WORKING PAPER

First draft- Comments welcome

Dr. Alina Mungiu Pippidi- Harvard University^* and Romanian National School for Government and Administration

STATE INTO PUBLIC:
THE REFORM OF STATE TV IN EAST CENTRAL EUROPE

I am in debt of the following institutions which provided either support or advice for both the reform of TVR and the present work: BBC World Service Training (Cristian Mititelu, Gwyneth Henderson, Liz Forgan, John Shearer and all the others) the Thomsen Foundation, The Open Society Institute (Gordana Jankovic), the Freedom House (James Denton and his staff), the European Commission (Karen Fogg), Coopers and Lybrand Romania (Vasile Iuga), British Council Romania (Helen Meixner and her wonderful staff) and last but not least the Joan Shorenstein Center of Harvard University.

1. A decade of freedom and disillusionment

The exceptional history of Eastern Europe in the past ten years lead to the concentration in a small period of time of a history that would have normally taken many years. The fate of public television is illustrative in this respect. In only a decade public television in former Communist countries evolved from at first the most powerful propaganda instrument (traces of this can still be found at the Serbian Television) to chairs of liberation (the public may still remember the 'Live Romanian Revolution') and finally to a position of increasingly minor media and political actors. This evolution was not only more concentrated than the similar Western European experience, but also substantially different. Freedom of the press and deregulation of broadcasting in ECE¹ emerged in an unstable political and social environment, in societies yet searching for an identity and a normative system to replace the old Communist one. The legacy of the Communist times, consisting both in legislation and practice, the contribution of the transition with its mixture of inflation and fiscal austerity and the desperate power struggles between the old and the emerging political elites also shaped the fate of public television, the once all-powerful media actors. The final result was an aggravation instead of an amelioration in the condition of these institutions. Ten years after, although Parliaments passed legislation that at least formally transformed state into public television, commercial stations became leaders of the market while public stations face growing deficits and a crisis of legitimacy.

Few studies, if any, focused on the role of the media and especially broadcasting, in newly-formed democracies, on the relationship between media and the emerging political order (O'Neill:1998:3). Although some degree of political subordination of public television to governments can be found in Western European countries as well (France and Italy are the best known exemples), Spain and Greece only are models closer to the East European situation. These second-wave democracies were, however, authoritarian and not totalitarian regimes: some degree of evasionism is usually not only permitted, but even encouraged in such regimes, while in totalitarian countries it is not the formal acceptance of the regime, but the internalization of its official ideology which is the main concern of the rulers. Totalitarianism, as religion, is indeed intent on conquering souls: its use of television for this purpose could be the object of many studies.

To understand the situation of Eastern European media after communism it is also worth noting that freedom was not granted, but taken as the first consequence of liberalization. Regulations came later, and in some countries no media law was passed as journalists feread that any regulations might be again used to hinder their freedom. Even when regulations were eventually passed pirate radio stations continued to broadcast without a license (Poland, Romania). The governments, either post-communists or anti-Communists, inherited the control of the monopolistic television, some of the Communist press also survived, but -at least initially- hundreds of new newspapers started, and this furious outburst of expression is perhaps, as Gaspar Miklos Tamas noticed, the most important phenomenon of the transition (GMT: 1999). New regimes proved however as intent in keeping control over state media as the Communist regime had been and state television remained in many instances only a mouthpiece of the governments (O'Neill: 1998: 2). However, since all countries of the region became first members of the Council of Europe, then associate members of the European Union they became subjects to the latest European policy on broadcasting, mainly the 'Television without borders' directive. This lead in only a few years to the deregulation and liberalization of the television markets. Private television was therefore established before the governments had resigned to free public stations, thus prompting democratization, and showing politicians that more subtle ways of using the media must be found in the context of the new pluralism. The Romanian state television, for instance, presented the defeat of the post-communist government in the 1996 local elections as a victory, but since other three private channels had already been broadcasting this only damaged its credibility.

It is a common feature of transition that shows here: the new world is not the one people have dreamed of during communism, looking at Western Europe. That model of Western Europe has either by now changed so radically that it practically vanished, or is inaccessible to East European countries. The transition towards ‘Europe’ is like a ship heading to an ever-changing shore you know how it looked like when you embarked, but you have no idea what it will be by the time you land.

The focus of this paper is the crisis of East European state television, its difficult or sometimes failed transition from the state to the public, in the new environment made up by European regulations, political pluralism and free market. The countries I am looking at are the Czech Republic, Poland, Hungary, Romania and Bulgaria. The period of time I kook at is from the onset of democratic regimes in 1989 or 1990 till today, which means before and after broadcasting legislation was adopted in all these countries.

