The Public Service Broadcaster of Lithuania in the Era of Commercialization

One-year Master’s Thesis submitted to the Department of Informatics and Media, Uppsala

University, May 2011, for obtaining the One-year Master’s Degree of Social Science in the field

of Media and Communication Studies

Candidate: Monika Tichonovaite

Academic advisor: Christian Fuchs

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Abstract

The television industry in Lithuania is analyzed in this thesis with a focus on the impact

of commercialization on the public service broadcaster. The purpose of the research paper is to

describe the impact of the changing market on the public service broadcaster of Lithuania using

as theoretical framework the approach of the political economy of the media and communication

and quantitative methods. One part of the thesis is the theoretical research, which is done by

analyzing and systematically presenting books and articles that relate to the thesis’s topic. In the

second part of the work, the theoretical framework is applied to the Lithuanian television market.

In addition, an empirical study is conducted in order to apply the theoretical discussion and

answer the main research question.

The main results of the study suggest that the public service broadcaster of Lithuania

managed to maintain its programmes’ diversity. However, the amount of entertainment, imported

production and advertising has increased. Therefore, a certain concern about growing

commercialization is reasonable. These changes correspond to the tendencies in the European

television industry. However, Lithuanian viewers seem to prefer the more heavily

commercialized programmes since the leader of the market is a commercial television station,

whose market share is almost twice bigger than LTV’s. Thus, LTV is facing a dilemma between

preserving quality and diversity and commercializing its programmes in order to increase its

audience share (dilemma between quality and audience share).

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Table of contents

Introduction 6

1.1 Background 6

1.2 Research Questions and Hypotheses 7

1.3 Purpose of the Study 10

1.4 Definition of Concepts 11

1.5 Significance of the Study 12

1.6 Methodology 12

2. A Theoretical Approach to Changes in the European Television Industry 14

2.1 Privatization 16

2.2 Concentration 18

2.3 Internationalization 20

2.4 Commercialization 24

2.4.1 The Impact of Competition 24

2.4.2 The Impact of Advertising 26

2.4.3 Consequences of Commercialization 27

2.4.4 Influence on Diversity 30

2.5 Summary 31

3. The Application of Theoretical Assumptions to the Television Market in Lithuania 33

3.1 Methodology 33

3.1.1 Limitations of the Empirical Research 36

3.2 Privatization 37

3.3 Concentration 40

3.4 Internationalization 43

3.5 Commercialization 47

3.5.1 The First Period: 1990-1996 48

3.5.2 The Second Period: 1996-2001 49

3.5.3 The Third Period: 2001-2009 50

3.5.4 Information vs. Entertainment 52

3.5.5 Diversity of the Content 55

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3.5.6 Model of Revenue 59

3.6 Summary 61

4. Conclusions 64

4.1 Discussion 69

4.2 Outlook 71

List of references 73

List of charts and tables

Table 1. The ownership and the audience share of television channels 41

Chart 1. Imported production on LTV in various years 44

Chart 2. Share of European productions on Lithuanian television 45

Table 2. The 5 most popular programmes on Lithuanian television 46

Chart 3. Share of News and Current affairs programmes in total programmes on LTV

in various years 53

Chart 4. Share of Light entertainment programmes in total programmes on LTV

in various years 54

Chart 5. The television industry's income from advertising 55

Chart 6. Diversity of progammes on LTV in various years (measured with the help of

Shannon's H) 56

Chart 7. Share of different progamme types on LTV in various years 57

Chart 8. Budget of LTV 60

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Introduction

The television industry in Lithuania will be analyzed in this research paper with a focus

on the impact of commercialization on the public service broadcaster. In order to do this, the

political and historical context of the Lithuanian television industry is truly important therefore

the background will be presented shortly.

1.1 Background

The historical and political context of the Lithuanian television industry is different when

comparing it with the ones seen in Western Europe. While Public Service Broadcasting (PSB)

was enjoying its exceptional monopolistic role in the rest of democratic Europe, Lithuania (a part

of the Soviet Union then) had one television channel, which was owned, controlled and censored

by the state. It was the government’s tool that combined communist propaganda and a cultural

mission (Pečiulis 2010b, 84).

The first signs of changes in broadcasting were observed in the autumn of 1988 when the

programming of Lithuanian television started to change gradually. Religion, which had been

banned during the occupation of the Soviet Union, returned to television by broadcasting

religious programmes. In addition, the commemoration of the independence of Lithuania was

broadcast in 1989 (Buzanas and Štikelis 1997, 40). In this way, the PSB offered many

programmes about the development of Lithuania, its people and economic situation. Moreover,

the ideas of statehood were actively advocated on television.

Following this, there was a great transformation of the political and economic situation,

which started in 1990 when Lithuania announced its independence from the Soviet Union and

created its own framework of government. In Lithuania, the processes had to start from the very

beginning since all the old structures proved inappropriate for the new situation. As the main goal

of the country was to create a democratic republic, new political parties were created and new

laws adopted. In addition, according to scholars (see Balčytienė 2002; Lukošiūnas 2005), this

was the start of the first period of independent television broadcasting history during which the

State television company was changed from a tool used to spread propaganda to a public service

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broadcaster (LTV) with a new mission and new goals. The period formally ended in 1996 with

the adoption of the Law on the Provision of Information to the Public and the Law on the

National Radio and Television (Lukošiūnas 2005, 1041).

Unfortunately, the process of the transformation of television was not so fluent since

politicians in Lithuania had inherited a strong dose of the totalitarian mentality. That is why the

broadcaster increasingly became a tool of the government and parliament (see Lukošiūnas and

Bartasevičius 1993; Tapinas 1997). Changes in the sector were of crucial importance: it was

necessary to shift from the Soviet to the Western concept of journalism by liberating television

from censorship and political control and adapting a free market economy with all its

consequences (Balčytienė and Lauk 2005, 97). As a result, the standards of professionalism in

LTV declined and the newly formed National Broadcaster started to lose its audience to

competitive Russian, Ostankino and Polish television companies (Lukošiūnas and Bartasevičius

1993, 258).

Furthermore, new commercial broadcasters were allowed to enter the market as it was

assumed that the best way to arrange the industry was to warrant different sources of information.

The first commercial broadcaster was introduced in 1992 (Tele-3 then and TV3 now) and two

more national terrestrial commercial television companies followed in 1993 (BTV) and 1995

(LNK). All these processes coincided with global tendencies of change in the television

industries, which are going to be analyzed in this paper. However, it is important to point out that

the Lithuanian television market has its own peculiarities, which are caused by its history and

traditions; therefore, it cannot be assumed that global tendencies have had the same consequences

here.

1.2 Research Questions and Hypotheses

The main research question of the study is how commercialization has influenced public

television broadcasting in Lithuania.

Although, this question can be answered in a couple of different ways, this work is a

combination of theoretical and empirical study. In order to answer the main question, two sub-

questions are raised.

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The first sub-question is:

What are the main characteristics of television commercialization in general? When trying

to answer this, the approaches of scholars who analyze commercialization, its main elements and

its impact on television broadcasting in Europe will be examined. In addition, the possible

consequences of this market trend will be determined.

The second sub-question is:

Which characteristics of television commercialization (according to the scholars) can be

detected in public broadcasting in Lithuania? The literature concerning the changes in the

Lithuanian television market and their implications on public service broadcasting will be

analyzed here.

In the empirical part of the work the validity of theoretical assumptions will be tested by

the examination of the public service broadcaster’s revenues and the changes in specific

programmes.

Following this, several assumptions are made to help analyze the literature concerning the

changes influenced by the commercialization in the public service broadcaster of Lithuania. To

start with, commercialization does not go alone; it is usually accompanied by privatization,

concentration and internationalization. Therefore, all these trends in the television market should

be taken into account when dealing with the commercialization of the industry. In addition, the

main consequences of this process as described by the scholars are the trivialization of the

content of programming, the growing amount of advertising in television and the decrease of the

programmes’ diversity. Five main hypotheses are made, which will be tested in the paper in order

to answer the main research question:

Hypothesis 1 – the number of news and current affairs programmes on LTV has

continuously decreased in the years 1990-2009

It is important to analyze this characteristic of the PSB programming as public

broadcasting is obliged to be responsible for protecting the space where citizens can discuss

important political and social issues and get objective, impartial and diverse information (see

McQuail 1998; Siune, 1998; O’Hagan and Jennings 2003; Van der Wurff 2005; McChesney

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2008). This hypothesis will be tested by analyzing the trend of commercialization as it is assumed

that it may have the biggest influence to the content of television programming.

Hypothesis 2 – the number of entertainment programming on LTV has continuously

increased in the years 1990-2009

This hypothesis is closely related to the first one and can help to answer the question

where the strategy of programming in the PSB is moving. If the number of entertainment

programmes is quite stable, the public service broadcaster cannot be blamed for seeking ratings

and profit. However, if the number of entertainment programmes is increasing, it may mean that

LTV is becoming more and more similar to commercial broadcasters and may abandon its

mission to serve society. This hypothesis will be verified by analyzing the trend of

commercialization as well.

Hypothesis 3 – the amount of advertising on LTV has increased in the years 2001-2009

The testing of this hypothesis will provide some more information for analyzing the

change of LTV as some scholars argue that public service broadcasters should be banned from

getting commercial incomes since it can have a negative impact on its mission to broadcast to the

whole population of the country without segmenting its audience and targeting those who are

most important to advertisers (see Motta and Polo 1997). This hypothesis is assumed to be

closely related to the trends of privatization, concentration and commercialization since private

commercial broadcasters may have an impact on the PSB’s possibility to get more income from

advertising. Likewise, this relates to the fact that the public service broadcaster, which is partly

supported by the government, should not be able to get commercial income at all. Following this,

the process of concentration can be estimated as the attempt to cumulate power in order to have

advantages in competition.

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Hypothesis 4 – the quantity of imported TV production has increased on LTV in the years

1990-2009

The research to prove this hypothesis true will be focused on showing what amount of the

public service broadcaster’s production is produced at home and how many of it is imported. The

result will be significant since it will show the impact of the trend of internationalization on

PSB’s programming – whether it counts on domestic production and information or on imported

programming.

Hypothesis 5 – the diversity of programming has decreased on LTV in the years 1990-

2009

The approval or disproval of this hypothesis will show if the diversity of opinions is

warranted in LTV. It will be tested by analyzing the trend of commercialization since the public

service broadcaster commits to making sure that plurality and diversity is a part of its mission to

serve society and democracy (see McQuail 1998; Van der Wurff 2005).

1.3 Purpose of the Study

The purpose of the study is to describe the influence of the changing market on the public

service broadcaster of Lithuania by using a theoretical framework and quantitative methods in

order to show an economic picture and political context of the television industry in Lithuania.

The public service broadcaster in this study will be defined as a public, nonprofit and

noncommercial institution, which provides universal service in the territorial sense, warrants a

space for debate and information, protects diversity and is accountable to the citizens. In addition,

it has some elements of public finance and its content is regulated by law (see Brants and Siune

1992; Siune and Hultén 1998; McQuail 1998).

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1.4 Definition of Concepts

Some of the concepts that are relevant for this study are:

Privatization – a process of transforming a company’s economic structures from government

ownership to private ownership with the goal of making economic profit and work according to

the rules of the market. In addition, it usually reduces a company’s accountability to the citizens.

Internationalization – a dual process caused by deregulation, which gives the possibility to work

beyond the boundaries of the state and export production to other markets. In addition, it

increases competition since the market is not limited within one country.

Concentration – a process of gathering different companies in the hands of one owner. The

process causes the reduction of the players in the market but not necessarily reduces competition.

In addition, big companies gain more power.

Trivialization of the content – a process, by which the content of programmes is simplified in

order to reach more of the audience with the lower price of production. In this way, merit

programming is replaced by lower quality entertainment programming.

Diversity of content – the heterogeneity of television content on one or more relevant dimensions

(Van der Wurff 2005, 250). In this paper, vertical diversity is important. It refers to heterogeneity

of content within a single network according to the number of different programme types (Litman

1979, 402).

Commercial broadcaster – a privately owned, profit-making and commercial television

broadcasting company.

Merit programme – a television programme, whose content focuses on news, current political

matters, economics, social affairs and educational elements. In addition, it includes

documentaries, practical and advisory programmes.

Entertainment programme – a television programme, whose main aim is to entertain the

audience. This category includes talk shows, television games or lotteries, television plays and

movies, series and serials, music and concerts and sport broadcasts, excluding sports news.

The concepts are defined by comparing definitions of different scholars, working out their

similarities and describing the features, which seem to be the most important.

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1.5 Significance of the Study

The topic is academically relevant and important as Lithuania is a young democratic

country and its television industry developed differently from other Western European countries

with a long history of democratic and independent governance. Furthermore, the National

Broadcaster of Lithuania had been the one and only broadcaster in the country for more than 30

years under a strict control and censorship of the Soviet Union’s government before Lithuania

became independent and consequentially, commercial broadcasters were allowed to enter the

market. Therefore, it is significant to analyze the influence of market commercialization on the

public service broadcaster and identify the main changes in its market share, revenue and

programming. Likewise, a comparative approach will reveal the role of the public service

broadcaster in the changing industry from the first years of independence to nowadays, drawing a

full picture of the situation as there have been no recent studies which do that.

1.6 Methodology

The largest part of the thesis is the theoretical research, which was done by analyzing

books and articles written by scholars. First of all, the trends in the television industry are

determined (privatization, concentration, internationalization and commercialization). Secondly,

the research for literature is done by collecting books and articles that are the most relevant for

the analysis. The most important works are those that describe and analyze the changes in the

European television industry as the European context is more familiar than the American one

with the Lithuanian television market. Furthermore, all trends, regulations and outcomes that

have affected the television industry are analyzed.

In the second part of the work, a theoretical framework is applied to the Lithuanian

television market and is analyzed according to the works of the scholars, although there are just a

few publications about the changes in the Lithuanian television industry. Most of the articles

describe changes in the media in general. The articles dealing only with the subject of television

are related mainly to technology and not to qualitative studies of the television content.

Consequently, it is impossible to test the hypotheses of this research on the theoretical level only.

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Therefore, an empirical study was conducted in order to supplement the theoretical part and

answer the main research question.

A more detailed description of methods used in this study will be given in the first sub-

chapter of Chapter 3.

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2. A Theoretical Approach to Changes in the European Television Industry

Changes concerning the field of television in Europe have been analyzed by many

scholars (see Brants 1992; Siune 1992; 1998; Motta and Polo 1997; Meier and Trappel 1998;

McQuail 1992; 1998; Bagdikian 2004; Van der Wurff 2005) from different perspectives.

However, there is a consensus that the television industry is significantly different at the

beginning of the 21st century in comparison with its roots in the 20th century (see Brants and

Siune 1992; Siune 1998; Siune and Hultén 1998).

To begin with, public service broadcasters (PSB) had strong positions in media industries

from the very beginning. Since they were assumed to be powerful tools in shaping public

opinion, they were strictly regulated by laws (Siune and Hultén 1998, 24). Thus, easy entrance to

the television market was blocked and public service broadcasters formed strong monopolies.

