictive
    funding rules, USAID provide support to worthwhile stations that may
    require a longer period of time to reach viability.

3)  Viable, formal radio networks do not seem to be possible in the
    foreseeable future. However the success of the informal network
    created by BORAM with the news and 'Infozone' programme is both
    financially viable and valuable. We recommend that USAID support
    proposals for similar ideas related to information and/or public
    interest programming for informal networking.

4)  Stations that have good reputations and good programming but have
    not yet had the benefit of business and financial training and
    support should receive such assistance. We recommend that research
    be carried out as soon as possible to determine which stations may
    both warrant and want/need help. Radio is the cheapest medium and
    has the potential to be of the most value to communities within the
    wider society.

5)  Some radio stations with useful speech programming are just about
    covering their costs and therefore in the last stages towards full
    sustainability. Some also have ambitious plans to extend their
    reach. We recommend that where support is needed to support
    expansion, either with research or additional business advice, this
    be proactively offered.

**Television**

1)  Television in BiH is not properly competitive -- no network is
    either distinctive or strategic with its scheduling. Foremost, this
    is a business issue. We recommend that, as soon as adequate media
    consumption patterns and market information are available, Mreza
    Plus be urgently offered highly skilled support in this area from
    the commercial sector.

2)  Much support in business planning and financial management has been
    invested in the Mreza Plus partners. We recommend that this
    continue, and further consideration be given to strengthening the
    management skills in the executive hub team to enable it to more
    proactively manage the network.

3)  Mreza Plus is still a new network, and is still establishing itself
    on the market. We recommend that when some concerns have been met,
    USAID consider continued support for programme purchasing to
    underpin the potential for sustainability and properly establish the
    network as a consistent provider of popular entertainment. We also
    recommend USAID consider supporting Mreza Plus to commission
    independent production companies to produce local programming. (See
    Programme Production below)

**Cross Media**

1)  We could find no reason for USAID to consider support for public
    broadcasting at the present time but we recommend that as and when
    the process of privatisation takes off, the situation be monitored
    and support considered for those who have the potential to provide
    good services in underserved cantons and municipalities.

2)  There was much criticism from the advertising agencies that media
    companies do not use them and see them as 'the enemy'. Since at
    least one only passes on 35% of the cost to the advertiser to the
    station, it is not surprising that most stations prefer to sell
    their own slots. And the norm seems to be 20% through agencies --
    80% sold direct.

3)  When every month it is a struggle to cover costs and every KM
    counts, we cannot see there is anything useful to recommend other
    than that the agencies cut their charges.

4)  A great deal of money and energy has gone into strengthening the
    business and financial skills of media organisations in BiH. Much of
    it has borne fruit and the 'donor dependency' syndrome so much
    discussed, we found to have largely disappeared. However we also
    found that management skills beyond the financial/business/revenue
    raising areas have not yet really arrived in the media in BiH. It
    was troubling that for many organisations there still exists the
    idea that if you raise enough revenue to cover your costs, that is
    all you need to worry about. We recommend that USAID identify an
    excellent management training centre to work with a Bosnian
    institution to develop the full range of management training modules
    needed to successfully manage any organisation. We recommend this to
    be a two or even three year project. This sort of skills training is
    not available at present in Bosnia.

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A.  **Journalism**

    1.  There has been a great deal of journalism training in BiH from a
        wide range of donors. Some has been valuable, quite a lot not.
        Good effects can be seen in many outlets, but there is still a
        lot of bad journalism, a lot of very cautious journalism, and a
        lot of very dull journalism. Over the last years a great deal of
        money has been spent on one-off workshops, courses, round tables
        and seminars run by expatriates rather than rooting the skills,
        experience and knowledge in a Bosnian institution. Journalism
        training needs to continue both for new entrants and mid-career
        workers. It is impossible now to determine precise needs - these
        will be identified over time -- but we recommend that any
        further support USAID provides for the training of journalists
        be done with, and through, a Bosnian institution. An important
        component of all development programmes is institution building,
        and we recommend USAID make it a key objective for all future
        media training.