Deregulation of the television markets provoked a wide debate in Europe over the role of the television, and it was rightly stressed that you cannot have a conception of broadcasting which is out of step with a larger conception of society (Tracey: 1993: 19). The two main philosophies concerning public television, economic and democratic, are usually presented as being mutually exclusive (Atkinson: 1997). However in this paper I will try to use both in the same time as I think in a society transiting in the same time from totalitarianism to democracy and from command economy to market the two approaches are not exclusive, but in fact complementary. Therefore, I shall look at the independence of state television, that meaning the freedom of both managers and journalists to run PT and its programs as they see fit, as in any media outlet, and to the performance of state television to transform itself into an institution able to adjust to market competition and survive. I admit there is an essential difference between public and private television: the challenge of legitimacy is more important in the case of PT. In order to justify its public funding PT cannot afford to be partisan: it has to be objective and act in the public interest. The difference between state and public television lies in the editorial independence; state television complies to the interest of the state (namely the government) while public television is a 'trustee' of the society, performing a role which requires its absolute independence from the government. This means that I accept in part that public television must have a 'mission' as adepts of the democratic philosophy think. I am however more modest than to say that this mission is to educate citizens and provide them with a cultural and national identity. I think other institutions are called to pursue this more in-depth approach and that television is simply not fit to high culture. Its mission as I see it is to provide all the necessary information for a citizen to facilitate his or her enlightened participation to the democratic process, that is, objective, in-depth and prompt information. This might seem as a minimal role but in fact it is not. In the European practice it is quite difficult to attain, although the enlightening model of the BBC is there to show this goal is possible. Any further addition to this basic mission is only hindering the freedom of a media institution to search and define its own identity, and I think this freedom is vital for the survival of any institution, not only a media one. As former Secretary General of the Council of Europe, Catherine Lalumiere put it:

I am however close to the approach of the market philosophy in a few important points that I think complement this model of public television I propose. One has to understand that state broadcasting during communism was very different in its essence from state broadcasting in democratic societies, even with some governmental interference. Journalists of public broadcasting enjoyed the trust of the communist parties: schools of journalism were either infiltrated by the Communist ideology or simply, as in Romania, only sections of the special school for apparatchiks of the party. Funding came from the state budget. Employees had tenure regardless of their performance. Therefore we can consider state television as a part of the public administration, as it is funded by the state, providing a public service and performing an administrative function. It is not by chance these organizations tend to be overstaffed. Indeed as we shall see in more detail later their staffs develop a self-seeking behavior very similar to bureaucracies in oversized states. The passage from state funding to license fees was not welcomed by these institutions since license fees are not reliable revenues. Indeed as late as 1999 an executive of the Hungarian television explained me that the only solution for the financial crisis of MTV is return to complete state funding.

I tend to look upon the reform of these public organizations in the context of the general reform of the administration in EE countries. Some advisors and politicians tried to include public broadcasting companies in this general approach to reform, but collectivism of either the staff or the members of the Parliament were overall effective in preventing this approach to reach its ends, thus leaving public broadcasting companies in a sort of institutional vacuum. In the model I propose PT has little choice but to look upon itself as a public organization which needs to become a consumer-oriented service and improve its performance in terms of audience ratings, financial revenues and cost-benefit evaluation. Here, as for the rest, EE institutions have little choice but step into the contemporary approach in the West instead of remaking the history of the West. For one thing, they are too poor to allow themselves to search very much to arrive late to an economic rationale they could decide for early. For another, as applicant countries to the European Union they seem to have little choice but to become capitalist even in the harder way. The main institutional logic- in fact the only one- requires to devise institutions less and less dependent of the state resources and management able to make their institutions survive through economic ordeals and keep consumers satisfied. The alternative to managerialism or new public administration approach in this post-Communist decade was not a different vision, but the absence of any. If in the case of pure administration models are needed to show they also can be considered in the market and facing competition (Doel: 1979) in the case of public television the emergence of private stations should be enough. In practice it is not: both Socialists, because their are old-fashioned socialists (successors of Communist parties) and some liberals who defend fair competition claim public television should not consider itself endangered by competition in any way and pursue its old programme policies regardless of audience ratings. They do not say, however, how public television is supposed to survive if giving up its share of audience and its legitimacy as collector of a license fee and reducing itself to a minimalist role such as the PBS in United States.

Public television can and should be competitive not only because governments can no longer allow to finance it but because there is no possible performance outside the market. It can do so and still retain its role and identity, unless these are so broadly defined they become an unbearable burden. Furthermore I doubt any good television can be made today in total disregard of competition. The most impressive television I've ever seen was the competition between BBC and ITN in the night of the 1997 British elections. Had BBC been alone in the market I have no doubt their performance would have been good, but not extraordinary as it was the case. The European all-news channel, Euronews, had poor news programs despite resources invested in it when it was a pure public channel heavily protected by member states who were also its only shareholders: once ITN took up its management and 49 % of its shares competition with CNN became a principal target, and Euronews started to do live coverage and improve its programs. Good television is competitive television, and European states who are partners in the Euronews implicitly admitted public companies must be run as private companies when entrusting the channel's management to ITN.

