Over the last couple of years the all-out war in the media market has been intensifying, especially among TV stations

Drugi jezik na kojem je dostupan ovaj članak: Bosnian

By: Ekrem Dupanović

It seems that Bosnia and Herzegovina simply can’t come to terms with itself. It has too much of some things (13 governments, 132 ministries, corruption, and unemployed, disgruntled and hungry people…) and too little of others (jobs, awareness of the need to create an economic development strategy, the political will to make a state that fills the needs of its citizens…).

Among the things in surplus is the media industry. More than 50 television stations and more than 150 radio stations, as well as a substantial number of print media. Most of the media is in the hands of various interest groups and individuals who use the media for the realization of their own interests, and this is usually not in the interests of the public these media address. Apart from the public service broadcasters, other media live from sales at kiosks (print) and the sale of advertising space (the press and commercial radio and television stations). As the budgets for advertising shrink year on year, so the fight for a piece of the shrinking advertising pie becomes more ruthless and merciless. Too many media leads to harsh competition for advertisers and media agencies, which is forcing the media to give huge discounts on their advertising services. Some TV stations even give discounts ranging up to 80%.

The all-out war in the media market has been intensifying in recent years, especially among TV stations, despite the fact that there is a media industry association (UMI), whose members are the most significant television stations, advertising and media agencies. But, instead of being engaged in the development of the media industry and the establishment of new business models that will allow the media to come out of the crisis, the UMI is solely concerned with the distribution of the costs of measuring TV ratings using people meters. Until two years ago, while Mareco Index Bosnia dealt with those measurements, the rules were clear. UMI would publish an annual tender, through which they would chose the winning bidder, with whom they entered into an annual contract. The annual costs of these measurements – according to a key that was adopted by all UMI members – would be divided among the agencies and television stations. The agencies and TV stations didn’t all pay the same, but all agencies and all TV stations paid. Things went on like that until 2010 when several TV stations, led by OBN, objected and claimed that Mareco was producing rigged, false information.

At the time, Ivan Ćaleta, owner of OBN TV, had planned to sell his TV station, but the ratings weren’t favorable for him. He needed a larger reach than the research showed. That’s why the data produced by Mareco didn’t fit his plans. He needed better results, even if they were false. Ivan Ćaleta actually bought OBN TV in Sarajevo after he sold Nova TV in Zagreb. According to the existing legal regulations in Bosnia and Herzegovina, the majority owners (and Ćaleta is the sole owner of OBN TV) of media in Bosnia and Herzegovina can only be citizens of Bosnia and Herzegovina. The Communications Regulatory Agency of Bosnia and Herzegovina allowed Ćaleta to purchase OBN TV, and delayed the registration until he got BiH citizenship under suspicious and still unexplained circumstances.

Even then there was a plan to push Mareco out of the market and to bring a new audience measurer whose measurements would be ‘manageable’. And thus, gradually, the phantom company Audience Measurement (AM) – which is registered in Cyprus – began to enter the market and offer their services of monitoring TV ratings (it’s a phantom company because even today Audience Measurement is unable to provide the Competition Council of Bosnia and Herzegovina with the ownership structure of its company in Cyprus, but more about that later). Step by step, the market ‘fell into silence’. The whole thing coincided with the point when Croatia switched to digital broadcasting, so they had to employ their equipment for measuring analogue television somewhere. Despite warnings from all sides about poor quality equipment and the scandals that erupted in other markets with Nielsen – whose license Audience Measurement claims to have (which will later prove inaccurate, or else Nielsen is trying to wash their hands of everything, so they are now denying it) – the new surveyor installed its equipment and began to offer their services to agencies and broadcasters. They now just had to figure out a way to remove Mareco, which had a partnership agreement with TNS, the largest TV audience measurer in the world. They found a very effective solution. Ćaleta and his partners lobbied for (and probably even paid for) a new bylaw from the Institute of Metrology of Bosnia and Herzegovina, which prescribed that devices for measuring television programming viewership must be serviced periodically – which is unprecedented in the world. And as servicing was required, then this must be done by an authorized laboratory. Since Audience Measurement reported that it has such a laboratory, the Institute of Metrology authorized Audience Measurement to perform the servicing of the people meters, meaning they would issue a certificate of health for their own equipment. Those who lobbied for this decision knew that other measurers would not let their equipment be serviced by the competition, because in order to do so, they would have to submit their software, and that’s simply unacceptable.