    2.  We have said that we cannot see any reason why USAID should
        offer targeted support to the public sector currently. However
        we recommend that any and all training courses for journalists
        be open to those who work in public broadcasting. It remains
        important to spread strong ethics and high editorial standards
        as far and wide and deep as possible.

    3.  The electronic media behave reasonably -- CRA regulations have
        ensured the excesses of the past have been eradicated. However
        there is little or no investigative reporting -- most news
        coverage is official news -- political/economic news which does
        not connect to people's live -- or often their understanding,
        and it is very dull. Similarly there is little or no reporting
        of issues (environment, the economy, health, education etc.)
        which relate to peoples' lives. And there are very few reporters
        with the specialist knowledge, or the skills, to illuminate and
        explain complex issues. Investigative and specialist reporting
        are also expensive -- always in time and sometimes in resources
        too. The media in BiH do not have money to spend on these two
        key areas. We recommend two ideas to USAID. The first is to have
        a fund to which decent outlets, with a strong/important story to
        investigate, can apply for cash to enable them to pursue it.
        (The recent Freedom of Information legislation should facilitate
        investigative journalism, and such a fund would also enable
        journalists to make use of its provisions -- something that has
        not yet happened, again because of cost restraints.) However,
        once an idea was accepted, it would be of paramount importance
        that [no]{.underline} interference or contact be allowed either
        during the investigation, or after publication/broadcast. The
        individual sums would be small but the impact could be big --
        both in broadening debate and in increasing the ability of the
        media to develop its role as watch dog. We appreciate this may
        be difficult for USAID to manage directly but believe a
        mechanism could be found to properly, fairly and honourably
        disperse funds.

    4.  The second idea is to set up a scholarship scheme for those with
        the potential to be good specialist journalists. Six to ten
        people would be selected each year to travel for four months --
        to receive training in, for example, economic reporting, and
        then to have a period of work experience with a suitable outlet.
        Although such schemes can be quite difficult to manage
        successfully, we believe the benefits can be great. Genuine
        expertise is developed, and a number of people learn from the
        inside about western journalism rather than being \`told\` what
        it is -- and gain experience and new perspectives. If the right
        people are selected the influence on the parent organisation
        can, too, be profound.

    5.  There is no single source of information and advice on laws
        which apply to journalism and its practice. We recommend that a
        suitably qualified person be commissioned to produce such a
        booklet as soon as possible, and that once published, it be
        distributed to all media organisations, universities and
        training centres.

    6.  The print media are not regulated and there is universal despair
        at the irresponsibility of many papers and magazines. Gossip and
        rumour presented as fact; vicious personal attacks; unattributed
        slander and gross invasions of privacy are common. Regulation is
        widely discussed, but happily, another attempt at
        self-regulation is being made. We recommend the US Mission
        continue to give it overt and strong support.

    7.  It is a matter of great concern that many serious professionals
        see great dangers ahead for the independent media -- private
        and/or public. The outlets close to, and supported by political
        and criminal groupings, have enormous influence -- and all too
        strong links to governments. Many people we spoke to expect an
        increase of pressure on all fronts and even direct action. What
        can be done about this is unclear, but we believe that policy
        makers in the international community need to recognise the
        dangers and keep in close touch with editors, including those
        whose journalism sometimes offends, and who may lack social and
        diplomatic skills as well.

    8.  Where it has been possible for USAID programmes to work within
        an organisation on many of the different skills needed, the
        results in the improved quality of the journalism have been
        marked. We recommend that, wherever possible, journalism
        training be carried out on site over a period of time.

B.  **Programme Production**

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1)  Making television programmes is expensive and television companies
    in BiH cannot afford domestic programmes beyond cheap studio based
    chat or music shows. Drama and documentaries are just not affordable
    -- importing foreign films, soaps and sit-coms is much cheaper. Yet
    the one locally produced drama in BiH -- a soap opera with rather
    low production values -- wins an audience of 58% for FedTV. All
    television companies are well aware that they would gain an
    advantage if they could afford to screen local programmes of
    quality. It is also the case that all societies need a reflection of
    themselves and their culture -- this is particularly the case in
    post conflict societies. It would of course be prohibitively
    expensive for any one TV company to try and produce drama and
    documentaries themselves at this stage -- but there are several
    independent production companies in BiH, at least one of which
    produces internationally acclaimed feature films. We recommend that
    USAID consider support to Mreza Plus to commission some quality
    Bosnian programming from independent production companies.