One can say that my model does not really exist. I look upon the BBC as a sort of ideal public television, but the BBC carries no advertising so it has no connection to the market. Nothing can be falser: BBC has perhaps the oldest experience with competing in a market due to the early existence of private television in Britain. In fact BBC was the first public channel to discover that ratings are important not in terms of advertising revenues only, but in terms of influence, legitimacy, and finally as the main feedback from the consumers. When a distinguished sociologist such as Pierre Bourdieu, who otherwise makes such a refined critique of commercial television says that 'the audience ratings system can and should be contested in the name of democracy' (Bourdieu: 1998: 66) one cannot but hear echoes of the justified fears of mass democracy, evoked both by Tocqueville and Ortega y Gasset. The ratings and the polls belong to the same family as the Churchill definition of democracy; they are indicators of the least bad kind possible. If it is not the public who chooses one cannot guess who might have this right. The government ? The elites? The journalists? But we have so many proofs that they will act immediately in their own interest, not in the public’s. The main intellectual delusion with the television is the assumption that if television is so powerful as a communication medium television must use this power to be anything else than television, that is, a medium for popular culture: notably it should be school, university, library, church, and any other enlightenment device possible. We should let however the schools, universities, churches to pursue their role without competition from television. The television which tries to compete with them in this age of competition will cease to be a television and it will lose its market to other channels without ever being able to match the depth of these institutions and inevitably failing to force this message on a large public. We have videotapes, CD-ROMs, the Internet, we live in a digital era: the school and the university can nowadays use multiple media to target their pupils according to their interests and talents, while terrestrial television by definition has to target the largest number possible.

I shall therefore judge performance according to this model. Performant television is therefore competitive television, and the main indicator is the market share. I tend to look upon ‘identity’ as a quality indicator. The more a channel is identified with specific, good quality programs that cannot be found elsewhere the more this channel produces ‘good television’. Criteria for the evaluation are more elitist this time: more than the evaluation of the public it is the opinion of professional elites, such as journalists and critics, which matter here. My inner conviction is that the two tend to coincide in many cases. Saying for example that Euronews is better than it used to be I made a statement that is common among European journalists: since ratings for Euronews kept getting better it seems this is also the judgement of the public.

Two important elements should also be mentioned when assessing the performance of PT and its response to the crisis. One is the evaluation of the importance of an 'occult manager' (Pasquarelli:1990), the other the presence of the concept of 'lotizzazione', the sharing of the positions in the public broadcasting company among political parties. Both terms come from Italy. Pasquarelli, general director of the RAI, the Italian public television, was the first to state publicly that the most important decisions are not even taken by the management of RAI, whose choices are drastically limited by decisions of Parliament committees, government and unions, leaving a very limited space for maneuver. Since our model assumes that only an independent management can be effective and performant these two issues play an important role. The ‘lotizzazione’ is a major issue in eastern Europe. Since nobody had three channels to divide them among Christian Democrats, Socialists and Communists on the Italian model the ECE model is division of the company. Since supervisory Boards are influential in the appointment of management it is not unusual that editorial positions are filled after bargaining among parties represented in the Parliament and respectively the Board.

As it is the case with the 'occult manager' and 'the lotizzazione' some issues of independence have a strong effect on performance as well. There is however a clear separation between areas which are controlled by the broadcaster (internal organization, human resources and programme policy) and areas which are decided politically. The more areas are subjected to the political decision (amount of advertising, schedule, market strategy) the higher the risk is performance will be crippled, since political rationale and management rationale have little if anything in common.

One word on ideology. If the whole of Europe turned quite right in its approach towards the public sector- although the turn was quite limited in many continental countries such as France- Eastern Europe has embodied in its reform goals a conception of administration which is neoliberal regardless the political color of its governments. The problems of public broadcasting were discussed together with the radical transformation of the whole state sector. Shutting down unprofitable state or public services is the politically correct action in all these countries, enjoying the approval of the World Bank and IMF. In many situation it is the philosophy of these two organizations that is by far more influential than the milder, more social European approach to reforms. I did not read any comparisons in France or Italy, despite the budget deficits of public televisions there, between these institutions and industrial enterprises. However the Polish Television was compared to the Gdansk shipyards and the Romanian one to the coal mining industry in order to show their problems are similar and should receive a similar treatment. Governments who privatize what was once considered strategic sectors of the economy such as telecommunications or postal services have now to think twice if they need their rather bankrupt public broadcasters, especially if those become independent and no longer the government's mouthpiece.

