World Media 2006: Eastern Europe

The Czech Republic performed well last year, while Poland was less successful. Many Eastern European markets are starting to show signs of maturity but inward investment needs a boost.

The image of Eastern Europe changed utterly on May Day 2004, when the Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovakia and Slovenia formally joined the European Union. Other countries, notably Romania and Bulgaria, are waiting in the wings.

For good or ill, the prospect of EU membership generally has a calming effect on a country's economy. Cautious fiscal policies are applied to ensure EU economic hygiene targets are met; new regulatory regimes are introduced to encourage a more circumspect business culture and last, but by no means least, governments attempt to put their own houses in order. Risk is driven out and growth tends to stall as everyone waits for the EU gravy train to pull in.

True, the Czech Republic may have had an excellent 2005 - but look at the faltering example provided by Poland. It will be interesting to watch the fortunes of Romania, one of the region's star growth performers in recent years, as it prepares to meet EU approval.

One way or another, though, Eastern Europe is no longer seen as the prospect it was a decade ago. There has been a realisation that, even when these markets were showing huge growth, they were doing so from a very low base and a plateau effect tended to follow. Now, many Eastern European countries are starting to exhibit more mature characteristics.

In terms of media owners, it is not-able that only one established major multinational, Axel Springer, has pursued a sustained expansion policy in Eastern Europe.

The German publishing company now has 16 magazines (including Newsweek Polska) and one newspaper in Poland, ten newspapers and 22 magazines in Hungary and eight magazines in the Czech Republic. Axel Springer also publishes Forbes, Newsweek and Wallpaper under licence in Russia.

Many prospective investors in the region were alarmed in 1999 when the US venture capital company CME was stripped of its control of Nova TV following intervention from the Czech government.

The news, which surfaced more than a year ago, that CME had settled its differences and had returned to Nova as an investor was obviously seen by media analysts as a more positive sign of the times.

Perhaps now that the likes of the Czech Republic, Poland and Hungary have joined the EU, we will begin to see some serious broadcast giants entering the region.

TOP 20 FASTEST-GROWING AD MARKETS USdollars million at current prices. Rank Country Year-on-year Total spend Total spend % change (est) 2005 (est) 2004 1 Brazil 41.4 6,579 4,653 2 Saudi Arabia/pan-Arab 29.3 3,183 2,462 3 UAE 27.2 814 640 4 Russia 26.8 4,890 3,855 5 Egypt 26.1 647 514 6 Bulgaria 23.1 374 304 7 India 21.9 3,705 3,039 8 Indonesia 18.0 3,095 2,622 9 Turkey 18.0 1,621 1,374 10 Romania 16.4 239 205 11 Estonia 16.0 91 79 12 China 15.0 9,716 8,449 13 Argentina 14.7 1,148 1,001 14 Lithuania 14.1 137 120 15 Hungary 13.2 2,472 2,184 16 Vietnam 13.0 297 263 17 Latvia 12.4 107 96 18 Philippines 11.4 646 580 19 South Africa 11.2 2,643 2,376 20 Hong Kong 11.2 2,499 2,247 ADVERTISING EXPENDITURE USdollars million at current prices. *Estimated Total TV Newspapers Magazines Radio 1994 700 356 156 124 53 1995 935 444 203 168 77 1996 1,351 673 261 220 112 1997 2,023 1,039 383 345 132 1998 2,815 1,469 511 447 178 1999 3,579 1,942 566 599 230 2000 4,207 2,290 662 686 248 2001 5,061 2,964 701 763 273 2002 5,433 3,176 753 790 339 2003 6,060 3,457 912 884 405 2004 6,662 3,698 1,019 994 478 2005 7,298 4,067 1,101 1,082 530 2006* 7,972 4,455 1,206 1,172 570 2007* 8,637 4,857 1,276 1,243 632 2008* 10,732 5,908 1,617 1,513 753 Total Outdoor Online Cinema 1994 700 9 0 0 1995 935 42 0 1 1996 1,351 82 0 1 1997 2,023 119 0 3 1998 2,815 207 0 4 1999 3,579 232 2 7 2000 4,207 304 5 12 2001 5,061 325 15 21 2002 5,433 337 20 19 2003 6,060 339 27 36 2004 6,662 390 39 44 2005 7,298 414 50 53 2006* 7,972 445 63 60 2007* 8,637 485 75 68 2008* 10,732 635 182 124 Year-on-year % change (estimated) Russia 26.8 Bulgaria 23.1 Turkey 18.0 Romania 16.4 Estonia 16.0 Lithuania 14.1 Hungary 13.2 Latvia 12.4 Czech Republic 8.6 Poland 5.3

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