2)  No television network is really distinctive in BiH. And, in
    particular, channel/network scheduling and \`programme beak\`
    production values are very low. (This is mentioned under Business
    above as well.) We recommend urgent support to Mreza Plus to improve
    their scheduling and programme breaks -- and to develop good
    promotion material for their programming.

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C.  **Regulation**

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1)  Although the CRA is an independent body, many people accuse it of
    unfair decisions and, therefore, of not being properly independent.
    However, noone produced any evidence to support such allegations,
    and in the prevailing atmosphere suspicions are inevitable. But
    there is concern expressed in some quarters about its ability to
    remain properly independent, given it is funded by government. One
    solution being discussed is for the broadcasters and
    telecommunications companies to pay for the CRA -- the broadcasters
    by a percentage of their licence fee and the telecommunications
    companied by a percentage of their revenue. The only role then for
    government would be, once the original sums had been made, to set a
    sort of cost of living increase. Of course an annual independent
    audit would be essential. We recommend the idea for consideration
    and support.

2)  The CRA is very important for the future of independent, public or
    private, in BiH. We recommend that anything and everything which can
    be done by donors to support its independence be done. In particular
    it has now a small research unit but with no funds to do anything
    original. The serious lack of current demographic information is a
    serious handicap but if the Authority is to be able to make informed
    decisions in the future, and be in a position to make wise
    judgements, it needs to be able to do some extensive research. We
    recommend USAID to consider, with the CRA, priorities which would be
    of value to media outlets. Extensive research is, of course,
    expensive, but other donors have expressed interest in it, so a
    partnership may be possible.

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D.  **Research and the Market**

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1)  It was a matter of surprise to the authors to discover how little is
    known about almost anything media companies need to know to make
    sensible marketing, scheduling and programming decisions. One
    fundamental problem is the lack of demographic data. Another problem
    is that, although there are research companies in BiH, it is
    extremely difficult to assess the value of what they produce. Almost
    all the electronic media depend on one index for audience figures
    and for the information they need to win/satisfy advertisers and
    raise revenue. Buying the standard research package is very
    expensive for most. Also, commissioning specific research is
    impossible. Yet these figures are based on only eleven towns -- and
    according to another agency only 42% of the population of BiH live
    in towns. There has been no research on consumption patterns; when
    target groups (for example young people) are available to watch;
    percentage figures are for 'Audience Share' not of the whole
    population, etc. We recommend that USAID urgently commission an
    expert assessment of the research available in BiH to determine its
    real value -- and to ensure all its clients properly understand its
    strengths and limitations. It has been suggested too that the cost
    of research is comparable to western rates because donors have paid
    for it. If this is the case, it is a conundrum. Audience/reader
    research is crucial to all media organisations and so we further
    recommend that USAID consider ways in which, on the basis of an
    expert assessment, research capacity could be strengthened and made
    more cost effective. We believe the assessment, and any consequent
    actions, be quite urgently considered.

2)  Research agencies complain that the media does not understand the
    value of their work. It is hard to assess whether this simply
    reflects irritation that they sell so little and receive so few
    commissions, or whether it is true. We recommend that the assertion
    be assessed, and if confirmed, that more effort be invested in
    persuading USAID clients of its value. Good research is particularly
    important when it comes to scheduling, introducing new programming
    and targeting particular audience segments, as well as simply
    demonstrating audience size.

**F.** **End Piece**

Our last recommendation repeats an earlier theme. Donor attention has
turned away from the Balkans, for USAID as well as other donors. It
therefore becomes urgent that whatever investment there is in the future
be rooted in Bosnia and Bosnian institutions, whether they be
newspapers, television stations, radio stations or training
institutions. Thus, the final recommendation is to work inside
organisations, to "Bosnianise" the effort.