Until now I mentioned only what makes the exceptional character of EE television. However, many of the problems state television faces in these countries are common to the problems their Western equivalents met a few years ago and were not entirely successful in putting behind them. These problems are said to be brought about by deregulation imposed either by technological developments or the European directives liberalizing the market, but in fact they only surfaced on this opportunity and in many cases had a previous existence.

Achille Yves makes a good synthesis of these problems, dividing them in an 'identity crisis', a'financement crisis' and a 'organizational crisis'.

The crisis of the European public television is mainly a crisis in the conception of such institutions. Initially conceived as state monopolies in an era when television (comprising education, information and entertainment) was seen as a public good the states must provide, these channels are what the French call 'generalistes', that is, comprehensive channels. Their initial mission was to cover everything from entertainment to national theatre and news. Programming a high culture show after a popular drama, then a children's show, then news and then opera can work only if the channel is the only one in the market: any scheduler knows otherwise this type of scheduling is a disaster. Most of these programmes were also in-house produced programmes, due to the monopoly of these institutions. This means that the organization is nowadays left with a drama department, children's, fiction, music, game shows and so on. Due to the European labor legislation at least in continental Europe most of these people do not work under a temporary contract but under permanent contracts, so the organization must continue to produce everything in order to support them for the entire duration of a life-time. In some countries of continental Europe unions are also very powerful and have a say on management of PT.

These are the general problems of PT in Europe. Domestic legislation and adaptability of the management created quite different situations from country to country, so more than one pattern can be distinguished in the adjustment to the same crisis. The crisis, to be certain, was brought by the deregulation and reregulation of the broadcast industry, prompted by technologic and economic change and the political will to create new opportunities for these (Hoffman-Riem:1992). The states gave up their monopolies as owners of the only programme providers (in some cases, like Britain, this was renounced long ago, but a private monopoly was granted to balance the public one) but they did not give up their roles as providers of a broadcasting order. As private television was increasingly accepted, the state kept the power of granting licenses in exchange for a commitment of the private broadcaster, what the French call 'cahiers de charge'. The amount of intervention of the state in the requirement and enforcement of the respect of public interest by private broadcasters is extremely variable, from high involvement of the state to almost no involvement at all. Even in the case of high involvement it became soon obvious it is almost impossible to make the private companies reach high thresholds of quality, since they could always claim it is a practical impossibility, endangering their survival. So even in the hyper regulated France regulations were changed after private broadcasters failed to meet them. Overall, the broadcast legislation passed in the last two decades showed only that the states were always behind the reality. Hoffman-Riem was right to stress that ' in the event of a gap between norm and reality [supervisory authorities] they often felt compelled to adjust the norm to match reality' (Hoffman-Riem: 1992: 147).

The main piece of European legislation concerning broadcasting is the 89/552/CEE, as amended in 1997. However, the policy of the EU was shaped, on one part, by a decision by the European Supreme Court of Justice, which defined broadcasting as a 'service' and the 1986 treaty requiring member-states to suppers all barriers in front of the free circulation of services, goods, persons and capitals starting from December 31 1992. The 'Television without frontiers' directive only pursued this logic further, requiring broadcasters to apply for licenses in only one member state, and member states not to oppose in any way reception of a broadcast from any licensed broadcaster. (Trapel and Mahon: 1997). The directive, however, required that a majority of European programmes should be broadcast, and it was completed by the creation of the MEDIA program, meant to increase the competitiveness of the European audiovisual industry.

