New media law to end TV chaos

Networks see ratings, ad-revenue freefall

BUDAPEST — The new media law, to be drafted in the coming weeks, is expected to deepen Hungary’s commitment to an unencumbered commercial TV industry and strengthen its public TV sector.

Insiders say the goal of revamping the existing media statute, passed Jan. 1, 1996, is to bring order to Hungary’s ailing and impoverished state broadcasting system.

Since its passage and the launch of national commercial terrestrial TV networks RTL Klub, controlled by RTL Media, and SBS-controlled TV2, pubcaster Magyar Televizio (MTV) has gone into a ratings and ad-revenue freefall.

MTV is a distant third behind the two nets in ratings; its ad revenue plummeted from $77 million in 1997 to $7 million in 2002.

The reason for much of the rot is said to be serious flaws in the way MTV is supported by the state and in how public funding is managed.

MTV is a fiscal black hole. The net has received more than $650 million in government funds in the past five years and still teeters on the brink of bankruptcy, dependent on state bailouts for its survival.

According to a report published this month by the State Audit Office, loopholes in the current media law are the reasons for fiscal neglect at the network.

Hungary’s commercial broadcasters also are critical of the current law because it allows the partial financing of MTV from the Broadcast Fund, created by commercial TV broadcast licensing fees.

Lawmakers point out that public broadcasting system MTV, Magyar Radio and satellite net Duna Televizio are owned by foundations beholden to Parliament.

This has created a legacy of weak management and political meddling in all three, critics say.

Although all argue the law needs to be changed, there is little agreement on the scope of reform. Reforming the existing media law, finessed in 2002 to meet the media standards of the European Union, will ensure it reaches the house for a vote at the earliest possible date.

But some critics say the law is too flawed and needs to be redrafted from scratch. “It’s impossible to improve the existing law’s regulations,” says MP Ivan Peto, head of Parliament’s culture and press committee. “The new law needs to be based on completely new ground.”