However, the situation changed during the last decade of the 20th century. Some scholars argue

that the significant actor here was neoliberlism (see Brants and Siune 1992; McChesney 2001),

which manifested through “a loosening of the grip”. Following this, a gradual retreat of the ruling

state’s control could be observed as the television industry became more market oriented.

Thus, the neoliberal doctrine was deeply opposed to such state interventionist theories as

those of Keynes, which was meaningful in the 1930s. This political economic theory referred to

the liberation of “individual entrepreneurial freedoms and skills within an institutional framework

characterized by strong private property rights, free markets, and free trade” (Harvey 2005, 2).

The state was important to such an extent that it could create and preserve an institutional

framework for such practices. In this way, neoliberals believed that markets could solve social

problems far better than any alternative course by using new technologies. Therefore, “the

centerpiece of neoliberal policies was invariably a call for commercial media and communication

markets to be deregulated. However, what this really meant in practice was that they were re-

regulated to serve corporate interests” (McChesney 2001, 2).

As a consequence, according to Siune (1998), starting in 1990, four main trends could be

observed in the European broadcasting industry: privatization, concentration of these

broadcasters, internationalization and commercialization. As a result, “many new private

channels were granted licenses to operate in a commercial mode” (Siune and Hultén 1998, 23f).

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Thus, in this new competitive market, monopolies collapsed and public service broadcasters

struggled for existence.

It is important to note that these trends necessitated changes to laws and regulations in

order to adhere to the new commercial logic. In fact, according to scholars, deregulation is one of

the factors, which is closely related to all four trends that are changing the nature of television

broadcasting in Europe (see Pfetsch 1996; Meier and Trappel 1998; McChesney 2008). Also the

“loosening of restrictions for private operators, combined with tightening of formative and

balancing rules” (Brants and Siune 1992, 114), was a major factor. In addition, former

monopolies – public service broadcasters – were also changed by deregulation. According to

scholars, most public channels are partly financed by advertising nowadays, and earlier

restrictions have often been eased (Siune and Hultén 1998, 24).

Moreover, the impact of the changes was not ended by deregulation. According to Siune

(1998), the content of television has changed resulting in less educational programming and more

entertainment programmes, which “seem to become more and more alike everywhere. The

backbone of most media is still news, while the rest is more or less entertainment” (Siune, 1998,

2). However, according to McChesney, “the public sector has a cornerstone role in

communication, and fundamental interests to protect” (McChesney 2008, 424). Therefore, public

service broadcasters should be protected from fundamental changes that have resulted from the

growing commercialization.

It is assumed that all four trends of changes as described by scholars are closely related to

each other and this overlapping has to some extent resulted in growing profit making. That is

why they will be analyzed by employing the approach of the political economy of the media and

communication in order to understand their influence to public service broadcasting.

Political economy refers to “the study of the social relations, particularly the power

relations, that mutually constitutes the production, distribution, and consumption of resources”

(Mosco 1996, 25). From this point of view, television programmes and audiences are the primary

resources. Political economy also tends to concentrate on a specific set of social relations

organized around power. In this case, it is the power relation between public broadcasting and

privately-owned broadcasters in Lithuania. Therefore, it is important to look at “shifting forms of

control along the production, distribution, and consumption circuit” (Mosco 1996, 25).

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The most important ideas of the political economy approach used in this paper are social

change and history and the social totality. The first one refers to the examination of dynamic

forces in capitalism, which are responsible for its growth and change (Mosco 1996, 27). In

addition, the role of history is central here. The use of the concept of social totality means that

political economy analyzes the range of problems, which tend to be situated in the compartments

of several academic disciplines (Mosco 1996, 29). In this case, the connection between politics,

judicial regulation, economy and social sphere is the most important.

2.1 Privatization

The trend, which is presented and analyzed in this sub-chapter, is privatization. Two main

points will be clarified by analyzing the relevant literature: the impact of privatization on the

entire industry of European television and the main differences between private and public

service broadcasting. These questions will be examined in order to have a clear theoretical

framework for further analysis of the Lithuanian television industry.

According to scholars, the trend of privatization began to reach the European Continent in

the1980’s (see Wildman and Siwek 1987; Waterman 1988; McQuail, de Mateo and Tapper

1992). Its early manifestations were observed in Italy where “‘pirate’ cable systems began to

emerge in a direct challenge to the states monopoly of broadcasters” (Wildman and Siwek 1987,

71). As a result, Italian courts decided to give them an opportunity to operate legally, and the first

commercial, over-the-air broadcasters were legalized and proliferated rapidly (Wildman and

Siwek 1987, 72). Although, according to Wildman and Siwek (1987), growth in private

advertising-supported broadcasting had proceeded the most rapidly in Italy. New types of

ownership were allowed to enter the market gradually, to traditionally conservative and highly

restricted television industries, in the whole of Western Europe as well. As a result, they

supplemented or replaced the previously dominant public ownership model (McQuail, de Mateo

and Tapper 1992, 20). However, a purely commercial national system can only be found in

Luxembourg (Siune and Hultén 1998, 27). Other countries have chosen a dual system where

public service and commercial broadcasters compete under market conditions.

In order to understand the trend of privatization, it is necessary to understand the concept

of public broadcasting – which is the contrary to private ownership (see Siune and Hultén 1998;

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McQuail 1998). Thus, according to McChesney, in large parts of the world, the PSB refers to “a

nonprofit, noncommercial broadcasting service directed at the entire population and providing a

full range of programming”. In theory it should be accountable to citizenry, have some distance

from the dominant forces holding political power, and not rely upon the market to determine its

programming” (McChesney 2008, 446). Following this logic, private ownership refers to

commercial profit-making broadcasting, which is not necessarily accountable to citizens and

determines its programming by the rules of the market.

Thus, it is important to identify the outcomes of this process, which has affected all the

European television industries. First of all, the increased number of participants in the market

leads to an increased level of competition. As a result, the communication of political information

can potentially suffer since, according to scholars, “the media in the democracy is regarded as an

essential linkage between the political system and the citizen” (Pfetsch 1996, 429). However,

growing competition and privatization represent challenges to this element of the public service

broadcasting obligation (Syvertsen 2003, 166), which is mandatory for providing materials

benefiting a democracy (McChesney 2008, 457) and truly important to protect.

Furthermore, privatization is closely related to the deregulation of the market (Pfetsch

1996, 432). Therefore, the role of the state as a regulator declines (McQuail, de Mateo and

Tapper 1992, 24). Consequently, the system of broadcasting is directed away from the normative

towards commercial goals and from a political system towards a market principle (Pfetsch 1996,

432) where the best consumed production is entertainment and the role of the PSB, as the vehicle

of democratic values and comprehensive and diversified political information, becomes

complicated. Moreover, public service broadcasters operate under the obligation of producing

programmes that are socially and culturally valuable (Syvertsen 2003, 166), high-quality

children’s programming and experimental and high-quality entertainment material – the types of

programming frowned upon by the market (McChesney 2008, 457). However, as private

commercial broadcasters are not obliged to do this, they can offer audience programming that is

potentially the most attractive and profitable. Following this, competition for audiences between

private and public broadcasting becomes unequal.

On the other hand, privatization is one of the reasons, as indicated by scholars, why “a

tremendous influx of US films and Television Series” entering the European television market

became possible (Waterman 1988, 141). Due to the trend of privatization, a lot of blank space has

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developed in the schedules of private commercial channels. The cheapest way to fill this blank

space was to purchase productions from the US (De Bens, Kelly and Bakke 1992, 76). In contrast

to the PSB, where production was traditionally made ‘in-house’, private terrestrial broadcasters

became dependent entirely on commercial programme sources. As a consequence, competition

among programme buyers increased as well (see Wildman and Siwek 1987; De Bens, Kelly and

Bakke 1992, 76). And public service broadcasters could no longer behave as monopolists, which

have exceptional rights to buy programmes for the price they considered to be appropriate. The

result of all these changes was “a significant escalation in the prices of series and films for

television” (Wildman and Siwek 1987, 73). Finally, privatization can be seen as a premise for

commercialization, because new opportunities for advertising in television were created

(Waterman 1988, 147).

2.2 Concentration

The trend of concentration will be analyzed in this sub-chapter in order to determine its

impact on the performance of public service broadcasting. This will give a better understanding

of the overall picture of changes to the television industry. In addition, the concentration’s

relation to other trends will be clarified, since they are closely related and cannot be analyzed

separately from each other.

To begin with, the development of private enterprises can be called the main precondition

for this concentration. Since without private ownership, concentration would not have been

possible. According to scholars, it began during the 1980s when the move towards economic

integration had been first observed (Mazzoleni and Palmer 1992, 26). In addition to this,

“preferred business growth strategies, such as the formation of trusts and strategic alliances, and

the search for economies of scale and scope, as well as attempts to spread risks, and the search

for new fields of operation, have likewise furthered the concentration process” (Meier and

Trappel 1998, 39).

In addition, the second important premise for concentration on a national level has been

the deregulation of laws, as governments might not allow such processes in the television

markets. However, on the one hand, “there is a one-to-one relationship between the economic

power and the political power for the control of the resources of communication: the tycoons

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flatter the politicians, and the politicians‘ circles favor the tycoon’s inroads into the media

strongholds” (Mazzoleni and Palmer 1992, 41). On the other hand, according to scholars, much

of the deregulation legislation has been written by “lobbyists and other representatives of the

companies and industries to be deregulated” (Meehan 2007, 15). Therefore, deregulation has

given stronger power to business to do whatever it wants, while its social accountability has been

steadily reduced (Schiller 1991, 44).

Following this, four types of concentration can be identified as presented in the literature.

First of all, concentration can be horizontal or mono-media (Doyle 2002, 13), when one company

owns several media outlets in one sector (i.e. three TV stations). According to Doyle, this is the

most common strategy, which allows organizations to expand their market share and rationalize

resources (Doyle 2002, 45). The second type of concentration is vertical, when media enterprises

own several companies in different sectors (i.e. editorial office, printing-house, a company that

distributes the commodity etc.) (Meier and Trappel 1998, 41). The third type of cross-media

concentration or multimedia concentration (Doyle 2002, 13) refers to the ownership of different

media outlets in different media markets (i.e. a newspaper and TV station in Sweden and a TV

and radio station in Norway). According to scholars, this strategy goes hand in hand with

international expansion strategies (Mazzoleni and Palmer 1992, 34). That is why it is closely

related to the following trend of internationalization. The fourth type of media concentration as

described by scholars is called diagonal or conglomerate concentration, and it stands “not only

for cross-media concentration but also for activities of an enterprise from another economic

sector outside the media industries taking certain control in media markets” (Meier and Trappel

1998, 42).

To sum up, all forms of media concentration are similar from the perspective that the

supply of media is dominated by a few rather than by many different owners (Doyle 2002, 13).

Therefore, the question of the impact of such big enterprises on competition arises. It can be

assumed that such big companies have huge economic power as well. That is why the PSB, with

its limited resources, faces some difficulties if it wants to compete successfully. In addition, there

is no common opinion as to whether the process of concentration has had good or bad

consequences overall. Therefore, this question will be discussed further.

To begin with, although “some empirical studies confirm that concentration contributes to

innovation and diversity, as long as the concentration does not become too high” (Van der Wurff

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2005, 255), the concern is expressed that concentration of ownership poses a threat to pluralism.

However, “mega media groups often succeed – through their staying power, economic muscle,

political connections and lobbying skills – in circumventing the legislative and regulatory barriers

placed in their path” (Mazzoleni and Palmer 1992, 29). As a consequence, according to

McChesney, “more and more power in the market is shifted from the consumer to the producer”

(McChesney, 2008, 422) and the participation of citizens suffers. In addition, a strong correlation

between concentration and advertising revenues can be observed (Motta and Polo 1997, 303).

This means that the more popular broadcasters get more money from advertising. As a result, if

the market is highly concentrated, almost all commercial income is collected by the biggest

participant in it.

Furthermore, high concentration in the market leads to several threats to the quality of

information (see Doyle 2002; Bagdikian 2004). “The main perceived danger, is that excessive

concentration of media ownership can lead to over representation of a certain political viewpoint,

or values or certain forms of cultural output at the expense of others” (Doyle 2002, 13).

Similarly, big and highly concentrated enterprises tend to use material they own or the one that

serves their economic purposes in order to have a ‘guaranteed audience’. However, according to

Bagdikian, the ‘guaranteed audience’ can become a ‘captive audience’, which has no choice in

media production (Bagdikian 2004, 5). Therefore, it can be assumed that a strong public service

broadcaster could be a balance in such a situation and warrant a plurality necessary for

democracy and social cohesion of the audience.

The second way to deal with the concentration is through laws, rules and regulations.

However, according to scholars, such actions have led to the breakthrough of internationalization

since media empires were forced to expand outside their national markets (Mazzoleni and Palmer

1992, 31). Therefore, the trend of television internationalization will be discussed in the

following sub-chapter.

2.3 Internationalization

The trend of internationalization will be analyzed in this chapter in order to determine its

influence on the work of the public service broadcaster. It is assumed that two types of

internationalization’s manifestation (international companies and internationalization of content)

21

are the most important for further analysis. Thus, they will be discussed in order to have a clear

theoretical framework.

To start with, although broadcasting systems across the world have historically developed

as national domestic affairs (Negrine and Papathanassopoulos 1991, 9), the rise and

establishment of international television companies could be observed in the late 1980s

(Mazzoleni and Palmer 1992, 37). Some scholars argue that “the globalization of the institutions

of television is an aspect of the dynamic logic of capitalism, which stems from the pursuit of

profit as the primary goal. This requires the constant production of new commodities and new

markets so that capitalism is inherently expansionist and dynamic” (Barker 1999, 45). Following

this, the trend of internationalization can be called a consequence of privatization and

concentration since private commercial companies accumulate their power in order to become

players of a global market (see McQuail, de Mateo and Tapper 1992; Barker 1999; McChesney

2001).

Another explanation of internationalization is the technological aspect – since such

developments as “the fiber-optic cable, satellite technology and digital switching technology have

opened up commercial possibilities that have led telecommunications to be hailed by the

corporation and state alike as the industry of the future” (Barker 1999, 47; see also Negrine and

Papathanassopoulos 1991, 9; McChesney 2001). In addition to this, although internationalization

is accompanied by the process of synergy, both of them would not be possible without

deregulation (Barker 1999, 47). Therefore, these processes warrant further explanations.

Synergy refers to the production of lower costs and higher profits (Barker 1999, 47). In

the television industry, it means that various elements of television and other media production

and distribution should be brought together in order to complement each other with lower input

and higher output. However, according to scholars, this process would not be possible without

the most visible sign of internationalization – regulatory activity at the supra-national level

(Negrine and Papathanassopoulos 1991, 11) as “‘new’ technologies required not only structural

change but also a liberal regulatory framework in order to guarantee commercial success”

(Negrine and Papathanassopoulos 1991, 14). As a result, according to Barker (1999), the mid-

1980s and early 1990s witnessed an important period of deregulation in European television. The

monopolistic outlook of governments towards television broadcasting changed and new

regulations were adopted both nationally and internationally. One of the most important

22

international regulation was called ‘Television without Frontiers’, which permitted free

circulation of television programmes across borders in 1989 (Hirsch and Petersen 1992, 42).