# *Appendix I*

***List of Organisations and Individuals Consulted***

> **- Dunja Mijatović, Amela Odobasić,** Communications Regulatory
> Authority
>
> **- Senad Pećanin**, Editor/Owner DANI, Sarajevo
>
> **- Frane Maroević**, Press and Information Adviser, EU Mission, BiH
>
> \- **Howard Sumka, Michael Henning, Robin Goodkind,** USAID, BiH
>
> \- **Marija Topić,** Editor-in-Chief, Federal TV
>
> \- **Drago Marić,** General Manager, PBS, BiH
>
> \- **Lazar Petrović**, Director of PBS TV
>
> **- Senada Cumurović**, Director of BHRadio1 (PBS Radio)
>
> **- Elvir Svrakić,** Owner and Director TV HAYAT, Sarajevo
>
> **- Aldin Arnautović,** Editor-in-Chief, Radio Stari Grad, Sarajevo
>
> **- Adnan Osmanagić,** Owner and Director, Radio Stari Grad, Sarajevo
>
> **- Alija Behram,** General Manager, RTV Mostar
>
> **- Amna Popovac**, Director of Studio 88 Radio, Mostar
>
> **- Amela Rebac,** Editor-in-chief, Studio 88, Mostar
>
> **- Avis Benes,** Spokesperson, OHR (Office of High Representative)
> Mostar
>
> **- Ante Krišto,** Owner, TV Oscar C, Mostar
>
> **- Zoran Udovicić,** President, The Media Plan Institute, Sarajevo
>
> **- Amir Ibrović,** Country Director, Internews, Sarajevo
>
> **- Douglas Ebner,** Office of Public Affairs, USA Embassy, Sarajevo
>
> **- Sanja Pejčinović,** Office of Public Affairs, US Embassy, Sarajevo
>
> **- Julie O\'Reagan,** Press Attache, US Embassy, Sarajevo
>
> **- Aida Gadžo,** Chief Researcher, marketing agency McCann Ericson,
>
> **- Vedran Šolaja,** Researcher, McCann Ericson
>
> **- Dino Đipa,** Research Director, Prism Research
>
> **- Mirsada Muzur**, Managing Director, Prism Research
>
> **- Semir Salihović,** General Manager, TV Tuzla, Tuzla
>
> **- Kasim Softić,** General Manager, TV Tuzla Kanton, Tuzla
>
> **- Jasna Kapetanović,** Editor-in-Chief,TV Tuzla Kanton, Tuzla
>
> **- Zoran Kapetanovic,** Senior Producer, TV Tuzla Kanton, Tuzla
>
> **- Zlatko Berbič,** Owner Radio Kameleon, Tuzla
>
> **- Sinan Alić**, Director, Front Slobode, Tuzla
>
> **- Nail Kurtić,** Professor of Journalism, Tuzla University
>
> **- Marko Divković,** RFE (Radio Free Europe) correspondent in Tuzla
>
> **- Vehid Jahić,** Oslobodenje Correspondent in Tuzla
>
> **- Senad Zaimović,** Director, Advertising agency Fabrika, Sarajevo
>
> **- Aida Hadžiavdić,** Director, MIB (Mareco Index Bosnia) Sarajevo
>
> **- Samra Luckin,** Executive Director, Marketing Agency BORAM,
> Sarajevo
>
> **- Amra Kapidžić,** Director, BORAM, Sarajevo
>
> **- Gabrijel Vukadin,** General Manager, TV OBN, Sarajevo
>
> **- Darko Aleksić,** Director, Mreza Plus hub, Sarajevo
>
> **- Charles Northtrip,** **Drew Sullivan, Sylvia Mack, Keith
> Raznovski,** Irex
>
> **- Željko Kopanja,** Owner&Director, Nezavisne novine, Banjaluka
>
> **- USA Embasy Banjaluka ( GordanaPopovic, Dragan Kesić, Daniel
> Frouts**
>
> **- Igor Gajić,** Executive Director, Reporter, Banjaluka
>
> **- Dragan Davidović,** General Manager, RV RS (entity PBS), Banjaluka
>
> **- Nataša Tešanović,** Director, ATV Banjaluka
>
> **- Miloš Šolaja,** Director, International Press Center, Banjaluka
>
> **- Senad Ramić,** General Manager, RTV Unsko-sanski Kanton, Bihać
>
> **- Amra Mujagić,** Editor-in-chief, RTV Unsko/sanski Kanton, Bihać
>
> **- Adem Murić,** Director, Prezent, Cazin/Bihać
>
> **- Mehmed Husić,** Owner&Director, ONASA, news agency, Sarajevo
>
> **- Borka Rudić**, General Secretary, Coordination of BiH Journalist
> Organisations
>
> **- Pjer Žalica,** Film Director, Independent Production Company
> Refresh,
>
> **- Zijad Mehic,** Director, Independent Production Company, Refresh
>
> **- Dario Novalić**, General Manager, Start magazine
>
> **- Ozren Kebo,** Editor-in-chief, magazine Start
>
> **- Asim Metiljević,** Director, political magazine, Slobodna Bosna
>
> **- Senad Avdić,** Editor-in-Chief, Slobodna Bosna
>
> **- Jakob Finci**, President of the Interreligious Council, BiH + head
> of the civil service
>
> **- John** **Shearer**