Once it become a matter of common European policy broadcasting could no longer be regulated by member states so to protect their national public broadcaster. As I mentioned earlier, some of the member states had in fact stepped forward in the direction of deregulation, partly because of political will, such as Netherlands, partly forced by reality (Italy, Greece). This lead to an explosion of the market and public broadcasters soon faced an extremely difficult situation. The governments and Parliament of national states did not make the situation easier. They covered the important deficit of broadcasters (Italy, France) but were reluctant to grant them the autonomy needed in order to survive competition. A media committee of the Italian Parliament once took 16 months to approve the quantum of advertising allowed on the public channels. Except for the BBC, protected by its Charter and in fact by the distinct British culture, in continental Europe some degree of political dependence is accepted. The RAI has each of its channels dominated by one of the three strongest parties, the TVE is controlled by whoever is in government (Escobar: 1997). Tenure of management in Italy, Spain and Greece is ridiculous, being a little over a year. Even in France and Germany supervisory boards are politicized along the left-right cleavage and some bargaining among political parties and 'sharing' of the main positions is usual. The German law seems the best of what continental Europe has, granting important powers to the General Manager. The federal government of Germany also makes the connection between government and public broadcasters less direct, allowing therefore more freedom to the PT. This interplay of political influences is part of the institutional culture surrounding PT in Europe and the removal of top management when the government is changed is seen as a sort of political alternance, when not actually embodied in the legal texts, such as in Spain. This explains why these actions are not reported as incidents (except if not provoking a media scandal) so countries such as Italy, Greece and Spain are rated as having a 'free' television in the Freedom House ratings, even if this freedom is sometimes all but relative for public broadcasters. Looking upon countries surveyed it is also worth saying that even if we speak of consolidated democracies and members of the European Union the degree of freedom is extremely low for journalists in public broadcasting compared to the rest of the media and compared to, say, the American media. The situation of the BBC looks in this respect like the exception rather than the rule. Although many public televisions started with the model of BBC - such as the German PT- it is actually quite clear this model is not reproducible, The closer in style tot the BBC is probably ITN, a commercial television, due to the long competition between the two. We can also notice that the situation of the public media is largely dependent on the political culture of every country. In countries where autonomy and pluralism have been long-lasting values, like Britain and Netherlands, the government respects public media and public media strives to be an independent actor. In countries where pluralism is a version of dividing a pie among political elites the lotizzazione is the rule of the game; such is the case of Italy and to some extent Greece and Spain. Again, in countries where the civil society merely reflects the ideological cleavage of the political class, such as France and Germany, there is no free zone left for the true independence of the public media. Spain, with its complicated system of autonomies, may have a chance to build its own model yet: it is still too close to its authoritarian past to have broken free but unlike Greece, current shortcomings may not be part of a long-lasting pattern.

(TABLE 1 about here)

As one cannot fail to notice, the situation is quite different from one country to another. Germany, Britain and to some extent France managed to survive keeping the identity of the public television despite important program adjustments. RAI and TVE, on the other hand, adopted a more commercial strategy, and set out to fight private competitors on their own grounds. ERT could not decide which strategy to adopt and remained somewhere between the two. The crisis only increased public's television dependency on the state and/or government: as an enterprise with problems, public television is vulnerable and can be caught in a crossfire between those who audit its management and ask for performance and those who think the main task of PT is 'cultural' and that it should somehow refuse competition.

Anyway, it is important to say that the autonomy of the public media is an unfinished business in Western Europe. The following resolution of the EBU, the European Union of Public Broadcasters, is expressing merely a necessity than an already existing reality when outlining conditions for public broadcasters to be able to be 'trustees of the nation', the famous expression of the British 1925 Crawford committee.

My point is that due to this situation that European supranational organizations do not have either the political will or the coherent model of public media to export to ECE, as they have, say, a model of judicial or administrative reform. This left public media in a sort of vacuum, and possible allies for its reform were not there when needed. Indeed the approach of both the EC and the Council of Europe in the area was to push states to allow private television as an alternative to the public one, than to achieve the difficult ideal of freeing public media.

Journalists and executives who set to reform public ECE media were therefore resorting to their own model. In most cases this model was a very liberal one, as they were trained either by the BBC (the Czech and partly the Romanian case), the CNN (Poland's first reform team), the Thomsen foundation (Romania) or had a long experience of journalism abroad (Bulgaria). Of course this provoked counter-reactions, as these people were seen by groups endangered by the reform as 'aliens', if not traitors to the national culture. During my term at TVR I encountered serious problems when announcing a bid for the jobs of news and current affairs editors-in-chief. Since Romania had no form of television or journalism training besides the Communist Party's Academy of Propaganda, one of the conditions required applicants to have had some training or working experience with the Western media. I had to defend this against furious press and political attacks. When we were convoked by the Parliament, a MP shouted at me: 'Why do you need someone to have worked for the BBC? Don't we have a wonderful national television school?'. My boss, the President of TVR, who stood by me during this one-of-many storms, is one of the major Romanian film directors and a former President of the Film Academy. He was in a good position to look the man straight in the eyes and say: 'No, we don't have any, wonderful or not'. The Czech newsroom revolted against their news director imported from Britain- although he was a Czech- and against his American-Czech advisor and they forced them out, with help from the Parliament, in just 50 days after they took office (reported by The New Presence: September 1998).

It is clear to what conclusion I'm heading here. The only models available-BBC and the American press- are a bit too far from ECE Europe, and they do not have any leverage there, unlike Bruxelles, which has the means but no clear model agreed upon, despite the existence of EBU.