Internationalization suggests two phenomena, which are important in this study. Firstly,

the process took place on an institutional level (see Negrine and Papathanassopoulos 1991;

Barker 1999). This meant that international television channels owned by transnational

companies were created and supra-national regulations were adopted in the whole of Europe to

regulate them at the international level. Secondly, internationalization can be analyzed at the

content level, which in this case, refers to the trade of television programming and practice of co-

productions within boundaries of nation-states. Both aspects of internationalization will be

discussed in more detail in the following text.

To start with, new regulations in Europe in the 1990s allowed many dominant television

companies to maintain strong roots in nation-states and a significant presence in other national

markets (Mazzoleni and Palmer 1992, 26). These media groups then adopted an international or

global strategy of development and as a consequence, national PSB systems faced challenges of

growing competition – not only from national private television but from transnational channels

as well. “Those challenges influenced programme schedules, the mix and style of programme

production and, according to many, also the quality of the programmes, although this is more

difficult to define and measure” (Siune and Hultén 1998, 31). Therefore, the main task for public

service broadcasting became to preserve and strengthen regional and national culture (De Bens,

Kelly and Bakke 1992, 75).

The question of internationalization of content is important to discuss as well. According

to scholars, the European television industry was flooded with foreign production mainly from

the US (see Wildman and Siwek 1987; Waterman 1988; Barker 1999). There are several reasons

for this. First of all, the cost of production made at home was much higher than imported ones

(De Bens, Kelly and Bakke 1992, 76). Thus, it does not make sense to produce programmes

when the company is new in the market and does not have sufficient funds from advertising. In

addition, the market of European television has been highly diversified and that is why European

producers have faced difficulties to compete with American producers, who have huge English-

speaking markets and low costs of production. Therefore, according to scholars, it was natural

that more expensive programmes were produced for larger linguistic markets and then exported

to smaller markets (Wildman and Siwek 1987, 74).

23

Furthermore, “many European media owners were fascinated by America – the birth

place of the information and entertainment industry and the richest media market in the world”

(Mazzoleni and Palmer 1992, 27f). As a result “movies based on old television shows, television

programmes based on movies, books based on both” (Meehan 2007, 25) were produced, which

offered trans-industrial markets the hope of building a franchise that could span decades.

Although, “this may make good business sense, it produces much that is uninspired and dull”

(Meehan 2007, 26). However, it could be easily sold in the European market. On the other hand,

television can be said to be global in its nature since similar forms of narrative can be detectible

all over the world, for example, soap opera, news, sports, etc (Barker 1999, 54). Therefore, the

main indicators of internationalization of its content are “the standardization of programmes and

the degree to which programmes become shared between nations” (Negrine and

Papathanassopoulos 1991, 18).

Analyzing the outcomes of internationalization is significant. The most important

consequence is the shift from national regulation and policy-making to an international one since

“the older order was very much a separate preserve of each nation-state” (Siune and McQuail

1992, 191). As a result, the power of national governments was weakened as the more important

voice in transnational regulations belongs to European institutions. This is especially significant

for small states, which are more vulnerable to larger and richer neighbors. In addition, “they are

more likely to experience a loss of national and cultural autonomy and they are weaker voices in

the struggle to arrive at a European consensus on standards” (Siune and McQuail 1992, 191f).

Furthermore, the process of internationalization leads to the homogeneity of television since

different countries and different channels start to share programmes, standards, owners and

regulations (Negrine and Papathanassopoulos 1991, 11). Although, such programmes as news

and current affairs tend to be produced for domestic audiences, the real issue here is “the

proportion of other programming, which will either be imported or, at the other extreme, crafted

for the international marketplace” (Negrine and Papathanassopoulos 1991, 23).

Thus, all things considered, the three trends of changes discussed above lead to the most

important one – commercialization – which is closely related and overlapped with them.

Therefore, commercialization and its impact to the PSB in Europe will be discussed next.

24

2.4 Commercialization

The trend of commercialization will be analyzed in this sub-chapter in order to identify its

merits and drawbacks. In addition to this, the main characteristics of its influence to the content

of television programming will be described in order to see if these features can be detected in the

programming of PSB in Lithuania.

According to McQuail (1998), commercialization began together with the early press,

however, it did not have a negative connotation at that time. In contrast, it was associated with

‘depolitization’ and meant an end of direct relations between the media and political powers.

Though, in the late nineteenth and early twentieth centuries “commercialism became identified

with the pursuit of profit above all else and was associated with large-scale, low-cost, low-taste

production and distribution, especially aimed at the new industrial working class” (McQuail

1998, 108). Television then entered the media industry. However, neither the economic nor

political climate was favorable to its commercial development since television was considered to

have a great power on audiences. Therefore, it was safer to keep it under supervision of the

government.

Nevertheless, the trend of commercialization reached television and became widely

related to advertising and income received from advertisements. The first of its manifestation had

been observed in America where public broadcasting was quickly accompanied by private

television financed through advertising. The result was a struggling existence for the PSB. That is

why Western European countries assumed it as a bad practice and did not let in commercial

broadcasters to the television industry until the end of the 20th century when the market was

liberalized, deregulated and commercialized with a result of great competition (see Brants and

Siune 1992; Siune and McQuail 1992). In this way, the competition and struggle for limited

resources (income from consumers and advertisers) had become the central concepts of

commercialization (Siune and McQuail 1992, 194). Therefore, they will be analyzed in more

detail.

2.4.1 The Impact of Competition

To begin with, some scholars argue that “commercial competition requires commercial

responses, whatever current public service ideals have to say” (Hultén and Brants 1992, 118). In

25

addition, the conditions for competition leave no broadcaster unaffected (Hultén and Brants 1992,

121). Therefore, it is important to point out that license fee funds did not shield the PSB from

competition. In contrast, they had to compete with commercial televisions in respect to their

obligations, perform well and be cost-effective. That is why it can be concluded that the task of

public service broadcasting became even more complicated. In order to analyze the process of

competition better, Michael Porter introduces two perspectives of competition: direct competition

and extended competition (Hultén and Brants 1992, 119). The first one refers to a narrow

relationship between the companies in one market where organizations are already established

and involved in competition. The second perspective is more complex as it involves the analysis

of “new entrants, substitute products (such as satellite and cable television channels), suppliers,

customers and direct relationships between transnational competitors” (Hultén and Brants 1992,

119). The analysis can be divided into three phases: the entry phase, the battle phase and the

consolidation phase (Hultén and Brants 1992, 120), which helps to describe the changes in the

environment of the PSB.

The entry phase refers to the very beginning of the establishment of commercial

televisions and does not offer a real threat to the existence of the PSB. However, the real

competition begins in the battle phase when commercial broadcasters grow stronger and are able

to acquire strategic programmes or even outbid stars and personalities from public service

broadcasters. The costs of purchasable production increase in this phase as well. The last phase of

consolidation is called the maturity of the market since uncertainty is reduced by agreements

between television channels and the levels of production costs are normalized (Hultén and Brants

1992, 120f).

Although, according to Hultén and Brants (1992), the most common reaction to

competition is the extended time of broadcasting. The PSB has clear competitive disadvantages

in this situation – it is dependent on politically regulated resources and limited by the national

market. When private commercial conglomerates divide their costs in different countries, the

PSB has to organize its own way of sharing acquisition costs (Hultén and Brants 1992, 123). The

reorganized structure of the market forces public service broadcasters to know their audiences

better since there is a possibility of choice now and audience ratings’ services have been

introduced (Hultén and Brants 1992, 126). However, according to McChesney, although “it is

said that competition in the market forces media firms “to give the people what they want”, in

26

truth, competition in the market forces them to “give the people what they want in the range of

where they can make the most profits” (McChesney 2008, 421). He claims that “the market has

clear limitations in the area of media since the media system is not simply an economic category.

It is responsible for transmitting culture, journalism and politically relevant information”

(McChesney 2008, 421) and therefore, leaving everything for the control of the market can have

disastrous political and moral implications (McChesney 2008, 234).

2.4.2 The Impact of Advertising

Another significant characteristic of commercialization is advertising and competition for

income from it (Mazzoleni and Palmer 1992, 40). Although this source of money has been

strictly regulated in the monopolistic structure of the market (McQuail 1998, 110), McChesney

(2001) argues that commercialization as we know it could not exist without advertising since it is

“part of the bone marrow of corporate capitalism” (McChesney and Foster 2003, 1). “We are

rapidly moving to a whole new paradigm for media and commercialism, where traditional

borders are disintegrating and conventional standards are being replaced with something

significantly different. It is more than the balance of power shifting between media firms and

advertisers; it is about the marriage of editorial/entertainment and commercialism to such an

extent that they are becoming indistinguishable” (McChesney and Foster 2003, 7). So the

question arises: to what extent is the PSB influenced by growing advertising? While some

scholars argue that advertising should be banned on public service television in order to

concentrate on public service objectives instead of increasing its audience (Motta and Polo 1997,

323), others claim that “the changing business climate has gradually found its way into the public

service television sector because most public channels are now partly financed by advertising,

and earlier restrictions have often been eased” (Siune and Hultén 1998, 24). The admission of

advertising as a main source of finance for the PSB is no longer a controversial political issue

(McQuail 1998, 112).

Consequently, information has become a commodity, which can be produced and sold for

profit (see Schiller 1991; Mazzoleni and Palmer 1992). In this way, social information is

drowning in the sea of commercial messages where its content is blurred or even lost. And “the

process of commercialization has had a down-market effect on the overall TV programme supply.

27

Commercial channels as well as PSB stations are in search of high audience ratings. Television in

Europe thus becomes increasingly an entertainment medium” (De Bens, Kelly and Bakke 1992,

95). To illustrate this statement, several research projects have been conducted in different

countries of Europe (Germany, Great Britain, Italy, Spain, Holland, Belgium, Norway and

Finland) and all of them show that there is a pattern to move toward entertainment-like

programming. The concern that the amount of imported programming (especially from the US) is

growing has also been confirmed (Hellman and Sauri 1994, 48f) and it is significant to determine

the impact of commercialization on the PSB. According to scholars, there is no common picture

of the situation; however, some common patterns can be observed (Siune and Hultén 1998, 28).

2.4.3 Consequences of Commercialization

Already in the 1980s, McQuail discussed increasing evidence of commercialism within

public service broadcasting. He identified that the most popular programmes tended to be

broadcast at peak time in order to maximize audiences and advertising revenues. Cost-

consciousness and efficiency in the PSB’s activities increased and the signs of management

practices’ adaptation from the commercial sector could be seen (Bardoel and d’Haenens 2008,

340). As a result, public service broadcasting clearly found itself stuck between its obligation to

provide a full range of programming and the idea that the PSB should clearly differentiate itself

from commercial television with providing quality of the content (O’Hagan and Jennings 2003,

39). Nevertheless, “debate on public broadcasting, especially in Western Europe, repeatedly

claimed that as the competition got more fierce, thanks to dozens of new cable, satellite and other

commercial channels and video, the programme supply of national public service became more

commercial, entertaining or even transnational” (Hellman and Sauri 1994, 48).

Therefore, the hypothesis of convergence was created by scholars in order to explain the

‘phenomenon of going similar’. It says that “the competitors in the long run have no choice but to

implement strategies, which result in convergent programming, that under the pressure of

competition, forces public television stations to increase the entertainment content of their

programming at the expense of their duty to provide comprehensive informational coverage. By

the same token, commercial television stations would only retain their audiences if they enrich

their purely entertainment oriented programming with more information” (Pfetsch 1996, 434;

28

also see Hellman and Sauri 1994). Therefore, it can be concluded that the convergence means the

process, when programmes’ profiles, given by competitors, capture the optimum in terms of

audience preference and in turn, become more and more similar. Yet, according to long-range

German research, this hypothesis is not supported by empirical data. In contrast, the evidence

from Western Europe shows that a hypothesis of divergence is more likely to be supported (Siune

and Hultén 1998, 29). However, it does not mean that the PSB is not affected by competition.

The dilemma of programme quality versus popular reach is always present (Bardoel and

d’Haenens. 2008, 351). Although, public service broadcasters have learned to adapt in

commercial media markets where they have become more the exception rather than the rule, the

PSB still has problems in realizing sufficient public support. Moreover, as a result of fierce

competition they tend to abandon the domain of infotainment and reality programmes by leaving

it to the commercial side of the market, which according to some scholars, can potentially lead to

the strategy of defeat (Bardoel and d’Haenens. 2008, 344). Nevertheless, other scholars argue that

the PSB still can do ‘better’ in terms of cultural and informational content (McQuail, 1998, 120),

although the tradition of aiming at the whole population of the country by all programmes is gone

(Siune and Hultén 1998, 29).

The PSB experiences pressure from national political forces as they cut costs to these

institutions with the notion to save money and rationalize the public broadcasters’ work (Brants

and Siune 1992, 113). This forces PSB stations to adopt many of the strategies, which have

historically been associated with commercial television in order to save money, sustain

legitimacy and obtain high ratings (Syvertsen 2003, 159). However, it is still difficult to compete

with private television, which is controlled by the government minimally. Moreover, in order not

to lose their money, the PSB tends to give priority to politicians rather than to viewers (see

Hultén and Brants 1992; Bardoel and d’Haenens. 2008). As a consequence, viewers and their

interests could be ignored since they have no financial influence on the PSB. In this way,

“citizens are virtually excluded from having any say in public communication, because the

increasing preoccupation of politicians and journalists with their own complex and fraught

patterns of collusive conflict results in a public sphere inhabited by insiders, instead of citizens as

the traditional outsiders in political discourse and decision-making” (Brants 1998, 319).

As a consequence, the question of television’s role in democracy arises since public

service broadcasting is obliged to provide a number of functions for the political system.

29

According to Blumler (1992), that is why news, current affair and political programmes have

often been treated as the ones, which require protection. The PSB is further expected to “bear

some sense of responsibility for the health of the political process and for the quality of the public

discussion generated within it” (Brants 1998, 318). Public service organizations used to give free

quotas of airtime to politicians during election campaigns. However, in the time of wide

commercialization it is not a precedent anymore as well as extensive and substantive news

coverage of political issues (Blumler 1992, 12f). Thus, it it is important to keep a strong nonprofit

and noncommercial television sector, which can serve a variety of important needs to the public

as citizens rather than consumers. Following this, certain response strategies, which could be

employed by public service organizations in the face of competition and commercialization, will

be analyzed further.