With the memo No. 01-46-1-DZ-1420-1/13, dated 10 October 2013, the Institute for Metrology notified broadcasters in Bosnia and Herzegovina about the mandatory application of the Law on Metrology of Bosnia and Herzegovina and the regulations in the business of measuring TV ratings, and informed them that Audience Measurement was the only authorized body to conduct the verification and labeling of devices for measuring viewership that comply with the requirements and regulations. With this, Mareco was eliminated from the market, thus creating the conditions for those who brought Audience Measurement to BiH to measure television ratings as they saw fit. Although this is a legal regulation enacted at the state level, this law is not applied in the Republika Srpska (RS).  In its document No. 05/3/393-439/13, the RS Institute of Standardization and Metrology informed Mareco Index Bosnia that the Institute did not agree to the legal acts of the Institute for Metrology of Bosnia and Herzegovina related to the measurement of TV ratings and that, therefore, the law does not apply to the Republika Srpska (the territory of half of the country). The explanation states that “the director of the Institute for Metrology arbitrarily, without consultation with the Council for Metrology (which operates within the Institute), issued the Ordinance on standards in legal metrology and verification periods in which, among other things, he declared the ‘people meter’ as a measurement belonging to legal metrology.”

The mandate of the old members of the Council for Metrology expired in 2012, and new members have not yet been appointed. The director of the Institute for Metrology is considered to bear most of the responsibility for this because the current situation suits him, as he can issue regulations as he sees fit, without taking the opinions of the entity level institutions into account.

The amount of inaccuracies submitted by Audience Measurement in their reports is illustrated by the fact that on 9 March 2016 the Communications Regulatory Agency of BiH issued a 10,000 BAM fine to the TV station CNN Ltd. from Nova Gradiška, because they hadn’t put transmitters into operation since 1 January 2013 when they got the frequency concession. Although CNN had not even broadcast a program, AM informed its customers that it had remedied the withdrawal of TV Tuzla Canton from TV1 Network with coverage of the same area by concluding an agreement with TV CNN. This information was signed on 09 September 2015 by Jasna Perić, head of customer relations at Audience Measurement.

The way Ivan Ćaleta manages Audience Measurement is also evident from the most recent data. Since it doesn’t have its own transmitters, OBN TV rents transmitters of other TV stations. But since it is not in the habit of paying rent, disconnections occur. Thus, on 22 April the Republika Srpska TV, because of accumulated debts, took OBN off its transmitters, which reduced the number of potential viewers by a whole million people. In order to show that that was nothing to them, according to official data on TV ratings from Audience Measurement, after being cut off from the transmitters, the next day and the day after, OBN TV was the most watched TV station in Bosnia and Herzegovina. And onwards until 1 May. One could only wait for them to start singing that song like Milorad Dodik at the recent protest rally in Banja Luka: “Ne može nam niko ništa…” (loosely translated: We’re untouchable.)

With the protection it enjoys in Bosnia and Herzegovina, Audience Measurement can’t behave differently from how it behaves: arrogant, extortionist, monopolistic. AM has never publicly announced how many people meters they have installed in BiH households. “It’s certainly less than Mareco Index Bosnia had. According to information we have, instead of 550, on average they measure 350 or 380 households, which is a very small sample and the research is very unreliable. Oscillations are huge, the same programs, most often series, differ from day to day in the same time slots. Everyone is dissatisfied. Some stations have striking ratings, like OBN, and this at a time when four of their transmitting points are off, one of which is Sarajevo, which is very problematic,” said Nataša Tešanović, director of the Alternativna Televizija from Banja Luka.

During the renewal of contracts for 2015, AM imposed the condition on all TV stations that, if they didn’t renew the contract under the conditions set by the AM, they would not be entitled to use historical data about the audience regardless of having had a signed contract for the relevant period, and regardless of paying their obligations regularly. This is an unprecedented example of monopolistic behavior – that you don’t have a right to something that you duly paid.

In the fall of 2014, Bosnia and Herzegovina was shaken by the Gibraltar affair, in which representatives of major advertising agencies and some media were arrested. The alleged reason for the arrest was the investigation into the operations of HT Eronet.