-   **Dieter Lorraine**, CRA/Press Council

> **- Julian Braithwaite**, OHR
>
> **- Mark Thomas**, BBC Consultancy to PBS
>
> **- Daniel Fearn,** Deputy Head of Mission, British Embassy

**- Tarik Jusic**, Researcher and Director of the Media Centar, Sarajevo

**Appendix II**

**Top Advertisers in BiH 2002**

1.  **Proctor and Gamble**

2.  **Coca Cola**

3.  **Saponia**

4.  **SFOR**

5.  **Banja Luka Brewery**

6.  **BH Telecom**

7.  **Colgate Palmolive**

8.  **Heinkel**

9.  **OSCE**

10. **Wrigley**

11. **Tobacco Factory -- Rovinj**

12. **Beirersdorf**

13. **Dita Tuzla**

14. **Hyundai**

**Appendix III December 2002 Audience Share Figures TV**

![](media/image1.jpeg){width="7.011805555555555in"
height="8.74236111111111in"}

![](media/image2.jpeg){width="6.873611111111111in"
height="8.997916666666667in"}

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![](media/image4.jpeg){width="6.884722222222222in"
height="10.364583333333334in"}

**Appendix IV Scope of Work**

**[STATEMENT OF WORK]{.underline}**

**Assessment of Media Sector in Bosnia and Herzegovina and
Recommendations for USAID Assistance 2003-2005**

**I. Purpose of Assessment**

This assessment will result in recommendations to USAID/Bosnia on how to
structure programs for continued assistance to the independent media in
BiH

**II. Background**

The break-up of the former Yugoslavia and subsequent war between the
successor states was fueled in part by the states\' complete control
over their respective media. In Croatia, Serbia and Bosnia, this
autocratic control over the flow and content of information kept
citizens from fully understanding the nature of the conflict and led
them to make decisions that further inflamed the violent climate.

As a consequence, one of USAID\'s earliest objectives in the development
of its media assistance program in BiH was to target and support print
and broadcast media outlets which were striving to disseminate
information free from government control. The predominant role of
television in Bosnia led USAID/Sarajevo, through Internews, to provide
technical assistance, training, and equipment to alternative television
and radio stations, while at the same time building this sector\'s
management, marketing, and production techniques. In the print sector,
the Office of Transition Initiatives (OTI) was one of the first
supporters of newspapers and journals in the Republika Srpska (RS). In
order to improve assistance to the print media sector in BiH, USAID
started a print media program through IREX in 1998, which paralleled the
broadcast segment implemented through Internews.

USAID combined the two separate programs in 1999 and awarded a
three-year cooperative agreement to IREX to implement a comprehensive
media program.

USAID has allocated over \$34 million since 1996 to support independent
broadcast and print media in Bosnia-Herzegovina. By providing technical
assistance, training, and equipment to alternative television and radio
stations, USAID is striving to build management, marketing, and
production skills to support the emergence of a viable and independent
broadcast media sector in Bosnia.