To start with, Hultén and Brants argue that there are three strategies: adaptation,

purification and compensation (Hultén and Brants 1992, 117). Adaptation means that the PSB

tries to follow the same commercial logic as private televisions do and in this way abandons its

duty to serve the public interest. The second strategy – purification – is the extreme opposite and

it refers to the absolute rejection of competition. If the PSB employs this strategy, it concentrates

on such programming, which is completely uncommon to private televisions. The main goal then

is to serve the public interest by offering its audience programmes, which it cannot get on other

television stations. The strategy of compensation stands in the middle of the other two and

indicates the way when the PSB takes all the best characteristics of public broadcasting while

acting in the market driven by commercial forces (Hultén and Brants 1992, 118).

Although, public service broadcasters could use any one of these strategies, the

researchers concluded that no PSB had ever chosen the strategy of purification. Critics of public

service organizations claim that most of the channels chose the strategy of adaptation, where they

operate like commercial television stations in an effort to compete (Siune and Hultén 1998, 28). It

is clear, however, that the strategy of purification marginalizes the PSB. That is perhaps why it is

usually proposed by the opponents of public service organizations.

30

2.4.4 Influence on Diversity

Scholars and media practitioners have argued from different perspectives that fierce

competition and commercialization lead to trivialization of the content and a reduction in the

diversity, which is an important criterion for media performance (Van der Wurff 2005, 249f), and

a special requirement for public service broadcasting (Hellman 2001, 181). Therefore, this

concept and its implication to the mission of the PSB will be discussed in more detail.

As television is a universal medium, it serves the many different interests of diverse

audiences by providing different types of programmes. However, concerning the PSB, diversity

has been acknowledged as one of the ‘vulnerable values at stake’ jeopardized by market

pressures (Hellman 2001, 182). In addition to this, diversity is closely related to pluralism, which

is important in the idea of programmes being made available, rather than actually consumed

(Doyle 2002, 12), as through the diversity of programmes, society gets access to a range of

voices and content. It is important that diversity is “a normative criterion of quality and a

deliberately sought policy goal aiming at pluralism at several levels: in reflecting and giving

equal access to the various sectors of society, serving the multiplicity of audience types as well as

striving to achieve a wide range of choice in programme content” (Hellman 2001, 183).

Scholars argue that diversity of programmes is a necessary precondition for choice and

exchange of different ideas and opinions. It is irreplaceable for democratic decision making and

development (Van der Wurff 2005, 250). However, critics of the commercialization of

broadcasting claim that competing television stations spend too much time on such programmes

as entertainment, sports or the ones that portray sex, at the expense of serious information and

news as well as cultural programmes (Van der Wurff 2004, 216f). That is why the role of the

PSB remains important, since according to Hillve, even “single units of low diversity may make

significant contributions to the overall diversity of the system by providing a narrow range of

programmes not represented on other channels” (Hellman 2001, 185).

31

2.5 Summary

The industry of television is fundamentally different at the beginning of the 21st century in

comparison with its roots in the 20th century. According to Siune (1998), four main trends, which

define changes, can be observed starting from 1990. They are privatization, media concentration,

internationalization of the field and commercialization. As a consequence, “many new private

channels have been granted licenses to operate in a commercial mode” (Siune and Hultén 1998,

23f). Thus, monopolies collapsed and public service broadcasters were left to struggle for

existence under the conditions of market competition.

In the first sub-chapter called Privatization, the impact of this trend on the television

industry is identified. It is concluded that the television system in Europe changed from a

monopoly to a dual system as a consequence of privatization. Following this, the realization of

the PSB’s mission became complicated since the element of competition was introduced.

Furthermore, as private television stations sought profits and gave the audience what they

consumed the best, the PSB had to fulfill its obligations and therefore, it struggled for existence

under these market conditions. In addition to this, privatization became a premise to spread

American production in Europe as well as to commercialize the television industry. Thus, the

main differences between private and public broadcasters are the pattern of ownership, profit-

making and the level of accountability to citizens.

In the second sub-chapter called Concentration, the impact of concentration on the

performance of the PSB in the television industry is analyzed. It is concluded that the supply of

media is dominated by a few rather than by many different owners (Doyle 2002, 13). Therefore,

the question of impact from such big enterprises on competition arises as it is difficult to compete

when conglomerates have huge amounts of money and public service broadcasters have only

limited resources. As a consequence, the concern is expressed that the concentration of ownership

poses a threat to pluralism and to the quality of information. In addition to this, the relation of

concentration to other trends is determined in this section. It is assumed that concentration is

related to privatization and internationalization, since highly concentrated companies tend to

expand their activities outside the boundaries of nations.

In the third sub-chapter called Internationalization, it is concluded that the trend of

internationalization can be understood in two ways: as a process, which is closely related to the

32

deregulation of the market and gives the possibility for international companies to enter the

domestic market as well as a process, which is closely related to globalization and imported

television production. However, both of them have their consequences on the work of public

service broadcasting. Firstly, competition from both national and international television stations

is growing. Therefore, the main task for public service broadcasting becomes the preservation

and strengthening of regional and national culture (De Bens, Kelly and Bakke 1992, 75).

Secondly, the process of internationalization leads to the homogeneity of television since

different countries and different channels start to share programmes, standards, owners and

regulations. This leads to the third consequence, which refers to the shift from national regulation

and policy-making to international regulation. Finally, the European television industry was

flooded with foreign production mainly from the US.

In the fourth sub-chapter called Commercialization, the main characteristics, merits and

drawbacks of this trend are identified. The impact of competition on the PSB is analyzed, since

competition leaves no broadcaster unaffected and license fee funds are not adequate enough to

shield the PSB from it. In contrast, public service organizations have to compete with commercial

televisions in respect to their obligations. Furthermore, the impact of advertising is determined in

this sub-chapter concluding that the admission of advertising as a main source of financing for

the PSB is no longer a controversial political issue. In addition, the consequences of

commercialization on the performance of the PSB are described. It is determined that public

service televisions tend to employ a variety of strategies that have been historically attributed to

commercial broadcasters. Moreover, the PSB’s role as the vehicle for the promotion of

democratic values and national culture suffers more and more. Finally, the question of diversity

in television is analyzed with a conclusion that this feature is crucial for the performance of the

PSB.

33

3. The Application of Theoretical Assumptions to the Television Market in

Lithuania

Changes in the Lithuanian television industry had been analyzed from the 1990s when the

country regained its independence mostly by scholars such as Tapinas (1997), Balčytienė (2002;

2005; 2009), Lukošiūnas (1993; 2005), Meškauskaitė (2006), Juraitė (2009), Pečiulis (2005;

2007; 2010). However, the development of the media industry in Lithuania cannot be understood

or analyzed without the historical and political conditions, which make the country unique when

compared to the Western European context.

When other European countries were changing their television industries from

monopolies to multiple players in the market, the Lithuanian television industry was experiencing

a great transition from the politically-controlled media to a free one. According to scholars, this

experience was quite new for the youthful democratic country; therefore, it looked towards the

West for a model for media development (Balčytienė 2005, 40) and through trial and error, a

national public service broadcaster was created. However, problems caused by both the new

order and by specific problems of the post-communist state’s development continued to hamper

development (Pečiulis 2010b, 81). There were no traditions of public service broadcasting in

Lithuania. In addition, the changes in the television industry coincided with transformations in

political and public life and LTV did not really know its role.

Global trends are important to analyze in such a fundamentally volatile situation of a

young democratic country. Therefore, this chapter will be divided into five sub-chapters. The first

is devoted to the description of the methodology of empirical data collection. The other analysis

is divided into four sub-chapters following the logic of the theoretical framework of the previous

chapter. All theoretical assumptions, as described by the scholars, will be applied to the

Lithuanian television market in order to confirm the hypotheses raised in this study.

3.1 Methodology

The content of LTV programmes is analyzed using quantitative content analysis methods

and qualitative descriptive methods for data interpretation in the empirical part of the paper. The

number of different programmes of a certain programme type (News, Light entertainment, etc)

34

over one year on LTV for the period 1990-2009 is counted using the data from the press where

the schedule of the programmes is announced. The newspaper ‘Kalba Vilnius’ is used to count

programmes in 1990 and 1996. It is a single-purpose newspaper, which deals with issues of radio

and television broadcasting. It was published during the period of 1956-1999. The second

newspaper that is used to count programmes of LTV in 2001 and 2009 is called ‘TV antena’. It is

the Saturday supplement of the main Lithuanian newspaper Lietuvos rytas. ‘TV antena’ is

designed for television programmes and it started publishing in 1997. The newspapers are

collected from Martynas Mažvydas National Library of Lithuania. The programmes are separated

into different categories throughout the year (from 1st of January to 31st of December – 52

weeks). All different titles are taken into account since according to Hellman, “the choice of

media content, measured as the variety of different programme types, is widely accepted as a

relevant measure of diversity. In addition, scholars consider that ‘programme types’ are

meaningful categories of diversity analysis. They assume that each broadcast can be assigned to

one or another designed content category and that all broadcasts belonging to a given type are

substitutes” (Hellman 2001, 184).

All the programmes are divided into sub-groups:

News

Current affairs

Features and documentaries

Educational programmes

Practical and advisory

TV plays and movies

Series and serials

Light entertainment (include TV shows)

Music and concerts

Sports (sports news excluded)

Children’s programmes

Religious programmes

Programmes for minorities These categories of television programming are based on the Raymond Williams’

partition, which divides television programmes into two main types (A and B) where type A

(News and Public affairs, Features and documentaries, Education, Arts and music, Children’s

programmes) refers to public service broadcasting and type B (Drama series and serials, movies,

35

general entertainment) refers to commercial broadcasting (Williams 1990 2nd ed., 76f). However,

Hellman and Sauri adapted this typology of programmes to contemporary television and added

categories of Practical and advisory, Sports, Music and concerts, Religious programmes and

Programmes for minorities (Hellman and Sauri 1994, 56). Recent typology is used in this paper

since it is considered appropriate for the analysis of all programmes.

A television programme is considered to be News in this paper if it coincides with the

general concept of News programming. Programmes are put into the category of Current affairs

if they analyze current issues of politics, economics or social affairs. Programmes are classified

as Light entertainment if they are talk shows, TV games or lotteries. In addition, broadcasted

units are counted in the analysis of data. It means that the number of different programmes, but

not the time devoted for each unit of the programme, is important here. This methodology is

relevant in order to bring all programmes under different categories.

Statistical data of LTV programming will help to test all hypotheses. The first (the

number of news and current affairs programmes on LTV has continuously decreased in the years

1990-2009) and the second (the number of entertainment programming on LTV has continuously

increased in the years 1990-2009) hypotheses will be checked by comparing the amount of

particular programmes in different years. The third hypothesis (the amount of advertising on LTV

has increased in the years 2001-2009) will be verified by comparing commercial income from

different years. This data will be collected from the reports of the Council of Lithuanian Radio

and Television. However, the period analyzed is different from other hypotheses (2001-2009) as

there is no data available from the earlier years. The fourth hypothesis (the quantity of imported

TV production has increased on LTV in the years 1990-2009) will be proved or disproved by

comparing the number of homemade and imported productions in different years.

The fifth hypothesis (the diversity of programming has decreased on LTV in the years

1990-2009) will be tested by employing Shannon’s H tool in order to analyze if the diversity of

public service broadcaster programming has increased or decreased. Such formula will be used H

= − ∑ pi ln pi, where pi is the proportion in the ith category (McDonald and Dimmick 2003, 61).

This tool is assumed to be the best for this research as, according to McDonald and Dimmick, “if

the researcher uses Shannon’s H for the diversity measure, variation in diversity can be

partitioned readily so that the contribution of each variable to the population diversity can be

estimated […] In addition, Shannon’s H may have a more balanced sensitivity to the number of

36

categories and the maximum proportions among categories when sample sizes are very small

(less than 10)” (McDonald and Dimmick 2003, 76).

The years that are chosen to compare are:

1990 – Lithuania regained its independence in this year and the State television (used for

propaganda) was reformed to a public service broadcaster. This represents the very beginning of

independent television in Lithuania;

1996 – The Law on the Provision of Information to the Public and the Law on the National Radio

and Television were adopted for the first time in independent Lithuania and the process of PSB

formation was finished;

2001 – The market of television broadcasting stabilized and commercial broadcasters became

profitable for the first time since their introduction;

2009 – The most recent year where data to determine the tendencies of the public service

broadcaster’s response to growing commercialization is available. The year 2010 cannot be

included in the analysis as the economical data of the PSB for this year will be announced in the

middle of 2011.

The data collected in this research is interpreted using qualitative descriptive methods,

when the results are analyzed in the context of political and social situation of Lithuania. The

author examines what has affected the content of programmes on LTV: the processes associated

with commercialization or other factors, which are more connected to particular historical context

of the country.

Furthermore, the level of concentration of the Lithuanian television market is counted in

the study by employing the concentration ratio. According to Meier and Trappel, the

concentration is said to be high when one company reaches a market share of 30-35% or when

two or three companies reach a market share of 50% and more or when four or five companies

reach a market share of 60% or more (Meier and Trappel 1998, 50).

3.1.1 Limitations of the Empirical Research

The counting of different titles of television programmes can help to determine the changes

in the programmes’ diversity. However, it does not reflect the changes in the length of those

programmes and commercialization may result in less time devoted for merit programming. In

37

addition, programmes’ diversity can be analyzed from three perspectives: media structure, media

content and media audience (McQuail 1992, 155-81). However, this study concentrates on

diversity of media content or vertical diversity (see Litman 1979; Grant 1994) since the main

issue here is the impact of commercialization on the public service broadcaster’s programming

and it is considered that this perspective can reflect this impact in various years. Moreover, it is

out of the scope of the study to examine all three perspectives.

The author is aware of the presence of the subjectivity factor in the process, when all

programmes of LTV are divided into different categories. However, the author lived in Lithuania

during the period analyzed in this study and was familiar with the content of the programmes of

the public service broadcaster. That is why it is assumed that the research is as much objective as

it is possible. In addition, the programmes are put into the categories according to their main

genre or subject. For example, if the programme is movie it is put into the TV plays and movies

category despite the fact that it may have political content. It is considered that the main purpose

of the programme is important but not the additional aspects that it may contain. Otherwise, it

would be impossible to divide all programmes into different categories.

Furthermore, the method of concentration ratio for measuring concentration in the

television market does not weigh each channel’s share by itself and reflects only the larger firms

in the industry. In addition, it ignores smaller firms and does not incorporate each of them

separately and differently. A better tool for measuring concentration in this situation would be the

Herfindahl index. However, it requires all firms’ market shares (Weinstock 1982, 286), which is

impossible to know in the Lithuanian context. There is a section in statistics, which refers to

“Other channels” and includes about 300 cable, digital, IPTV etc television channels. In this way,

the whole share of “Other channels” composes 20.2% and shows a great loss if the Herfindahl

index is counted without it. As a result, the Herfindahl index cannot be used to count

concentration in the Lithuanian television market.

3.2 Privatization

The impact of the trend of privatization on the public service broadcaster of Lithuania will

be analyzed in this sub-chapter. In addition, the picture of ownership of the television industry in

38

Lithuania and its regulation will be drawn in order to have a full picture of the context in which

the PSB is operating.