Even years before that, the HT Eronet affair regarding alleged money laundering had spun in the media, and even the Prosecutor’s Office of Slovenia investigated the matter. However, this affair was also linked to the political showdown between the parties HDZ and SDP, in the process of establishing control over the operations of HT Eronet. Although the story of the said investigation could be found in the media for (almost) the previous five years, the arrests came at the end of October 2014. There had just been general elections, and the SDP (which was speculated to be behind Stipe Prlić, the director of HT Eronet) had suffered a complete debacle. At the same time, the HDZ was preparing to take over the management of a number of state-owned companies, including HT Eronet, so they could also have their own ‘goose that lays golden eggs’, their ‘own’ telecom operator (SNSD controls m:tel, SDA controls BH Telecom, it’s only fair that HDZ also gets ‘its own’ telecom).

The indictment placed responsibility for a multimillion fraud on Neven Kulenović, director of the marketing agency S.V.-RSA, and Stipe Prlić and Zoran Bakula, president and member of the Management Board of HT Eronet. Investigations were also led against other suspects in this case: Selma Kulenović and Sanjin Kulenović, also from the agency S.V.-RSA, the deputy general director of TV Pink BiH, Lajla Torlak, the director of Program Plus, Darko Aleksić, director of the agency Mita, Ejub Kučuk and owner of the agency Fabrika, Senad Zaimović. All of them were released from custody within 72 hours because the court rejected all of the prosecution’s evidence. But these three days were enough to create chaos in the media market in BiH, to shuffle the cards and completely change the balance of power.

The real reason why these particular actors were arrested at that exact time has never and nowhere been published publically in Bosnia and Herzegovina. The real reason was the negotiations about media buying with advertisers for 2015, which were expected to begin the following week. The arrests were carried out at the end of the week, and it was expected that the Court of Bosnia and Herzegovina would determine a one-month custody for the arrested – which would make it impossible for them to participate in the negotiations. To make matters even worse, the prosecutor’s office issued an urgent letter to all clients of the agencies and TV companies whose directors were detained, asking them to provide all financial documents regarding their cooperation with the agencies and TV companies against whose directors criminal proceedings had been launched. Many of these clients immediately discontinued all cooperation with the accused, so they suffered huge business and material losses by this premeditated and fully conscious move.

To repeat once again, all who were accused were acquitted in further proceedings, except Neven Kulenović against whom the judicial proceedings were initiated. As things stand now, the charge of fraud worth over six million BAM against Kulenović, has now come all the way down to about 200,000 BAM, and the whole matter could soon go bust. The Gibraltar affair was forged only to create a completely new market situation.

The public never learned about this, nor about the people who were really behind this affair, the people who stood to gain the most from the arrest of these particular people, from these particular agencies and TV house, at that particular time. Since the Gibraltar affair involved the Prosecution of Bosnia and Herzegovina, and its Department for Organized Crime, the question arises: Who was powerful enough to be able to time the arrest at that precise moment? Anyone who knows the situation in the BiH media market would readily claim they have evidence that it was Ivan Ćaleta with his powerful friends. Before the Gibraltar scandal broke out, his people from OBN went around agencies waving papers saying: “All of them will go to jail!” They weren’t revealing anything new. All that they knew at the time had already been on Google for almost five years, since the news was announced that Austrian Interpol was asking for an investigation into all those people who would be arrested five years later, with the same charges that were stated against them at that time. However, you can’t arrest people on the basis of what you can find on Google, and therefore all, because of the lack of any evidence, were released from custody after less than 72 hours, including Neven Kulenović, Stipe Prlić and Zoran Bakula, who were the only ones against whom legal proceedings were initiated.

According to unofficial information, the affair was orchestrated by Ivan Ćaleta, owner of TV OBN and several related media agencies. Ćaleta thus conquered a large part of the media market in Bosnia and Herzegovina. Due to the Gibraltar affair, S.V.-RSA, until then the most powerful media agency in Bosnia and Herzegovina, lost a large part of its clients, so on 31 December 2015 it officially ceased to exist. Fabrika, for which media planning and buying accounted for 75% of total revenues, lost all their media clients, closed the media department and became devoted solely to the creative part of the job. Direct Media, the second largest media agency in Bosnia and Herzegovina, was significantly shaken by losing several major clients. Those well informed in the advertising market in BiH claim that Ćaleta managed much of his work in this way, that he is increasingly less interested in the television business (OBN) and that he is focusing all of his activities on the media business (media buying).