Analysts of ECE post-Communist media like to divide the transition years in two periods: before media legislation and after, (Trappel and Mahon: 1997; Kleinwachter: 1998). However, both the institutional-formal and the day-to-day approach to public media were shaped less by an abstract, imported idea of public broadcasting or freedom of the press as by the contextual political and cultural environment of each of those post-Communist countries involved. I think O'Neill grasped the essential when writing:

(table 2,3 about here)

The ‘producer’s choice’ was not applied by all West European Televisions, and only in various degrees from one to another. The performance of the east European PT is furthermore affected by specific factors, which can be described as ‘transition effects’ and ‘development effects’.

i. Transition effects

PT, as all the other enterprises, were deeply hurt by an explosion of prices due to liberalization of prices, and the important inflation resulted from it before macro-stabilization was attained. Where macro-stabilization was attended faster, mainly in countries that undertook the so-called shock-therapy, this problem was important for two-three years. Where a gradual approach to reform prevailed (Romania, Bulgaria, to some extent Hungary) it lasted for the whole transition. This meant inflation rates that reached sometimes more than 300% yearly. The value of the license fee thus dropped to almost zero and all governments were slow in adjusting it.

In Poland, on the other hand, since no serious contract existed during communism between radio-television and Telecommunication Companies, being all state-owned, the telecommunications liberalized prices immediately to cope with the crisis. (This was the typical behavior of all state-owned economic agents in the absence of all competition. Nobody restructured, everybody tried to cover their costs by increasing prices and taking advantage of their monopoly). The cost of the transmitters become the major cost PTV had to cover. The same situation occurred later in Romania and Bulgaria.

ii. Development effects

There are two specific features of underdevelopment which show in the PT performance. One is the dimension of the advertising market; the other, the wages of the public sector.

The advertising market took some years to grow. Poland and the Czech Republic had the highest growth rates, while Hungary, due to its early start during the Kadar regime in liberalizing the economy enjoyed the highest amount of direct foreign investment, which lead to a large advertising market. The difference between the population of the countries is also important: a large country as Poland, with more than 40 million inhabitants, provide both a larger market and can depend on a larger amount of license fee revenue. Romania is a medium-sized country (22 million inhabitants), while Hungary and the Czech Republic are relatively small countries. The economic performance cannot therefore be studied isolated from these factors which are beyond the reach of influence of managers. Endless speculation was made about the number of private channels that should be licensed, since doubts existed the market is large enough to support more than one. However, investors were daring enough to start new private channels even after one or two were already strongly established in the market. People-meter companies also poured in, although costs for peoplemeter audience measuring are extremely high. The competing AGB Italy, and their split wing, AGB Taylor Nelson fought savagely in Poland, Hungary and Romania. Other companies tried to get in although it was obvious one peoplemeter company is already too expensive for these small markets. These companies seem decided to lose money for many years before turning profit. It seems however clear looking at Poland that only one company can survive in the market.

Development indicators, such as GDP, are telling in some respects, but not in others A comprehensive study is the life style of these populations is still missing. Data point, however, to the fact that the number of TV owners is not proportional with other development indicators. Television is the mean of entertainment and news of all, and the poorest households cut other expenses in order to purchase a color TV.

(Table 4,5 about here)

The serious trouble PT is in, according to this data, is partly due to its lack of independence. But an important part is made by its performance, that is, upon problems whose solutions are within its reach. In the following lines I shall try to summarize some of them.

a. Problems of internal organization

PT has inherited the labor organization of Communist times. At a macro level this means collective labor contracts. At a micro level the same collectivistic conception prevails: workers are seen in separate categories, instead of part of a creative team, which is indispensable for good television work. This means that cameramen are subordinated in one place, drivers in another, working each separately in shifts. I had to fought the union of TVR to obtain that cameramen should not be discharged after seven hours of work, because this meant they were never present during the afternoon when their piece was edited. Legislation also limits the number of extra hours that can be worked: studio directors, editors and drivers are supposed to take days off in exchange for extra hours, and in one year they cumulated for the extra hours they had to work more than one hundred days off. It was obvious for everyone they would have needed another life to fulfill this. They did not even want to: they wanted to be paid for their extra hours and not granted free days. At TVR we had to negotiate for a year in order to persuade the union to accept to include the term of producer on the directory of jobs and functions and we could not persuade them to give up the limit of wages specified in the same contract. In 1997 I paid the highly successful anchor we discovered and turned into a national hit at the same rate I paid a driver with 20 years on the job, about 120 USD/month. Of course our main private competitor immediately offered her 2000 USD, and we were lucky her husband was a high-paid tobacco executive so we were able to keep her. Like the Poles and the Hungarians I tried to lobby that the revised law change the name of the company and make it practically a new company. In this way we could have got rid of the life contracts everybody had and the labor contract and hire people on the basis of a new organization chart one by one. When this was dropped by the Parliament it became obvious the cause for the reform was lost.