Privatization in the Baltic countries had its own peculiarities. It began with the press,

which was mostly privatized by its own workers. Such privatization was called “‘spontaneous

privatization’, ‘closed privatization’ or a ‘privatization from within’” by the scholars (Balčytienė

2009b, 42). However, the process took much more time in the audiovisual sector as it required

much more money and judicial regulation (Meškauskaitė 2006, 17). In addition, there were some

scholars who argued that private ownership would not guarantee the political independence of the

media (Lukošiūnas and Bartasevičius 1993, 261). Nevertheless, “the authoritarian concept of

media-state relationship was gradually replaced by the concept of a completely free media”

(Balčytienė 2002, 110). In this way, not only private ownership but also a fundamentally

different Lithuanian Radio and Television were created. However, scholars tend to call this time

‘a period of the shadow economy’ since the search for rapid gain, cooperative movement and

liberal experimentation had become the prior goals (Balčytienė 2002, 105).

Furthermore, the newly established public service broadcaster received preferential rights

to make use of the transmission equipment. Later, tenders for leasing radio and television

programmes’ broadcasting equipment to private editorial offices started to be organized.

However, the LTV Board had the right to approve or disapprove the results of such tenders

(Radijas ir televizija Lietuvoje 2000, 5). That is why it can be assumed that the PSB still had an

exceptional position in the television market and the right to determine the possibility of any

private broadcasters’ existence.

Nevertheless, the process of media capitalization began and the first commercial

broadcaster in Lithuania was introduced in 1992 (Tele-3 then and TV3 now). Two more national

terrestrial commercial television companies followed in 1993 (BTV) and 1995 (LNK). Tele-3

was founded by American-Lithuanian Liucija Baškauskaitė and started its broadcasting in 1993.

However, it went bankrupt in 1996 and was immediately bought by Kinnevik (Sweden) through

its media holding Modern Times Group (MTG) (Lukošiūnas 2005, 1055). The name of the

channel was changed to TV3 and it was transformed to resemble other television channels with

the same name owned by MTG. Furthermore, American-Lithuanian Kęstutis Makaitis established

the second private national channel called BTV in 1993. In 2002 it was sold to the Polish

broadcaster Polsat and its name was changed to TV4. BTV became a Lithuanian television

39

channel again in 2004 when it was bought by Achema, a large Lithuanian industrial group, whose

Chair is the President of the Lithuanian Industrialists’ Confederation. The third national

terrestrial commercial broadcaster LNK was introduced in 1995 by Lithuanian Romas Bubnelis.

“Ownership of the station changed a number of times, and in late 2003 it was purchased from

Swedish Bonnier entertainment by a local food, real estate and trading company, MG Baltic

Investment” (Lukošiūnas 2005, 1055). To sum up, currently four national channels operate in the

Lithuanian television market: the public service broadcaster, two commercial television stations

owned by Lithuanian capital and one commercial channel controlled by Swedish MTG. In

addition to this, there are 28 local television stations and 54 cable television channels (LRTK

ataskaita 2009, 24).

Judicial regulation had a major impact on the sector. The Law on Press and Other Mass

Media regulated all mass media between the years 1990 and 1996. According to scholars, the law

was quite progressive as it was adopted during the years of revival (Meškauskaitė 2006, 18).

However, it was necessary to change it when the country became independent again. The most

important characteristic of the new regulation was the strong resistance to direct State regulation

since the memories of the Communist past and strict control were still alive (see Lukošiūnas

2005; Balčytienė 2009b). The Law on the Provision of Information to the Public was adopted in

1996 and was declared to be the most liberal media law in Europe by foreign experts (Balčytienė

2009b, 43).

According to this law, state regulation was implemented by two institutions: the

Lithuanian Radio and Television Commission, which regulates the activities of all radio and

television broadcasters and re-broadcasters, and the Council of Lithuanian Radio and Television,

which regulates only the public service broadcaster (The Law on the Provision of Information to

the Public 2010). In addition to this, all radio and television stations (except the PSB) require a

license to broadcast in Lithuania. According to scholars, there was a great manifestation of

commercial broadcasters’ lobbying when preparing this law (Meškauskaitė 2006, 19). It might be

the reason why there are no restrictions on ownership of broadcasters by foreign companies,

except that such ownership must be through a legal entity established in Lithuania. Television

stations cannot be owned by political parties or organizations, state institutions, municipalities or

banks (The Law on the Provision of Information to the Public 1996, article 22). Furthermore, in

40

order to define a specific legal framework for the PSB, the Law on National Radio and Television

was adopted in 1996.

When the question arose concerning the reaction of the public service broadcaster to the

changes in the market, the scholars all agreed – it was done with a lot of mistakes (see Balčytienė

2005; Lukošiūnas 2005). Although, the National Broadcaster had declared its new mission, goals

and its concept of programming, its structure remained unchanged for a decade (until 2000).

Also, the real competition from commercial broadcasters did not start until 1996. The PSB’s

station, LTV, was so conservative in adopting changes that the newly developing commercial

stations had more than enough time “to take full advantage of the opportunity to conquer their

audience share” (Balčytienė 2005, 47). In this way, the public service broadcaster fell into deep

financial difficulties since it was partly financed by the subsidies of the state, which were

gradually decreasing and finally turned out to be insufficient even for salaries and technical

equipment’s maintenance.

3.3 Concentration

The implication of the trend of concentration in the Lithuanian television market will be

discussed in this sub-chapter in order to determine its influence on the work of the public service

broadcaster of Lithuania.

Lithuania is obviously a small country with a current population of about 2,9 million

people. The Lithuanian language is the main language, common to more than 80% of the

population, thus products or television channels in other languages usually cannot compete

successfully. According to Balčytienė (2009), this may be one of the reasons why the media

market became more and more concentrated even in such a small country. Yet, the tendency of

the television channels’ multiplication could be observed in Lithuania in the early 2000s when

three out of four national terrestrial television stations launched second channels. In this way, a

business strategy, which had been used in the press earlier, was applied to the television market

in order to cover the needs of the different audience segments by offering them different channels

(Balčytienė and Lauk 2005, 99).

It is also important to analyze judicial regulation and laws, which set limitations on

concentration in the television market as some scholars have mentioned (see 2.2 concentration),

41

concentration only became possible due to deregulation. Thus, the main principles of public

intercourse were determined in the Constitution of Lithuania in 1992. It established the principle

that nobody can monopolize the mass media or any part of it (Meškauskaitė 2006, 17). However,

there are no specific restrictions in the laws regarding concentration in the media or the television

market. The only law that regulates this area is the Law on Competition, which defines the

dominant position in the market as ‘if the company occupies more than a 40% share of the

market’ (Law on Competition 2009). Though, there has been no precedent in the history of

independent Lithuania of any broadcaster approaching a 40% share of audience.

Furthermore, there is no regulation of cross-media concentration although it is

characteristic to the television market of Lithuania. First of all, the second largest national

commercial broadcaster, LNK, has been purchased by MG Baltic, which also controls companies

in alcohol, soft drinks, clothes and real estate sectors. Moreover, it owns a news webpage and

magazines publishing company. The second case of Lithuanian capital cross-media ownership is

the national television channel BTV, which was bought by the large industrial company Achemos

Grupė, which controls about 50 companies in sectors of production, trade, construction, hotels

and finance. This conglomerate also owns 2 newspapers, 5 radio stations and a publishing house.

Thus, the concentration of the television market can be calculated by employing the

concentration ratio. According to audience research in 2009 (see Table 1), the biggest four

television companies are TV3 – 23.5%, LNK – 20.7%, LTV – 12.8%, BTV – 8.1%. Therefore,

the concentration ratio (C4) refers to 65.1% and according to Meier and Trappel (1998) this is

considered to be high. That is why it can be claimed that the PSB faces some difficulties if it

wants to compete successfully. Three of its main competitors are controlled by large

conglomerates, which are able to divide their broadcasting and production expenses in other

markets while LTV does not have such a possibility. In addition, its market share is almost twice

lower when compared with the leader of the market, TV3.

Table 1. The ownership and the audience share of television channels

Channel Ownership Share TV3 MTG 23.5% TV6 MTG 2.3% LNK MG Baltic 20.7% TV1 MG Baltic 2%

42

LTV Public broadcaster 12.8% LTV2 Public broadcaster 0.9% BTV Achema group 8.1% Lietuvos rytas.tv Lietuvos rytas 2% PBK 5.3% Video and video games 2.1% MTV Lietuva 0.3% Other channels 20.2%

Source: TNS 2009.

When the picture of the situation concerning concentration in the television market of

Lithuania is drawn, it is important to discuss its merits and drawbacks. It is difficult to find any

kind of conclusions in the works of the Lithuanian scholars except for the concern about cross-

media concentration, which might require regulation and the assumption that concentration in a

small country is not necessarily a bad process as it may give a possibility to improve media

products (Balčytienė 2009, 22).

On the one hand, it could be argued that privatization, concentration and growing

competition, which follows the two first, have had some positive after-effects on the PSB since it

has been forced to change. As it is discussed later in the text, LTV has been quite stubborn and

immovably conservative after the long period of monopoly. It did not fully realize how the

situation had changed and did not offer anything that could respond to the changing viewers’

requests so the audience eventually shifted to commercial broadcasters, leaving the PSB on the

verge of bankruptcy. Following this, it was constrained to look for new ways of programming

and recognizing the viewer in order to keep or try to recover the audience. All those changes had

been made during the last 15 years. However, the research showed (see 2.4.4 influence to

diversity) that the PSB managed to maintain the diversity of its programming and resume part of

its audience (2001 – 7%, 2009 – 12.8%) (LRT report 2001; 2009).

On the other hand, huge conglomerates have more financial possibilities. They can buy

more programmes from local producers that attract more audience. The data shows that 6 out of

the 10 most popular programmes in the Lithuanian television market were produced by local

producers in 2009 (TNS 2009). The most popular programme, the Eurovision song contest, was

broadcast by LTV, since the PSB had exceptional rights to broadcast it. Besides this one, no other

programmes from the public service broadcaster attracted as much audience and outrivaled the

43

commercial broadcasters’ production. An additional issue to bear in mind is that the most popular

programmes on commercial televisions are based on the international formats.

3.4 Internationalization

The impact of the trend of internationalization on the Lithuanian television market and the

public service broadcaster will be analyzed in this sub-chapter. The trend will be examined from

two perspectives: the institutional level and the content level.

Taking into account that there are no restrictions on foreign investment in the national,

regional or local media in Lithuania (see 2.1 privatization) and that the Baltic countries do not

share a language with their larger neighbors Poland and Russia, it is easy to see that media

regulation is not protectionist. According to Balčytienė (2009b), foreign ownership is even

encouraged; especially favoring investors from the neighboring Scandinavian countries (the

situation with Russian capital would be very different). Nevertheless, national ownership

dominates the television market in Lithuania since international investors control the only one

television station (TV3 by MTG). This index is the lowest in the Baltic countries. Balčytienė

argues that “linguistic barriers, the geographic location and limited advertising possibilities have

preserved the Baltic countries as closed systems in terms of global competition” (Balčytienė

2009b, 42). However, despite this fact, according to her, small countries and societies are

especially vulnerable when international companies are only concerned with profits and do not

really care about issues of social responsibility (Balčytienė and Lauk 2005, 101).

The impact of internationalization on the content of programming is significant here since

small countries usually lack resources to support original content’s production and the easiest

way to fulfill the gap in the programming schedule is to import production from abroad. That is

why the threat of a bigger influence of commercialization appears (Balčytienė and Juraitė 2009,

34). As it can be seen from the data collected (see Chart 1), the amount of programmes made in

Lithuania was decreasing during the period of 1990-2009. The evidence suggests that the trend of

internationalization has significantly affected the content of the public service broadcaster in the

period of independence. The amount of programmes made at home declined from 84.8% to

52.1%. In addition to this, the number of imported programmes increased from 15.2% in 1990 to

44

47.9% in 2009. Therefore, it can be argued that the public service broadcaster prefers imported

production more than the Lithuanian one.

Chart 1

Imported production on LTV in various years

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Other 0,90% 2,30% 2,80% 4,10%

America 0,60% 8,50% 2,60% 18,80%

Europe 13,70% 13,20% 32,70% 25,00%

Lithuania 84,80% 76% 61,90% 52,10%

1990 1996 2001 2009

Source: data collected by the author from ‘Kalba Vilnius’ and ‘TV antena’

Furthermore, the amount of production made in Europe has doubled during the period that

is analyzed here. This can be explained by the laws, which define that television broadcasters

must give preference to programmes broadcast in official European Union languages (Law on

Provision of Information to the Public 2010, article 34). In addition, in line with the requirements

of the Television without Frontiers Directive, all broadcasters in Lithuania must reserve at least

50% of their programme time (excluding the time appointed to news, sports events, games,

advertising, teletext services and teleshopping) for European works. Moreover, at least 10% of

programming must be reserved for European works produced by independent producers within

the last five years (Lukošiūnas 2005, 1052). As the data collected by the Lithuanian Radio and

Television Commission shows (see Chart 2), the public service broadcaster realized these

regulations successfully: 2005 – 71%, 2006 – 59%, 2008 – 66%, 2009 – 81%. The amount of

programmes created by independent producers within the last five years in the PSB programmes’

45

schedule is also appropriate: 2005 – 44%, 2006 – 27%, 2008 – 79% (LRTK ataskaita 2006;

2009).

Chart 2

Share of European productions on Lithuanian television

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

LTV 64% 71,20% 58,90% 66% 81%

TV3 45% 48,70% 36% 47% 45%

LNK 38% 41% 42% 35% 36%

BTV 52% 53% 51% 57% 53%

2002 2005 2006 2008 2009

Source: Lithuanian Radio and Television Commission 2002; 2006; 2009.

The internationalization of the content of the PSB can be measured by analyzing the

international formats of programmes, which it adopted in comparison with commercial

televisions. According to scholars, a television format refers to “a programme or programme

concept, with distinct elements that can be exported and licensed to production companies or

broadcasters outside its country of origin for local adaptation” (Altmeppen, Lantzsch and Will

2007, 95). That is why it can be argued that the content of television programming is

standardized and homogenized internationally by adopting the same formats around the world.

The only difference of such programmes is the language, which still maintains cultural

distinctiveness and national identity (Waisbord 2004, 372).

The data shows (see Table 2) that among the 5 most popular television programmes in

Lithuania in 2009, there were 3 entertainment shows based on international formats and

46

broadcast by commercial channels (a talent show, a dance show and a song show). LTV

programmes based on international formats did not enter the list of the 40 most popular

programmes (TNS 2009b) although it broadcast a “more sophisticated” version of songs contest

“Triumfo arka”. In this show, participants were mainly the students of the Academia of Music

and Theater and they sang arias from operas. Professionals in this area and tele-voters rated them.

Although the show ran for three seasons, it never reached the TOP5 even in the PSB’s list (TNS

2009b). In comparison, similar projects where singers sang pop songs were very popular in

commercial televisions. For example, “Žvaigždžių duetai” (“Duet of the Stars” LNK) was the

fifth out of the 40 most popular programmes in Lithuania in 2009 (TNS 2009b).