The three-year cooperative agreement with IREX has been extended for one
year and will now end in September, 2003. The program is geared to
developing a sounder and more politically secure financial base for
independent media outlets. IREX provides technical assistance, training
and small grants of equipment and funding to selected organizations
throughout Bosnia-Herzegovina. Program activities are designed to
strengthen news coverage, highlight local culture, develop local
production, and strengthen the financial base of broadcast and print
media through better business management, distribution and marketing.

Highlights of USAID media programs in BiH include:

[Broadcast Media]{.underline}

• Through Internews, a U.S.-based NGO, USAID assistance to the broadcast
media benefited journalists, cameramen, tape editors, producers, and
station managers from 12 selected radio and television stations
throughout Bosnia-Herzegovina. Internews professionals-in-residence
worked with stations to boost overall production, while technical
experts worked with stations to improve specific production skills and
transmitting capacity.

• Through grants and technical assistance, Internews helped improve the
capacity of commercial production houses to produce programming for
Bosnian audiences.

• In 1999, Internews helped to establish a country-wide Association of
Broadcasters.

• In 1999, USAID transferred \$2.5 million to the United States
Information Agency (USIA) for the Open Broadcast Network (OBN), the only
cross-entity television broadcast network at that time in Bosnia and
Herzegovina.

• USAID\'s Office of Transition Initiatives (OTI) provided \$9 million
in direct support to alternative print, radio, and television outlets
throughout Bosnia-Herzegovina. OTI helped develop 22 radio stations,
reaching 75 percent of the populace in Bosnia-Herzegovina.

• With IREX assistance the first completely commercial television
network called Mreza Plus (Network Plus) was launched in September,
2001. The network comprised of 5 television stations from Sarajevo,
Tuzla, Banja Luka and Mostar. With its network of affiliates Mreza Plus
covers 85 percent of the territory of BiH.

[Print Media]{.underline}

• USAID has been supporting the Independent Open News Agency (ONASA) to
expand nationwide and improve the quality and quantity of its services.

• Assistance is also being provided to journalist associations, which
should play a key role in protecting journalists\' rights, developing
professional standards, providing in-service training, and developing
media laws and regulations. IREX has built upon the increasing
cooperation among existing BiH associations, resulting in the
Coordination of Associations developed in 2002.

• Of the 34 publications USAID has supported through OTI, USAID
continues providing comprehensive technical assistance, training, and
grants support to: Reporter, Panorama and Nezavisne Novine in Republika
Srpska, and Front Slobode, Dani, Prezent, and Start in the Federation.

• In 1998-1999, USAID transferred over \$ 1 million to USIA for the
training of journalists through international exchange programs and
seminars. Funding was also used to provide
U.S.-professionals-in-residence to assist Bosnian media enterprises with
improvements in both production and business management expertise.

• In October 2000, with help from IREX, Nezavisne Novine took a giant
step forward and began national distribution of its newspaper
positioning itself to be BiH's only national independent news voice.

• USAID through IREX helped Nezavisne Novine to develop an ambitious
plan to take itself to the next level of growth, profitability and
national influence, by opening the first independent printing press.
Nezavisne Novine purchased its own printing press and printing plant to
save money, improve quality and decrease its dependence on the
deteriorating state-owned printing plant. The funding for this project
consisted of a commercial loan from USAID\'s Business Development
Program in the amount of KM 1 million; KM 400,000 invested by Mr.
Kopanja; and grants from USAID/IREX and other donors such as the Open
Society Fund (OSI), Press Now and Norwegian Embassy (totaling
approximately KM 300,000).

**III. Statement of work**

The Assessment Team, consisting of a team coordinator from USAID, a
local expert on the Bosnia media situation, and an expatriate consultant
will undertake the work required to produce a report that will evaluate
the state of the Bosnian independent/commercial media sector in terms of
financial sustainability and in terms of how effectively the sector
provides balanced information.