The important distinction between Western PT and ECE PT is that wages make up a minor part of he budget in ECE countries, poor countries with underpaid employees. If wages make the most of the BBC budget, in the case of the Romanian television in 1997 they made only 18 % of the costs. Other costs, such as the more than one hundred buildings of MTV and the financing as the only producer of a pop festival by TVR, (a planned loss of one million USD) are killing the companies. Blind cuts do not solve a thing: rethinking the chart so the design other type of work relations is all.

These problems are common to all ECE PT. Politicians are afraid of conflict, so they do not favor radical approaches to reform not even when bankruptcy is the immediate alternative. In Hungary, the only television where some downsizing was attempted (MTV cut around 1000 jobs from 3500) the management was accused by MPs of political cleansing. It is true such major cuts favor the elimination also of journalists who are not on good terms with the management. The system I proposed, however, was to entrust the whole process to the Coopers@Lybrand in association with a BBC expert and a management representative, in an extensive operation supported by the PHARE assistance program (catch-up facility). This was attacked in a Romanian Court by an union, however, and was unpopular with the Parliament and the Board for removing the decision and entrusting it to ‘experts’ outside the field of political influences.

Restraining labor contracts, post-Communist statist courts, socialist unions, all these are sometimes insurmountable obstacles for the reform unless there is the political will of closing down public television and starting it all over as a new institution. Nothing was easier since the new laws provided this extraordinary opportunity: the Czechs took advantage of it. Others hesitated and paid for their hesitation.

b. On production

It is not too daring to say that production problems originate in the Communist organization of labor. On one hand, this organization took care to create an equal status to the creative personnel and the technical and administrative one (when not openly to favor the last), since the working class had to prevail on all counts. On the other hand, the same organization favored a total disregard of the 'value for money' principle, since all was based on subsidies. If propagandists were content with the program the price was not an issue: and anyway, since all the prices were unreal nobody knew to cost of anything. This lead to spending habits that proved disastrous one the liberalization proceeded. Some costs were recorded, but the budget of TVR was made at the end of year by summing up revenues on one part and expenses on the other. Budgeting is a new science which has to be learned and the new managers have to fight their communist times inherited administration in order to do so. The instrument we've built at TVR was a very simple one: we divided the cost of a show by its market share. Shows with audience of under 1 %- basically all those that ended up cut- became in this scale even more expensive than they were. Only later I discovered that instruments close to this, although not identical, started to be used extensively in Western television. The Polish team of reformers, also in order to obtain real costs, very difficult to calculate for in-house productions, introduced vouchers for editing and shooting that journalists tend to regard as 'free' since no cash is paid for them. The schedule of editing gave the best idea on the tremendous waste going on, as journalists and producers used five times more editing time than needed. The vouchers were meant to limit this waste: included in the budget, they helped awareness of the costs. When a producer exhausted his vouchers he/she should have to pay for more time.

Technical departments are also a major obstacle to reform, as they fight hard an organization on the type of BBC, and try to keep equipment under their control instead of a Production department. A producer must work under some contract with a production department instead of being constantly at the mercy of technicians who decide how much time is needed in order to edit a piece. This type of Communist organization with engineers instead of managers heading Production-technical departments is also mirrored in the organization of unions. Unions are willing to fight to keep it the old way, since the introduction of more market-based organization structures would affect their power.

c. On identity and programs policy

Advocates of the public television from the times of its monopoly usually claim commercial broadcasters are responsible for the decrease in the quality of the programs. This denotes a total lack of self-criticism from the part of public television and at least some lack of knowledge of professional television from the part of independents. Except for perhaps Britain after the last deregulation nowhere public television was very good television when it was alone in the market (of course some shows are an exception, as the much praised Apostrophes of Bernard Pivot. I can argue however that Pivot’s show disappeared because it had reached the limits of its formula, and not because TF1 was privatized). It is true its programs were more diversified and programs targeted at very small audiences were on the air. But the quality of news, current affairs and other programs and especially of commercial ads or other clips- this quintessential genre of pure TV- was inferior to the highest standards known. If one wants to admire public television with resources and lack of competition one has to look at Japan's NHK. Its commercials look like the American ones in the fifties. In some micro aspects essential to television, such as the use of image and special effects, commercial television helped European PT evolve faster. Even the so much accused infotainment had its role. State broadcasters in Eastern Europe and in continental Europe for the fact were not producing BBC-like news. Rather they were illustrating news provided by state-owned agencies with pictures chosen at random and used only agencies coverage for foreign news. The critique of news, both domestic and foreign of Jan Culik for the Czech TV and Anca Toader for the Romanian TV are in all respects similar. We were perhaps more successful than the Czechs, since we managed in two years to either hire new people, train whoever could be trained, and move to other departments those who refused to adjust. The Czech news director, Ivan Kytka, faced a revolt of the newsroom when he tried to reform the News and resigned after only 51 days in office. The idea of making a team from the reporter and the cameramen was so new I had to make use daily of my authority to persuade old employees to accept to work as such with the BBC or Thomsen Foundation trainers. Luckily the young journalists I hired became in time the majority, and started to think in images also, not only in words. This subtle revolution is the hardest to achieve, and seems to interest nobody. However it is here that the essence of television lies, and it is the merit of commercial stations to have re-launched that.