Table 2. The 5 most popular programmes on Lithuanian television

Programme TV channel Share 1. Eurovision song contest. The final LTV 23.9% 2. Lithuanian talents. The final TV3 22.1% 3. Dance with me. The final TV3 20.8% 4. Eurovision song contest. The second semi final LTV 20.5% 5. Duet of the Stars. The final LNK 19.1%

Source: TNS 2009.

According to scholars, the success of international formats in television suggests two

ideas. Firstly, programmes based on formats represent the global commercialization as efficient

and predictable programmes can be adjusted according to local tastes. Secondly, “the global

television industry is becoming a giant cultural vacuum cleaner that constantly sucks in ideas

from around the world and turns them into commodities” (Waisbord 2004, 378). To sum up, the

conclusion drawn is that the public service broadcaster of Lithuania has been significantly

affected by the trend of internationalization. First of all, it faces competition from international

television channels and in addition, its content becomes more and more international and based

on foreign-made production making it more similar and homogenous with other television

channels that operate in the world.

47

3.5 Commercialization

The trend of commercialization and its impact to the public service broadcaster of

Lithuania as described by scholars will be analyzed in this sub-chapter in order to answer the

main research question and to test the hypothesis.

It is significant to point out that according to some research, the same features are

characteristic to the Lithuanian television market as to other small countries’ markets. There is

lack of resources (both of capital and of knowledge) and the audience and advertising market are

small (that is why production does not always pay dividends and it is very difficult to sell it

abroad). Moreover, a small country has to correspond to the global environment of the market;

however, it can hardly affect it. The regulation is more reactionary than calculated in the country

and that is why the market is more sensitive to exterior changes and the supply of international

products (Balčytienė 2009, 45). As a consequence, such a liberal market model has been one of

the main reasons why there is such a high degree of commercialization in the Lithuanian

television market (Balčytienė and Lauk 2005, 102).

Scholars argue that the development of the Lithuanian television industry can be divided

into several periods (see Balčytienė 2002; Lukošiūnas 2005). The first period started in 1990

when Lithuania regained its independence and the State Television Company was changed to a

public service broadcaster (LTV). This period ended in 1996 with the adoption of the Law on the

Provision of Information to the Public and the Law on the National Radio and Television

(Lukošiūnas 2005, 1041). The second period started in 1996 and lasted until 2001 when the

television market stabilized and commercial broadcasting became profitable (Balčytienė 2002,

118). This time can be called the rise of commercial television and the fall of public service

broadcasting since in the mid-1990s “there was a shift of the audience’s attention towards the

commercial broadcaster” (Balčytienė 2005, 46) and LTV went from being the most watched

television station to the least watched. The last period analyzed in this paper began in 2001 and

lasted until 2009 when the public service broadcaster of Lithuania partly recovered its position in

the television market. Following this logic, the sub-chapter of commercialization will be divided

into three parts according to the periods. In addition, the impact of competition, advertising and

the dilemma of quality versus popularity will be discussed.

48

3.5.1 The First Period: 1990-1996

According to scholars, during the time of the television monopoly, some kind of cultural

ghetto was created in it. It was considered that the culture in television had to be protected from

the pressure of the market and popular culture (Pečiulis 2007, 119). It seemed logical to continue

this tradition in an independent Lithuania as well. However, television was blamed for ‘the

trivialization of the content’ as early as the end of 1990 (Šiaulys 1999, 90). In addition to this,

some scholars argue that “Lithuanian state television hardly had a chance to become a source of

information due to its status, history, reputation and lack of competition from the private sector”

(Lukošiūnas and Bartasevičius 1993, 259).

However, during this period the content of television programming changed rapidly.

More foreign media products appeared on the TV screens. According to some studies, “changes

in television programming indicated the “Westernization” of society: not only more popular films

and entertainment programmes were shown, but the first signs of rivalry between national

television and commercial stations were observed as early as 1993” (Balčytienė 2002, 104).

Although competition was one of the reasons why commercialization reached the television

market in Lithuania, it still persisted in the entry phase (see Hultén and Brants 1992) and did not

offer a real threat to the existence of the PSB. Commercial broadcasters were still weak and by

the end of this period one of them (TV3) went bankrupt.

When the question comes to the programming of the public service broadcaster in this

period, it is important to say that the most prominent way of thinking about television reporting

was that journalists had to support, but not report (Lukošiūnas and Bartasevičius 1993, 261). In

this way, television was used as a tool for political objectives in a similar way as in the years of

the Soviet Union. Journalists did not have the right to criticize state institutions due to the fluid

political situation. In addition, according to Lukošiūnas and Bartasevičius (1993), the society was

not ready for critical thinking; it just followed the political orientation offered by the media.

Nevertheless, questions about previously restricted topics started to be raised in television

as a result of the public debate about Soviet deportations and national identity (Balčytienė 2002,

105). About 30% of the programming content was political and the PSB started to lose its

audience (Tapinas 1997, 75). It was then decided to reduce political programming to 12-14% and

ban political parties or movements from having their own autonomous broadcasts (see Tapinas

49

1997; Pečiulis 2010). Politics in broadcasting was replaced by information, culture, movies and

entertainment (Tapinas 1997, 75). However, it cannot be assumed that such a situation developed

due to the impact of commercialization. On the contrary, it was a desperate effort to reduce the

political impact, which was considered to be harmful due to the historical and political context of

the country. In this way, the support of the PSB’s development and protection of content

diversity was postponed (Balčytienė 2009, 47).

After these attempts to depoliticize television, the public service broadcaster was blamed

for losing its values since an entertainment editorial office was established instead of a youth’s

programme office (Šiaulys 1999, 93). However, 51 new programmes appeared in the

programming of the PSB in 1993 (Tapinas 1997, 76). New popular movies were bought in order

to attract more viewers and more advertising. Such commercialization was explained by the

viewers’ desire for more Lithuanian movies and plays, which could not be created without money

from advertising. This strategy was successful since income received from advertising grew

steadily. 0.09 million of Euros were earned from advertising in 1992, 1.1 million in 1993 and

5.71 million in 1994 (Tapinas 1997, 78).

3.5.2 The Second Period: 1996-2001

During this period, there was a sharp fall in the public service broadcaster’s ratings

(Šiaulys 1999, 128) from the first position to fourth and income from advertising decreased as

well. In addition, the economy of the country experienced a serious downturn associated with the

Russian monetary crisis at the end of 1998, made worse by Lithuania’s close trading relationship

with Russia (Balčytienė 2002, 111). As a consequence, the government’s subsidies to the public

service broadcaster were lowered as well (LRT report 2001).

On the other hand, the rise of commercial broadcasters could be observed at this time.

Tele-3 was bought by MTG and LNK started to strengthen its position. These two broadcasters

became the main competitors and the leaders of the television market. As a consequence, real

commercialization, with all its merits and drawbacks, settled over the television industry.

Scholars claim that the process of commercialization is important in achieving the goal of

building a really democratic state since it brings new components to the market, such as “open-

market forces and new forms of ownership, which indicate that the media is shaped by new

50

factors rather than by the dependence on the political regime [and] that is an important

prerequisite of democratization” (Balčytienė 2002, 116).

When questions came to the programming of the PSB, critics were active. They claimed

that the image of a politicized public service broadcaster was destroyed; however, at the same

time, television that could develop a national culture was not created (Šiaulys 1999, 106).

Besides, the schedule of programming was criticized since one programme of news was shown

too late (23:30), another was shown too early (18:30). The third one (20:30) simply repeated all

the news shown at 18:30 (Šiaulys 1999, 118f). Moreover, some analytical, debate and

educational programmes, which had been shown before, did not get into the programming

schedule anymore. Instead, 10 new TV games and lotteries were broadcast (Šiaulys 1999, 120).

However, other scholars claimed that the structure of LTV programming corresponded with

many other European public service broadcasters’ models and therefore, Lithuania was doing it

the right way (Buzanas and Štikelis 1997, 45).

The competition reached a battle phase when commercial broadcasters grew stronger and

were able to acquire strategic programmes from the public service broadcaster. In addition, the

costs of purchasable production increased and LTV fell into deep trouble since its financing had

been decreasing (LRT report 2001). In addition, new laws started to regulate the amount of

advertising. It was forbidden to broadcast advertising for more than 12 minutes per hour or 15%

per day (Law on the Provision of the Information to the Public 2010, article 39). Furthermore, the

public service broadcaster could not insert commercials during religious, news, children’s

programmes or documentaries if they were not longer than 30 minutes (Law on the National

Radio and Television 2010, article 6). However, “various commentators agree that the media

transformation in Lithuania culminated around the year 2000, when the first signs of its

resemblance to Western media were manifested” (Balčytienė 2005, 170).

3.5.3 The Third Period: 2001-2009

The last period in the Lithuanian television history is dated from 2001 to nowadays and it

marks the partial recovery of the public service broadcaster and an even stronger establishment of

commercial television’s power. According to Balčytienė (2002), it is the period of stabilization,

when a limited number of the biggest media companies compete for the audience’s attention.

51

However, such competition still persisted in the battle phase since the maturity of the market was

not reached and uncertainty was not reduced by agreements between television channels.

When it comes to the situation of LTV in such a context, it is important to mention that its

recovery started in 2001–2002 when the company adopted a new market-oriented production

system, rescheduled debts, cut costs and invested in programming (Lukošiūnas 2005, 1027f).

However, the public service broadcaster faced a new challenge at that point. It “found itself

caught between the objectives of boosting its ratings and providing high-quality programmes that

are not oriented towards a mass audience” (Lukošiūnas 2005, 1047f). In conclusion, according to

scholars, it seems that LTV chose the strategy of programming, which appeared to be in the

middle of these two objectives (Lukošiūnas 2005, 1047f) and can be called ‘compensation’ (see

2.4.3 consequences of commercialization). As a result, at present LTV ranks third place in terms

of audience share.

On the other hand, there are scholars who argue that “the existing differences between the

output of the PSB and commercial stations are minor. News, information programmes, education,

culture and religion account for 27% on the PSB, and 21% on commercial channels.

Entertainment programmes, including movies and soaps, music, sports and others, have been

dominating in general output with 61% of the programmes on the PSB and 58% on commercial

broadcasters” (Balčytienė and Juraitė 2009, 39). Therefore, it can be assumed that the process of

commercialization has affected programming of the PSB in a way that it becomes more and more

similar to commercial channels. However, there is too little evidence to claim that the hypothesis

of convergence can be proved in Lithuania.

In addition to this, according to scholars, the liberal regulation of the television market in

Lithuania does not support the development of quality journalism (Balčytienė and Juraitė 2009,

34). As a result, media accountability, professional autonomy and resources distributed to

perform investigative or analytical journalism suffer. That is why the question of the public

service broadcaster’s role in political communication is important to discuss. Long-term research

shows that the most important reason why citizens in Lithuania become more and more passive is

the weakness of the political parties (Balčytienė 2009, 48). Citizens cannot identify themselves

with any strong political power and do not vote. Therefore, it can be assumed that the public

service broadcaster cannot be blamed for the lack of political information or encouragement of

political passivity.

52

3.5.4 Information vs. Entertainment

Some scholars claim that the role of the PSB in political processes is extremely important

(see 2.4.3 consequences of commercialization). According to Blumler (1992), that is why news,

current affairs and political programmes have often been treated as the ones that require

protection. Besides, the PSB is expected to “bear some sense of responsibility for the health of

the political process and for the quality of the public discussion generated within it” (Brants

1998, 318). Therefore, it can be assumed that programmes of news and current affairs are

considered to be one of the main characteristics of quality in the public service broadcaster’s

programming. In addition, scholars argue that organizations used to give free quotas of airtime to

politicians during election campaigns but this is not a precedent anymore in the time of wide

commercialization (Blumler 1992, 12f).

When a question comes to LTV in such a context, it is significant to understand that a

situation with political coverage is quite different. As it is discussed above, the main reason why

heavy political content has been eliminated from LTV programming is the historical and political

context, but not the impact of commercialization. However, it is important to determine

tendencies in which the amount of such programmes moves. Thus, the collected data shows (see

Chart 3) that the percentage of News in the whole content of LTV programming during the

period of 1990-2009 was quite stable and reaches about 1%. The amount of Current affairs

programmes rises in waves between 4.2% and 7.6%. However, it cannot be claimed that it has

been increasing or decreasing since more data is needed for such conclusions.

Nevertheless, it can be concluded that LTV tries to maintain a liberal amount of political

and social information. The biggest percentage of News programmes in 1990 can be explained by

the political situation of that time. The state was transformed from a part of the Soviet Union to

an independent republic and citizens wanted and needed information about the events that were

taking place. The minimal number of News and Current affairs in 1996 signified the period of

uncertainty when LTV was highly criticized for both its programming and its policy in general

(see Šiaulys 1999). In addition, it was a time when the PSB started to lose its audience. The third

column in the chart marks the year 2001 when the public service broadcaster adopted a new

strategy and began to regain its audience. Furthermore, it can be stated that the last period (2001-

53

2009) was a time of stability when LTV tried to fulfill its mission and maintain a stable number

of News programmes, although the percentage of Current affairs programmes slightly decreased.

Chart 3

Share of News and Current affairs programmes in total programmes on LTV in

various years

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

9,00%

Current affairs 6,60% 4,20% 7,60% 5,20%

News 0,90% 0,40% 0,80% 0,80%

1990 1996 2001 2009

Source: data collected by the author from ‘Kalba Vilnius’ and ‘TV antena’

On the other hand, the amount of Light entertainment programmes steadily increased

during the period of 1990-2009 (see Chart 4). This can be explained in two ways. Firstly, the

PSB was liberated from political influence; in consequence, more free space in the schedule of

programming became available, which LTV had to fill with something. Secondly, it was realized

that subsidies from the government were not enough for qualitative broadcasting and income

from advertising became an alternative. However, the public service broadcaster needed more

viewers in order to attract more advertising and entertainment programmes were the best way to

do it (see De Bens, Kelly and Bakke 1992; Tapinas 1997).

54

Chart 4

Share of Light entertainment programmes in

total programmes on LTV in various years

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

1990 1996 2001 2009

Source: data collected by the author from ‘Kalba Vilnius’ and ‘TV antena’

LTV was not the only player in the market looking for higher ratings and more income

from advertising, therefore, intensive competition contributed to such changes in programming as

well. Commercial televisions offered mainly entertainment and collected the biggest part of

advertising (see Chart 5) thus the PSB tried a similar strategy, which according to scholars, was

the main way to react to commercial competition (see Hultén and Brants 1992). Although such

commercialization was criticized by the scholars as the way to “give the people what they want in

the range of where they can make the most profits” (McChesney 2008, 421), the data shows that

it helped the PSB gain more or less stable income from advertising in comparison to the rest of

the commercial money in the television market. Although commercial income received by the

PSB was steadily growing (see Chart 8), it never reached more than 17% in comparison with the

rest of the market. A sharp leap can be observed in 2002, which can be explained by the new

strategy that was adopted by the PSB (see 3.4.3 The third period: 2001-2009).