The main purpose of the assessment will not be to evaluate the past
performance of USAID implementing partners, but rather to develop
recommendations for future activities based on the current media and
political situations in BiH. The sector assessment will also identify
impediments to the development of a balanced independent media sector.

In carrying out the sector assessment, the assessment team should review
the work that USAID has funded since 1995 in support of media; the
activities that other donors and governments have supported or funded;
and the state of media in BiH, including the balance between public and
private sectors.

The following topics and questions are illustrative of the issues that
USAID/Bosnia would like the assessment team to address. These should not
constrain the contractor from pursuing other relevant issues.

-   Are the Intermediate Results (IRs) framed in USAID\'s current
    cooperative agreement (C.A.) with IREX still relevant to
    strengthening the independent media sector in BiH? USAID would like
    to see recommendations for focusing its media assistance program and
    limiting the number of IRs.

-   Where has USAID\'s media program been most successful to date and
    where has it been least successful in terms of achieving the
    objectives and IRs set forth in all grants and C.A.s?

-   Have USAID programs successfully produced results across all regions
    of BiH? Is sufficient attention focused on smaller regional and
    community media?

-   To what extent have USAID programs fostered sustainability in its
    activities? USAID would like the contractor\'s recommendations for
    improving sustainability.

-   How is media development influenced by regional and international
    factors, and to what extent can media activities in BiH be
    sustainable in view of such factors?

-   What specific obstacles exist to development of a balanced
    independent media sector in BiH? USAID would like the contractor\'s
    recommendations on how activities can most effectively be carried
    out with such obstacles taken into consideration.

-   Financial support for media presently provided by some other donors,
    in particular by EU and the individual European donor countries, and
    their plans for future assistance.

-   What possibilities exist for private sector media to be supported by
    private sector investors and banks?

-   Is there a need for USAID to support the public sector media?

-   How will the recent changes in political environment in BiH effect
    development of commercial sector media.

-   Legal environment, public sector media, the role of Communication
    Regulatory Agency - how these issues affect commercial sector media,
    and what should be the USAID role in these issues.

-   Given the current state of affairs of media in BiH, what specific
    activities would be the most valuable investment of USAID resources
    over the next 3-5 years?

**IV. Contractor Background and Skills**

The assessment team will include an international consultant with at
least 10 years of experience in development. The consultant should have
an understanding of media in transition countries, in both the public
and private sectors, and ideally a specific understanding of these
issues in BiH. The consultant should have excellent organizational,
analytical, and writing skills.

Additional members of the team include a USAID/Bosnia media professional
and an independent local media expert. The USAID/Bosnia team member will
provide overall coordination for the team. The international consultant
will take the lead in assembling the information collected from the team
members and consolidating it in a report.

The assessment members will be logistically assisted by USAID/Bosnia.

Prior to beginning the assessment, the team members will review relevant
documentations provided by the Mission that outlines issues in the BiH
media sector.

**V.** **Assessment Methodology and Schedule**

The team's focus will be to assess the media sector broadly in BiH, with
a specific emphasis on how USAID should structure future programmatic
assistance in support of the development of independent media. To this
end, the team will:

1.  Review all relevant USAID documents,

2.  Conduct interviews with key USAID/Sarajevo staff,

3.  Conduct interviews with select media outlets,

4.  Conduct interviews with representatives of other international
    donors and organizations,

5.  Conduct interviews with IREX representatives in Sarajevo

6.  Conduct interviews with CRA representatives in Sarajevo

The team will be based in Sarajevo but should spend sufficient time
conducting site visits outside Sarajevo. The assessment will take three
weeks. All team members are authorized to work a 6-day week.

**VI. Timeline**

1.  The in-country assessment will take place between January 3- January
    23, 2002. Prior to the commencement of the in-country assessment,
    the team will be expected to do preparation work (international
    consultant two days and national consultant five days).

2.  Prior to the end of the field work, the team will produce annotated
    outline of an initial report for USAID review. The first draft of
    the assessment report should be completed by January 30, 2002 and
    should be given to Robyn Goodkind /Deputy Democracy Officer

3.  USAID/Sarajevo is to make recommendations on the 1st draft by
    February 6, 2003.

4.  The final report will be submitted to Robyn Goodkind at
    USAID/Democracy Office by February 13, 2003.

5.  It is expected that the team members will work five working days
    during the three-week period following the completion of the
    in-country field work to produce a final report.