Although the television advertising market in Bosnia and Herzegovina is modest (about 40 million BAM), it’s still a figure that allows large profits, especially given the amount of media discount. Those acquainted with the situation say that Ćaleta has ensured a good position in Croatia, where he has his own media agency, he has conquered Bosnia and Herzegovina, where he is a co-owner of one media agency, and he could now turn to Serbia to attack the local media agencies in order to fully master the Serbian media space as well. In this campaign he could be greatly aided by a very close current business partner, Vlado Trišić, owner of RTV BN from Bijeljina, which gave great importance to the coverage of the Gibraltar affair in its programming. Vlado Trišić is reportedly in very friendly relations with Serbian Prime Minister Aleksandar Vučić, because at the time when Vučić’s SNS was under media blockade in Serbia, Trišić broadcasted live from SNS’s rallies through his RTV BN and also gave maximum media support to SNS. Insiders say that Aleksandar Vučić is still very grateful for this. And as a reminder, Ćaleta manages the media agency Sales House, which exclusively sells the advertising space of OBN TV, BN TV and TV1 MREŽA.

The Gibraltar affair was the wind in the sails of Audience Measurement, allowing this company to dictate conditions, blackmail agencies and broadcasters and, put simply, to behave arrogantly, as the only measurer of TV ratings in Bosnia and Herzegovina. Therefore, on 30 March, the Competition Council of BiH slapped a 30,000 BAM fine on Audience Measurement, and a 5,000 BAM fine on its director Damir Avdić. The explanation states that the fine was imposed for abuse of dominant market position manifested by placing conditions on clients to accept additional obligations which, by their nature, have nothing to do with the subject of the contract regarding the measurement of TV ratings, that they made contracts with conditions at prices above the price list, thus putting customers at a disadvantage, and so on… In short, they conducted illegal business and were fined harshly. An avalanche of accusations of illegal business was launched against Audience Measurement on 14 July 2015 by TV Pink, Fabrika, P Plus, S.V.-RSA, TV Hayat and media agency Direct Media, requesting that the Competition Council determine abuse in terms of Article 10 of the Competition Act. While ascertaining the facts of the case prior to the procedure, the Competition Council found that Audience Measurement is in 100 percent ownership of the company MAM Media Audience Measurement Limited, registered in Cyprus, at Vasileos Konstantinou 9, in Nicosia. In subsequent proceedings, Audience Measurement refused the request of the Competition Council for submission of all information about its owner from Cyprus. Also, at the beginning of the process, Audience Measurement claimed that they hold a license from Nielsen, one of the largest global companies that measure viewership of television programming, which was not proven because Audience Measurement failed to adhere to the request of the Competition Council to submit their contract with Nielsen, claiming that the contract is written in English and that it was not possible to translate the contract within the time limits.

This, however, rather suggests that Audience Measurement doesn’t have Nielsen’s license to the software for measuring television ratings, but only a license to use technical devices, which is a big difference. Actually, immediately after the announcement of the decision of the Competition Council to punish Audience Measurement for illegal business, Media Marketing published a comment on this, stating that AM had Nielsen’s license. Nielsen contacted the portal, claiming that the claim is not true and asking that the sentence be deleted.

In their complaint against Audience Measurement, the aforementioned agencies and broadcasters indicated that AM had abused their dominant position as a provider of services for TV audience measurement, by the fact that the Institute of Metrology named it the only laboratory for servicing people meters, which is in conflict of interest because they issue their own attestations of the accuracy of instruments. They also stated that AM uses its monopoly position to force clients to sign a contract within three days, under the principle “take it or leave it”.

In the 39 pages of its reasoning, the Competition Council listed abuses and violations committed by Audience Measurement. Among other things, they stated that AM charged the same services to different TV stations and agencies at different prices, giving itself the right to change and set conditions beyond contract, on the principle “take it or leave it”, and that it is blackmailing individual television stations with rescission unless they accept their ultimatum.

The role of Ivan Ćaleta in ‘busting’ the media market in Bosnia and Herzegovina and its complete submission to his own interests and the interests of a narrow circle of his partners in Bosnia and Herzegovina, is unquestionable. The only question is when will the media and advertising agencies in Bosnia and Herzegovina – who are observing all this rather indifferently from the sidelines and paying dearly for false and misleading information on their audiences – finally understand that their heads are also on the line, and their work and their credibility in the eyes of their business partners. For years now local agencies have allowed anyone who steps from abroad into the BiH advertising market to give them lectures and deal blows as they see fit. That’s not how you build a future for the industry, but that’s an entirely different topic.

(The article was published in Start magazine, issue 453 of 7 June 2016)