55

Chart 5

The television industry's income from advertising

0%

20%

40%

60%

80%

100%

Commercial televisions 89,70% 84,10% 86,10% 84,40% 86,60% 84,80% 84,80% 83,10% 85,10%

LTV 10,30% 15,90% 13,90% 15,60% 13,40% 15,20% 15,20% 16,90% 14,90%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Lithuanian Radio and Television Commission 2002; 2005; 2007; 2009.

In conclusion, although the amount of News and Current affairs programmes has been

stable in the programming of LTV, the number of entertainment programmes has been steadily

increasing. Therefore, it can be said that the public service broadcaster has been affected by

commercialization, which is characteristic to the television industry of Europe.

3.5.5 Diversity of the Content

When it comes to the question of diversity in the programming of public service

broadcasting, attitudes vary from country to country of Europe. In the West, it is common to

think that the PSB must warrant diversity of the content (see Hellman 2001; Van der Wurff

2005). However, in Eastern Europe, it is argued that only commercial channels can guarantee that

plurality and heterogeneity remain characteristic to the programmes of television (Pečiulis 2005,

80). The main reason of this difference is the historical and political context. The public service

broadcaster of Lithuania is legally the successor of the Soviet-era Committee of Radio and

Television; therefore, it had to go a long way to earn the trust of the audience when Lithuania

regained its independence.

The data collected shows that the diversity of LTV programming was increasing during

the years 1990-2001 (see Chart 6). It means that although scholars argue that fierce competition

56

and commercialization lead to trivialization of the content and a reduction in the diversity, which

is an important criterion for media performance (see Van der Wurff 2005), this is not the case in

the Lithuanian public service broadcaster in the first decade of independence. This can be partly

explained by the liberation from political influences. When LTV became a public service

broadcaster but not a tool for propaganda, it had the possibility to broaden the spectrum of its

programming since political programmes occupied less of it.

On the other hand, it is clear that such programming was not successful since LTV found

itself in deep trouble in 2001 (see Lukošiūnas 2005). It had not managed to cope with

commercial competition and lost its audience and income from advertising. Therefore, a new

strategy, which could help to compete in market more successfully, was adopted. Scholars argue

that in the recent debate on the PSB, diversity has been acknowledged as one of the ‘vulnerable

values at stake’ jeopardized by market pressures (Hellman 2001, 182). It can be claimed that such

situation is characteristic to LTV as well since as a result of the new strategy, programme

diversity has decreased although it is not as low as it was in 1996 or 1990.

Chart 6

Diversity of progammes on LTV in various years (measured with the help

of Shannon's H)

1,8

1,85

1,9

1,95

2

2,05

2,1

2,15

1990 1996 2001 2009

Source: data collected by the author from ‘Kalba Vilnius’ and ‘TV antena’

In order to interpret Chart 6, the value of diversity indicated by Shannon’s H is largest

when the probability of choosing all categories is nearly as equal as possible and drops to zero

57

when one’s freedom of choice is no longer a factor (Shannon and Weaver 1963, 15). In other

words, “a flat or even distribution is considered the most diverse because it indicates that all the

categories are equally well represented” (McDonald and Dimmick 2003, 64). Thus, the highest

value of diversity that is possible in this situation can be counted when the share of all categories

is equal (100%/13categories=7,7). Following this, H=− ∑ 0,77 ln 0,77 and H=2,57. Taking this

into account, the diversity of LTV programming can be interpreted as quite high (2,05 in 2009) as

it is only 0,52 lower than highest possible (2,57).

The data shows that the main components of the public service broadcaster’s

programming in Lithuania are Features and documentaries, TV plays and movies and Music and

concerts (see Chart 7). However, there are some changes in these categories during the period of

1990-2009. The first category of programmes has decreased from about 20% (in 1990, 1996 and

2001) to 13.3% in 2009. In contrast to this, an increase can be observed in the category of TV

plays and movies which reaches 31.3% in 2009. Furthermore, there is a sharp decrease in the

amount of Music and concerts from 25.5% in 1990 to 10.9% in 2009.

Chart 7

Share of different progamme types on LTV in various years

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

New

s

Cur

rent

aff

airs

Fea

ture

s an

ddo

cum

enta

ries

Edu

cati

onal

prog

ram

mes

Pra

ctic

al a

ndad

viso

ry

TV

pla

ys a

ndm

ovie

s

Ser

ies

and

seri

als

Lig

hten

tert

ainm

ent

Mus

ic a

ndco

ncer

ts

Spo

rts

Chi

ldre

n’s

prog

ram

mes

Rel

igio

uspr

ogra

mm

es

Pro

gram

mes

for

min

orit

ies

1990 1996 2001 2009

Source: data collected by the author from ‘Kalba Vilnius’ and ‘TV antena’

58

Thus, the first two changes correspond to tendencies described by scholars (see Van der

Wurff 2004) – the amount of serious information has been decreasing and the number of

entertainment programmes has been increasing. However, the transformation in the music

category goes opposite to this trend. Nevertheless, this can be seen as the normalization of the

amount of music on the public service broadcaster since 25% is too much for television, which

aims to serve the whole society and multiple interests.

Another significant change in LTV’s programming is the growth of the Series and serials.

This category occupied 2.3% of programming in 1990 and 9.6% in 2009. This shift can be

explained by the search for cheaper production costs since purchased series or serials can fulfill a

large part of the programming schedule. There was an increase in Religious programmes as well.

As it was discussed earlier in the text, religion was banned during the years of the Soviet

occupation even though almost 80% of Lithuanians are Catholics. It seems natural that this type

of programming would return to the public service broadcaster.

Furthermore, the amount of sports programmes increased during the first six years of

independent Lithuania and has remained quite stable all these years. LTV has broadened its

spectrum of sports programming. Additionally, it started to broadcast the Olympics, European

and World championships amongst others and that was not the case in 1990. Therefore, it can be

concluded that together with programmes’ diversity, LTV has become more international and

more commercial. However, it managed to maintain programmes in all categories and remains a

place where different ideas and opinions can be presented.

On the other hand, the public service broadcaster of Lithuania is not protected from

political influence – even in these days. Politicians think that the PSB should report their good

works and keep silent about their wrong doings. Criticism is considered as a harmful action,

which can cause the reduction of the financing from the government. In this way, LTV cannot

become an institution, which protects discussions and impartial information (Pečiulis 2010, 81).

All these facts show that the model of revenue is a sensitive issue in LTV; therefore, it will be

discussed in the following sub-chapter.

59

3.5.6 Model of Revenue

Scholars claim that the main reason why television can be called a public service

broadcaster is not a refusal of advertising (Pečiulis 2010, 83), but more importantly, it is to be

financially independent from political powers. The idea of such independence has been cherished

for almost 20 years in LTV and there are several reasons for this. On the one hand, it was

ambitious to introduce a subscription fee and secure the autonomy of the PSB. On the other hand,

commercial channels sought to have fewer competitors in the advertising market as the PSB,

financed by a subscription fee, could be banned from broadcasting commercials (Pečiulis 2010,

76). Such an objective seems to be logical since the Lithuanian television market is quite small to

maintain four national channels. However, television gets the most income from all the media in

Lithuania (Balčytienė 2009, 21). For example, the television market got 42 million Euros from

advertising in 2009 when newspapers got 21 million, radio got 8 million and the internet got 6

million (TNS 2009).

Following this, there was an ongoing debate on the license fee since 1996 when the Law

on the National Radio and Television was adopted. It stated that LTV was financed by subsidies

from the government, a license fee and income received from advertising, publishing and

economic activity (Law on the National Radio and Television 1996). Consequently, the public

service broadcaster was free to sell advertising in the same way as commercial televisions.

However, the law established a notion that advertising must decrease gradually with the

introduction of a subscription fee. And this should have happened in the year 2000.

Furthermore, a great struggle over this issue began. According to scholars, there was an

impression that politicians did not want to introduce this fee for several reasons. To begin with,

they were afraid of the tension in society when a new tax was introduced. It was assumed that the

subscription fee was a taxation of a service that used to be free in the past (Pečiulis 2007, 115).

Moreover, it was believed that the programme of the commercial broadcasters was free of charge.

In addition, politicians “were openly skeptically assessing the possibilities of its collection,

similarly, they did not want to lose the control of LTV” (Pečiulis 2010b, 83; see also Balčytienė

2005). Thus, such a vague situation was convenient to politicians as they could criticize the

content of the PSB’s programming and base the station’s financing on their political will. On the

other hand, the position of LTV was passive in this debate since the introduction of subscription

60

fee was considered as an attempt to disrupt the public service broadcaster. “It was feared that

with commercial income falling and the failure to collect sufficient income from the subscription

fee, LTV might go bankrupt” (Pečiulis 2010b, 83). However, nothing changed after all the

discussions. Politicians lacked the will and power to adopt unpopular decisions and lose the

influence over the national television. Finally, the provision of the public service broadcaster

funding from the subscription fee was deleted from the law in 2005 (Pečiulis 2010, 91).

Nowadays, LTV remains unprotected from the influence of political powers. “It is

possible to do it by means of management structures, changing laws, assigning budget

allocations” (Pečiulis 2010b, 84), which are already the lowest in whole Europe (Pečiulis 2010,

76). In addition to this, budget subsidies become even lower if the head of LTV is unfavorable to

the government. In this way, the functioning of public service broadcaster becomes unstable. For

example, the public service broadcaster has changed 14 General Managers during 20 years of

independence and only one of them has finished his tenure (Pečiulis 2010, 80). That is why the

scholars argue that a subscription fee should have been introduced in 1990-1991 when a new

political and economic situation was developing in Lithuania (Pečiulis 2010, 92).

Chart 8

Budget of LTV

0,00%

20,00%

40,00%

60,00%

80,00%

100,00%

Subsidies 84,30% 71,90% 71,60% 65,10% 66,90% 63,90% 62,30% 61,30% 69,70%

Commercial income 15,70% 28,10% 28,40% 34,90% 33,10% 36,10% 37,70% 38,70% 30,30%

2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Lithuanian Radio and Television

61

Furthermore, statistical data shows (see Chart 8) that commercial income of LTV has

been steadily increasing during the period of 2001-2009. As it is discussed above, it is the time of

partial recovery of the PSB when the percentage of commercial income increased from 15.7% to

38.7% in comparison to the whole budget. The drop of income from advertising in 2009 can be

explained by the economical crisis, which affected both the economy of the state and whole

industry of television. Thus, a conclusion can be drawn that commercialization of the public

service broadcaster of Lithuania has been steadily growing however income from advertising is

still not higher than one third of the whole budget. That is why it can be claimed that the

possibility to make political influence is still bigger than commercial influence since the main

money is still received from the government.

3.6 Summary

When other European countries were changing their television industries from

monopolies to multiple players in the market, the Lithuanian television industry was experiencing

a great transition from a politically controlled media to the free one. However, it faced several

challenges. First of all, there were no traditions of public service broadcasting in Lithuania. In

addition, the changes in the television industry coincided with transformations in political and

public life and that is why LTV did not really know how it was expected to act.

The process of media capitalization began and the first commercial broadcaster in

Lithuania was introduced in 1992 (Tele-3 then and TV3 now). Two more national terrestrial

commercial television companies followed in 1993 (BTV) and 1995 (LNK). Nowadays four

national channels operate in the Lithuanian television market: the public service broadcaster, two

commercial televisions owned by Lithuanian capital and one commercial channel controlled by

Swedish MTG. Additionally, there are 28 local television stations and 54 cable television

channels in Lithuania. Both the commercial and public sectors are regulated by the Law on the

Provision of Information to the Public, which is declared to be the most liberal media law in

Europe. Furthermore, a specific legal framework of the PSB is defined by the Law on the

National Radio and Television.

The main principle of concentration regulation in Lithuania is established in the

Constitution of the country. It states that nobody can monopolize the mass media or any part of it

62

is. However, there are no specific restrictions in any other laws. The only law that regulates this

area is the Law on Competition, which defines the dominant position in the market as if a

company occupies more than a 40% share of the market. However, concentration counted by a

concentration ratio refers to 65.1% therefore, it means that the national television market in

Lithuania is concentrated.

When it comes to the internationalization of the television market, it is important that

Lithuania does not share a language with its large neighbors Poland and Russia; therefore, media

regulation is not protectionist here. According to scholars, foreign ownership is even encouraged

especially favoring investors from the neighboring Scandinavian countries (Balčytienė 2009b,

48). Nevertheless, national ownership dominates the television market since international

investors control only one television station (TV3 by MTG). This index is the lowest in the Baltic

countries. From the perspective of content internationalization, there are quotas for European

production in television broadcasting; however, the research shows that the internationalization

of the content of the PSB has been steadily growing.

Furthermore, the liberal market model has been one of the main reasons for the high

degree of commercialization in the Lithuanian television market (Balčytienė and Lauk 2005,

102). In addition to this, scholars argue that the development of the Lithuanian television industry

can be divided into several periods (see Balčytienė 2002; Lukošiūnas 2005). The first period

started in 1990, when Lithuania regained its independence and the State Television Company had

been changed to a public service broadcaster (LTV). This period ended in 1996 with the adoption

of the Law on the Provision of Information to the Public and the Law on the National Radio and

Television (Lukošiūnas 2005, 1041). More foreign media products appeared on TV screens

during this period. Moreover, according to some studies, “the changes in television programming

indicated the “Westernization” of society: not only more popular movies and entertainment

programmes were shown, but the first signs of rivalry between national television and

commercial stations were observed as early as 1993” (Balčytienė 2002, 104).

The second period started in 1996 and lasted until 2001, when the television market

stabilized and commercial broadcasting became profitable (Balčytienė 2002, 118). This time can

be called the rise of commercial television stations and the fall of public service broadcasting

since in the mid-1990s “there was a shift of audience attention toward the commercial

broadcaster” (Balčytienė 2005, 46) and the real commercialization, with all its merits and

63

drawbacks, settled over the television industry. Programming of the PSB had been changing

further on. In addition to this, new laws started to regulate the amount of advertising. Finally,

LTV went from the most watched television station to the least watched.

The last period analyzed in this paper began in 2001 and lasted until 2009, when the

public service broadcaster of Lithuania partly recovered its positions in the television market

when the company adopted a new market-oriented producer system, rescheduled debts, cut costs

and invested in programming (Lukošiūnas 2005, 1027f). On the other hand, there are scholars

who argue that the existing differences between the programming of the PSB and commercial

stations are minor.

One of the most sensitive issues in the work of LTV is its model of revenue. It is

important for the PSB to be financially independent from political forces and that is why there

has been an ongoing debate on charging a license fee since the adoption of the Law on the

National Radio and Television in 1996. However, the provision of the public service broadcaster

funding from the subscription fee was deleted from the law in 2005, leaving LTV dependent on

subsidies from the state and advertising, which had been growing during the period of 2001-

2009.

64

4. Conclusions

The purpose of the study was to describe the influence of the changing market on the

public service broadcaster of Lithuania using a theoretical framework and quantitative methods

resulting in an economic picture and the political context of the television industry in Lithuania.