**VII. Logistic support and Technical direction**

The USAID Mission in Sarajevo will provide logistic support, including,
but not limited to travel, transportation, clerical services and office
support, interpretation and communications. Technical direction during
the performance of this delivery order will be provided by Jasna
Kilalic, USAID Program Manager Assistant and Robyn Goodkind, Deputy
Director of the Democracy Office.

[^1]: The State of BiH consists of Republika Srpska (49% of BiH
    territory and majority Serb population) and the Federation of BiH
    (51% of BiH territory and majority Bosniak and Croat population).
    Common institutions are the Presidency, Parliament, Council of
    Ministers and the Constitutional Court. Responsibility for foreign
    policy, monetary policy, international trade and customs, European
    integration and refugees resides with these institutions.

[^2]: ^2^ \$1=1.9KM 05/01/03 & figures from Office of the High
    Representative Economic Newsletter October 2002

[^3]: ^3^ Law on Basis of the Public Broadcasting System and on the
    Public Broadcasting Services of Bosnia and Herzegovina -- imposed by
    the High Representative May 2002

[^4]: ^4^ The intention is to privatise the transmitter networks,
    theoretically making the facilities and services available at
    competitive prices to both commercial and public stations. This is
    John Shearer's responsibility and is to be complete by June 30^th^
    when he leaves. The process of privatisation of the transmission
    networks should perhaps be closely monitored.

[^5]: ^5^ UNDP 2002. Currently RTV RS is unable to pay for anything --
    according to FedTV they only collect 18% of their subscriptions,
    according to RTRS it is 30%. They also have a 7m KM debt and are
    existing on barter arrangements. They are too losing advertising
    revenue to the Mreza Plus station in RS, ATV.

[^6]: ^7^ Mreza Plus, a private, commercial network, has five member
    stations and four affiliates and is said to cover 85% of the
    population. The authors believe this figure is rather optimistic.

[^7]: ^8^ The Open Society Institute, Network Media Programme has
    expressed interest in the idea.

[^8]: ^9^ McCann Erikson 01/02

[^9]: ^10^ This figure does not include advertisements sold direct --
    nor frequently the substantial barter deals done. It is therefore
    not possible to estimate an accurate total size for media
    advertising revenues. According to Fabrika Agency, if it were not
    for them, and the universal heavy discounts given, the gross market
    should be 60m -- 62m KM. **However, an independent researcher
    cautions that all figures, except those for revenues that go through
    agencies, are actually 'guess work'.**

[^10]: ^11^ Prism have developed a database which looks valuable -- but
    further expert opinion is needed.

[^11]: ^12^ The station claims 35% but we have taken Mareco's figure
    both for it and for FedTV**. Audience share is the percentage of
    those available to watch, [not]{.underline} of the total
    population.**

[^12]: ^13^ Mareco's figures for 1 week peak winter viewing by nation,
    entity and city are attached in Appendix II

[^13]: ^14^ European Union

[^14]: ^15^ TV Hayat, Sarajevo; ATV Banja Luka; TV Tuzla; Oscar C Mostar
    and RTV Mostar

[^15]: ^16^ McCann Erikson figure 2002

[^16]: ^20^ 'Competing for Advertisers -- Public Broadcasting Service
    versus Commercial TV' -- Tarik Jusic, published by the Media Centar,
    Sarajevo October 2002

[^17]: ^21^ This figure should be treated with even more caution --
    unless the five organisations we visited were being untruthful,
    between them they alone brought in more than double this amount. All
    radio figures in this report except for BH R1 are for 2001 -- we
    were unable to get access to those for 2002.

[^18]: ^22^ The paper says it produces 18k copies at week-ends and 16k
    early in the week. Of these 20% - 25% are unsold. Distribution
    remains a major problem.

[^19]: ^23^ Dani is widely

    admired within the media community and we were assured, even by
    competitors, that its circulation is rising again with improved
    content.