Public television, as the rest of the administration in ECE countries is slow to learn policies must be based on research, not designed from the cabinet of Culture or Prime Minister. The idea that audience is important is accepted with extreme reluctance by PT and seen as a form of giving in to commercial means. Audience is not important for commercial reasons only, however. It is the main indicator of the consumers' satisfaction. The next one would be using polls to inquire if people think PT is objective towards political news, makes satisfactory programs, and even go into qualitative research, which is vital for television. None of these is done as it should be. Politicians do not want polls to find out what the public thinks, because they want their opinion on PT to matter only. Producers do not want any in-depth analysis because they are intent on doing things the way more convenient to them, not the way the public prefers. The result is that PT is hanging on to its own polling institutes, although advertisers use peoplemeter or other pollsters accepted in the market.

When PT was alone in the market identity seemed not a problem. Now, however, it has become an obvious one. As I see it the identity problem of PT should not focus on the difference from a commercial television -commercial channels are very different one from another themselves- but to try to shape some channel identity, meaning logos, sets, costumes, tempo and profile of the programs daily and weekly. Western PT succeeded in this: one can recognize BBC, Euronews, RAI and German PT. ECE PT still does not have a style, because structures are not there to work for it. Creative departments still have the classical designers in one compartment, engineers still 'own' computer graphics stations, real research compartments do not exist and the notion of copywriter is still fighting to be accepted. CME, the main private company in ECE, could not but impress the public used to the poverty of PT look with its bright Novocom-made graphics, its high-tempo ads, and its modern sets. It is not only a question of money. It is a question of staff. One cannot make a look for the 21^st Century with designers hired in the sixties or seventies. However one has to wait until they reach the age of retirement in order to hire young ones.

d. Solutions for a better performance

What can ECE PT do in order to increase it financial resources? Buy the last American productions, as the Polish did? Launching game-shows as TVE and RAI ? Fight to keep the sports events ? Demand for more funding from the state? The answer is complex. It depends on each market and on each public. My particular answer draws on the model I believe in, which is for competitive PT. You have to gain independence in order to achieve performance, but independence is not enough. Would I have to summarize our experience for future reformers undertaking this rather impossible task, the list would look like that:

* Fight for a law which allows the management the maximum freedom possible; the best formula is with an unique broadcasting council, in order to keep party politics as far away as possible; the management board alone must have both the freedom and the responsibility to design and implement a shekel.

* Know your public; make in-depth research to see what it wants, select what is compatible with your ‘mission’ and give it to him

* Select programs on a permanent competitive basis; give the entire budget for production to the News and the Programs Directors and let them organize competitions for the money with in-house and outside producers. Grant as much power you can to directors in charge of programs. They should have the flexibility to change schedules and immediately react to what the competitors do. Make them work under a management contract and give their freedom in exchange for popular programs.

* Get rid of people who are not able of being in a team winning any competition for programs in one year.

* Close down the services inherited from communist times; there is no need to produce in-house furniture, hardware, sets, costumes and so on. You only pay on a permanent basis occasional services, whose low quality you are compelled to accept. Instead contract out and organize bids to have the best value for money.

* contract the ad sales out. Data show the advertising market share of all PT is inferior to the audience share. One reason is that PT has the oldest and the poorest public. But it is not only that. Salesmen on wages of the public sector will never perform, and chances are clients will corrupt them. You cannot handle millions of dollars being paid 200 USD/monthly and remain honest. If this is not possible fight to get them a sales commission, although in the public sector this is sometimes considered illegal. Make a bid to select your external sales company, and make it yearly.

* If you cannot privatize part of your production department, split the internal one in two. Make wages dependent of the number of orders they get. Favor internal competition each time you can.

* If facing cash-flow problems, bind programs you need to individual sponsors. Whatever you cut, do not cut on money for popular programs.

* If politicians and pressure groups want a share of your program make them pay for thematic digital channels. Persuade them a C-Span or an ARTE is the best buy. If you put these programs in prime time nobody is going to watch them anyway.

* If all this fails, hope for bankruptcy. Maybe afterwards the government will decide to privatize your station.

Conclusion:

If a lucky reformer is able to use this recipe and save his/her station, would it then be a public television anymore? If this is the price, do we still need a private television ? These are legitimate questions.