Firstly, the main characteristics of television commercialization in general were analyzed.

Secondly, those characteristics were applied to the situation of the Lithuanian public service

broadcaster.

Thus, four main trends of changes in the television industry were determined:

privatization, concentration, internationalization and commercialization. All of them have been

related to the hypotheses raised in the paper; therefore, conclusions are drawn following this

logic.

Hypothesis 1 – the number of news and current affairs programmes on LTV has

continuously decreased in the years 1990-2009

This hypothesis is related to the trend of commercialization but it cannot be proved or

disproved by empirical research, which shows fluctuations in the number of News and Current

affairs programmes during the period. However, these changes can be related more to the

historical and political context of the country rather than to commercialization. The main reason

why political content has decreased in LTV programming after 1990 is the attempts to liberate

television from political influence. Thus, it can be concluded that LTV has tried to maintain the

amount of News programmes (0.4-0.9%). This is an indication that LTV has successfully resisted

the commercialization of its news programmes. However, a more detailed analysis is required in

order to know if the number of broadcast news minutes per year decreased since the number of

programmes might have remained constant but it could be that the news programmes became

shorter. In addition, more data is needed in the period of 2001-2009 for broader conclusions

concerning programmes of Current affairs as well, since tendencies are not clear from the data in

hand.

65

Hypothesis 2 – the number of entertainment programming on LTV has continuously

increased in the years 1990-2009

This hypothesis is closely related to the first one and the trend of commercialization. In

addition, it is proven by empirical data, which shows that the amount of Light entertainment

programming has been steadily increasing. It may mean that LTV is becoming more and more

similar to the commercial broadcasters and may abandon its mission to serve society. On the

other hand, it cannot be denied that intensive competition contributed to such changes in the

programming as well. All in all, such tendencies of the public service broadcaster programming

correspond to characteristics of the whole television industry in Europe (see 2.4.3 consequences

of commercialization). Therefore, it can be said that LTV is not exceptional in the overall picture.

Hypothesis 3 – the amount of advertising on LTV has increased in the years 2001-2009

This hypothesis is validated by empirical data, which shows that the amount of

advertising in LTV has been steadily increasing during the last decade. It is assumed that this

hypothesis is closely related to the trends of privatization, concentration and commercialization

since private commercial broadcasters influence the PSB’s possibility to get more income from

advertising. In addition, they are concerned that the public service broadcaster, which is partly

supported by the government, could not have an opportunity to get commercial income at all.

Following this, the process of concentration can be estimated as the attempt to cumulate power in

order to have an advantage in competition.

Thus, a conclusion can be drawn that LTV managed to get more income from advertising

every year, although its share in the whole amount of money committed to the television market

did not reach more than 17%. In addition to this, commercial income is still not higher than one

third of the whole public service broadcaster’s budget. That is why it can be claimed that the

possibility of political influence (government allocates 70% of money in LTV’s budget) is still

bigger than the commercial influence (30% of budget).

66

Hypothesis 4 – the quantity of imported TV production on LTV has increased on LTV in

the years 1990-2009

This hypothesis is confirmed by empirical data, which shows that the amount of imported

production has increased in comparison with locally-made programming during the period. This

result is related to the trend of internationalization and commercialization as well since together

with the imported production, the threat of bigger commercialization appears. Following this, it is

important that the amount of international production has grown by a third in the public service

broadcaster; thus, it can be claimed that LTV is strongly affected by internationalization.

The amount of production made in Europe has doubled during the period. However it can

be explained by quotas for European programming. Due to this fact, it is unlikely that the amount

of European production will decrease in the future. On the other hand, it means that the PSB will

maintain a high level of European content and therefore, to a certain extent, resist the massive

import of American television production (see Wildman and Siwek 1987; Meehan 2007). In this

way, diversity and quality of the programming may not drop. However, at the same time, this

tendency seems to be one of the factors resulting in audience loss. It shifts to commercial

televisions, which broadcast more American production. For example, the PSB has tried to adopt

several programmes based on international formats but they proved to be more successful on

commercial televisions. In conclusion, it can be said that commercialization reached the PSB

through the channel of internationalization by making it more homogenous to international

counterparts.

Hypothesis 5 – the diversity of programming has decreased on LTV in the years 1990-

2009

This hypothesis is disproved by empirical research since the data shows that the diversity

of LTV programming has increased during the period. Therefore, it can be argued that fierce

competition and commercialization have not affected the content of the public service

broadcaster programming in this way. In addition, all categories of programmes remain filled. On

the other hand, two out of three main components of LTV programming can be called

entertainment (TV plays and movies and Music and concerts), which now compose more than

67

40% of all programming. Another significant component, which has grown during the period, is

Series and serials, which is a cheap way to fulfill a big part of the programmes. That is why it

cannot be denied that LTV has become more commercial and a more entertainment-based media,

whose content is filled with a growing number of international products.

All things considered, the public service broadcaster of Lithuania has managed to

maintain its programmes’ diversity; therefore, it remains the place where different ideas and

opinions can be presented. However, the amount of entertainment, imported production and

advertising has increased thus, concern about growing commercialization is reasonable. These

changes correspond to the tendencies in the European television industry (see Siune and McQuail

1992; Hellman and Sauri 1994; Van der Wurff 2004); however, Lithuanian viewers seem to

prefer the more heavily commercialized programmes since the leader of the market is the

commercial television station TV3, whose market share is almost twice as large as the one of

LTV. Therefore, the public service broadcaster faces a dilemma of quality and audience share.

In my opinion, the public service broadcaster of Lithuania should refrain from further

commercialization in this situation and there are several reasons for this. First of all,

commercialization of television broadcasting results in the trivialization of the content of its

programming (Van der Wurff 2005, 249). Thus, it can be argued that the time devoted for serious

programmes such as current affairs and political or social discussions would gradually decrease

due to further commercialization. The programming of the PSB would be filled with cheaper,

easily consumed production – mostly entertainment – movies or serials since TV shows still

require more effort to produce and more money. Intellectual engagement possibilities for citizens

would decrease since programmes that focus on politics, social issues, current affairs or debates

would be neglected or would only have a marginal programme time.

In addition, the problem of children’s education should be taken into account since

children spend a lot of time in front of television (3h 8 min – 2004, 2h 26min – 2009 on average

per day in Lithuania) (TNS 2009). Thus, the further commercialization of the PSB content means

less educational programmes. According to Williams (2005, 67), educational programmes “do

not replace other kinds of education, but they add to them, and in some cases change them

qualitatively”. In Lithuania examples of children education programmes on LTV are “Linksmoji

šeimynėlė” (“Happy family”) and “Gustavo enciklopedija” (“Gustav’s Encyclopedia”). The first

68

programme promotes the family spending time together and learning about culture (festivals,

literature, games etc). In addition, parents teach their children how to solve their problems and

offer children useful advice. The second programme promotes biology, geography, history, music

and even cooking. Both programmes are 30 minutes long and they are broadcast every weekend

in the morning. Commercial television stations do not offer this kind of children’s programmes in

Lithuania. Instead, they offer what is cheap and attracts advertising – mostly cartoons, which

offer entertainment and do not contain the same kind of educational elements as the PSB

children’s programmes do. Therefore, it is important to maintain the PSB as a non-profit

broadcaster with qualitative educational programmes that are important for the development and

improvement of society.

Another argument against further commercialization of the public service broadcaster of

Lithuania is the growing amount of advertising, which is an unavoidable consequence of this

process. More income from advertising means more influence of advertisers on society – which

seems contrary to the spirit of the PSB’s mission. Lithuania already has three national

commercial television stations and surely society needs to have a channel, which can offer

objective information that is not filtered by commercial messages, and the PSB can be such a

channel. However, the more it is financed by the advertisers’ money, the more a threat to

objectivity arises. According to Chomsky and Herman (1984, 17), “large corporate advertisers on

television will rarely sponsor programmes that engage in serious criticisms of corporate

activities”. Moreover, companies might withdraw advertising from a television station if its

programme is not favorable to them. In other words, television channel has to prove that the

context of its programming is beneficial to corporate interests. Thus, in order to get money from

advertising the PSB might have to cease to be critical. As a consequence, society would not be

encouraged to think critically about the world. In addition, educational capacities and intellectual

skills of its members would not be enhanced.

Furthermore, commercialization is widely associated with the decrease of programme

diversity. Although, Brown (1996, 13) argues that “virtually all type of programming offered on

public television” is nowadays available on cable television and that the argument of the PSB as a

promoter of diversity would no longer be relevant (see also Heap 2005, 114), this opinion omits

the fact that viewers have to pay for international television stations, which broadcast via satellite

or cable while the public service broadcaster is free in Lithuania. Therefore, the PSB offers a

69

place of discussion and information, which is available for all members of society, despite their

social and economic status.

In addition, if the public service broadcaster becomes more commercialized, the balance

between popular and qualitative cultural programming is lost. The citizens in a society are then

forced to consume mainly popular commercial productions without the possibility of choice.

Commercial television stations, which are not obliged to fulfill the mission of public service

broadcasting, cannot be forced and would never broadcast loss-making programmes, although

they may be important and interesting to a part of society. Commercial television stations are

committed to broadcasting certain types of programmes if they want to get a license to broadcast

in Lithuania. However, the main profile of their programming is entertainment (81% of

entertainment – LNK, 80% of entertainment – BTV) (RTK 2009a; 2009b). Therefore, the role of

the PSB remains vital in order to warrant quality, diversity of programming and an opportunity

for viewers to be active citizens rather than consumers.

4.1 Discussion

Results of this research can be compared with the study on development of the Estonian

public service broadcaster (see Shein 2002) since both countries have a similar historical and

political context. Thus, the first similarity is the general development of the Estonian and

Lithuanian PSB. Both of them have gone through similar periods of transformation,

establishment, a financial and organizational crisis, stabilization and seeking new methods for

further development (Shein 2002, 136). Therefore, it can be claimed that although the

development of the Lithuanian public service broadcaster does not correspond to the model of

Western Europe, it shares similarities with post-communist countries, which have a similar

context.

Furthermore, the impact of competition on the television industry was similar in these

countries due to their small markets. Commercial broadcasters tried to solidify their positions in

the industry by any means available. In addition, the limited number of national terrestrial

televisions survived since the amount of advertising was too small for a larger number of

competitors. When it comes to the PSB in such a situation, it was not able to compete

70

successfully. Moreover, financing from the government was too low to ensure the quality of

programming and technical development both in Lithuania and in Estonia (Shein 2002, 143).

Following this, the changes in content of the programming are important. Although some

patterns in the models of programming in Lithuania and Estonia can be observed (movement

towards entertainment and growing commercialization), the main difference is the amount of

imported production (Shein 2002, 149). While it has been growing steadily in Lithuania during

the period of 1990-2001, Estonia manages to maintain a quite stable level. Consequently, the

internationalization of the content is lower. Therefore, it can be claimed that even though the

countries share a very similar historical and political context, the programming of the PSB has its

own peculiarities in different countries, which cannot be generalized too much.

On the other hand, sharp differences can be determined in the Lithuanian situation if it is

compared with Western Europe. To begin with, processes of privatization and concentration in

the television market were not so rapid due to a lack of juridical regulation and experience. In

addition, the economy of the post-Soviet country was not as developed and strong as in the West.

Consequently, the market of advertising was not able to support so many television stations. It

may be the reason why the content of LTV programming was not commercialized as rapidly as in

Western Europe.

According to research, which was conducted in the Netherlands (see Van der Wurff

2004), the content of the PSB programming in this country had changed sharply during the period

of 1988-1999. As a result, serious information and youth programmes were changed to light

information and series formats (Van der Wurff 2004, 224). The diversity of the public service

broadcaster programmes lowered as well. The same can be said about Finland, where the

diversity of the PSB content had been steadily decreasing during the period of 1988-1996

(Hellman 2001, 198). However, as this study shows, such a situation is not the case in Lithuania.

Therefore, a conclusion can be made that the slower development of the economy caused a lower

degree of commercialization of the PSB, particularly considering the fact that the main part of

LTV’s budget is made up of state subsidies.

Another significant difference was the political situation. While it was natural to liberate

the public service broadcasting from restrictions and political control in the old and strong

democracies, Lithuanian politicians were not able to renounce their influence on the PSB. As a

result, it was one of the main reasons why LTV could not work and compete successfully. Its

71

budget was constantly regulated by political powers according to their will. In addition, its

governance was unstable since all General Managers who were unfavorable to political powers

were put under pressure to resign.

When it comes to the trend of internationalization, LTV has to compete with only one

commercial television station owned by foreign investors. However, it is the strongest player in

the television market, which has the possibility to buy popular international television formats

and host expensive local projects as well. Therefore, it is clear that the public service broadcaster

is unable to outrival such a competitor with its limited resources. As a consequent, the question of

the model of revenue arises again. The government is unable to warrant sufficient funding, there

is not subscription fee and the PSB is not able to compete successfully in the market of

advertising. That is why it is natural that the amount of cheaper imported production, which can

fulfill the schedule of programming, has been increasing.

This process is closely associated with the trend of commercialization as well. The PSB

sought to increase the amount of entertainment in its programming in order to attract more

advertising, which could fill its budget. In this way, a vicious circle was created – the PSB

needed more money in order to create qualitative production so it broadcasted more

entertainment in order to attract viewers and advertising. As a result, LTV was commercialized

more and more. On the other hand, it was the only way to survive since the model of revenue was

not perfect.

4.2 Outlook

In order to encourage more research on this topic, the author poses some ideas which are

related to this subject. The examination of these angles could complement this study and be

relevant for the whole field of research.

Thus, besides the question answered in this paper, more research is needed in order to

determine precise tendencies of the amount of News and Current affairs programmes. This could

show whether changes in such programmes in different periods can be observed. Moreover, the

increase or decrease of political and social information in the PSB’s programming could be

determined in order to compare it with global tendencies.

72

In addition, a drop of programme diversity was observed in 2009; therefore, it would be

useful to study changes in it during the whole period of 2001-2009. In this way, the answer to the

question if the diversity of LTV programming has been decreasing could be found. Moreover, I

have faced the problem that there are almost no studies concerning the issue; therefore, I think

that it would be useful to do qualitative interviews with employees of the PSB in order to know

more about the internal reasons of changes.

Furthermore, it cannot be denied that society has been changing as well. This is

significant factor in this context since the PSB cannot be blamed for commercialization without

taking demand into account. LTV could not maintain its status quo if there was nobody to watch

it. Qualitative programmes needed viewers whom were ready to receive it. The situation was

different when Lithuanians had one television channel. Everybody watched it without

questioning its programming. However, when commercial channels entered the market, the

audience realized that they could choose. This was crucial for the PSB, which was obliged to

both follow its mission and operate successfully.

Finally, the hypothesis of convergence could be tested in the Lithuanian television market

by analyzing both the PSB’s and commercial televisions’ programming. In this way, another

aspect of the commercialization impact on LTV could be investigated by revealing its similarities

or differences with commercial broadcasters.

73

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