The competitive situation between public and private media in Estonia, far from being stifled, is among the healthiest in the world, says ERR management board chair Erik Roose – who has worked in both sectors. ERR News caught up with Roose after an organization representing private media service providers in Estonia announced plans to take a complaint to the European Commission over what it sees as unfair competition on the part of the public broadcaster, particularly with regard to its online news
The first interview of this two-part series with Merle Viirmaa, head of the Estonian Association of Media Enterprises (EML) – the organization lodging the complaint – is here, and also contains some background to the complaint and an overview of the media landscape in Estonia.
Essentially, ERR is public-funded from the state budget and has been providing online news since early on in its existence – the broadcaster was established by legal act in 2007, merging the formerly-separate public broadcasting TV and radio entities. This news is free-to-use and free of advertising, unlike much of the private sector output on portals like Delfi and Postimees online, which charge subscription fees and carry ads.
ERR also does not face the challenges of a declining print media sector, unlike Delfi's owners, Ekspress Meedia, and the competing Postimees Grupp, both of whom publish daily newspapers in national and regional variants.
Erik Roose, who has seen both sides of the fence, having held top level positions at Postimees from the late 1990s, until being elected ERR's board chair in 2017, says that in fact Estonia punches well above its weight globally in terms of its media and media competition, which remain healthy even with the pandemic, with no threat of going down the totalitarian rabbit hole.*
A philosophical question
"One argument [for the commission complaint] is that without private media, there would be no democracy – but this itself is demagoguery in Estonia's case; we aren't in North Korea or even Hungary. We are still more-or-less equal players, two bigger media groups, then there are two or three smaller ones, behind ERR," Erik says.
"The competition, and also the consumption and market penetration - given there's only 1.3 million people in Estonia – is extremely strong, among the top in the world, and to hack that down for political reasons is quite frankly sort of the nasty end of the fighting scale, and I don't see it as very healthy or pleasant."
"But what role the private sector plays in general is a very important question. If we were like Hungary, with around 70 percent being state media and the rest under part-control of the state, that would not be a good thing."
This points towards somewhat of a dilemma facing Erik and ERR as a whole. Do the job very well, and there's a risk of a Hungary-type situation emerging as a by-product. Do it poorly, so as not to present too much "unfair" competition for the private sector, which does not get a grant out of the state budget, then would inevitably follow claims of wasting taxpayer funds.
"It's a challenge for my job in that if I and the rest of the organization do our job well, then this could actually end up happening by itself, as it were. But we are far from that situation."
Competition actually very healthy as it is
"The competition works in Estonia. It's heavy, but it's healthy, and if I were a decision maker today as a private media owner, I wouldn't make this claim with the commission. I wouldn't be at this stage yet, because I can personally see that there are so many things the private media can do both better and differently."
In other words, the private sector is cutting off its nose to spite its face, in his view.
"I've been 30 years in different areas of business management and I don't think this is a good way to do business, or even a profitable way. They're wasting so much energy in the wrong direction; it's illogical."
Illogical it may be, but perhaps not surprising, given the traditional Estonian temperament which Erik hits on with the following folk analogy: "It's almost like the Estonian joke where for the average Estonian farmer, if his cow is dying, then that's not so much the problem. But the problem is rather that his neighbor's cow is still alive!"
A quality issue, not a financial one
What, then, would be more appropriate as a focus for him, if he were still a private sector media leader, not a public sector one?
"I'd be more concerned about quality and what kind of media product we are producing which would make an audience start to prefer us to our competitors, including ERR."
"How do you select stories, how much you write about politics, economy etc. would be key questions, and not just trustworthiness. I think the private sector is not at the level that it was a decade ago even."
European Commission complaint not a quixotic gesture
If that is the case, then how serious is the European Commission claim? Is it a quixotic gesture?
"No it's not, it's a serious claim. It has its roots in a pattern in Europe which has been going on for the past 10 or 20 years (i.e. really since the mass internet age began-ed.) namely that public broadcasters like ERR, or YLE in Finland, shouldn't get deeply involved in new media, such as web news, and 'should' only use the internet as a catch-up service for already-broadcast TV and radio shows, and things like that."
"This is fundamentally wrong in my view, however, this keeping public broadcasters to just TV and radio."
At the same time, the 2007 Broadcasting Act, which created ERR from the formerly-separate ETV and Estonian Radio, does only mention those media – there is virtually nothing about online, apart from its use for reporting budgets and plans, but not as a news medium.
But we have ERR online – even ERR News in English is 10 years old now, so isn't it a case of trying to put the cat back into the bag, too late?
"No, it's more like putting the toothpaste back into the tube."
Print long been in decline, not a new development
At the heart of the dispute are two key developments, neither of them new.
First, the decline in print media – ERR has no newspaper or other print media - and second, the fact the private sector charges subscription fees for its news (and carries advertising), neither of which ERR does.
So the complaint from the private sector is that it is unfair that users can, and will, get their news for free rather than have to pay for it.
Erik sees this claim as an artificial construct, however.
"Delfi would deny this now but there was a time when they were saying that news portals were not logically inherited portals from the newspaper era, in other words the portals were not the 'children' of the newspaper parents."
"However, now they are saying that is indeed the case, so they are subjectively using the logic to suit them at this moment in time. The obvious global decline of print media was already a trend 20 years ago, far before ERR started to do anything online (or in fact even existed-ed.".
"At the same time, we could say that Delfi, with all its sub-brands (Eesti Ekspress, Maaleht etc.) has eaten into its own readership, so I don't find it convincing to say that their readership, of for that matter Postimees, readership either on or offline, would be radically higher if ERR did not exist or was not producing online news."
"Around 2005 when I was manager at Postimees, I told our then owners, who were Norwegian, that maybe we we shouldn't develop the portal too quickly as it would swallow and eat up print circulation, but their attitude was shut up and Get on with it. They said that their experience with Verdens Gang (VG), Norway's biggest newspaper, was that if you don't 'eat' your own print media with the online version, someone else will, so there was no option but to start investing heavily in online. "
Digital subscriptions not a king's ransom
"We also have to note that every quarter, or even more often than that, they announce again we have had X number of new digital subscribers, and are in a healthy, growing situation – but yet now they are saying, no, we are in a very bad situation. Which of these claims is not true? It's total demagoguery which doesn't see to bother with facts."
"Anyway these discussions were going on 15 years ago, long before the present case, and also after the 2007-2010 crisis, which hit the private media companies hard, as well as the rise of social media, whose giants – Facebook, Twitter as well as Youtube, generally don't pay tax in Europe and certainly not in Estonia."
"A digital subscription costs just a few euros – compared with around €40 eur per month for cable TV, for instance, so the component is so small – even for pensioners (now, it wasn't the case say 10 years ago) this is not a financial barrier."
Nothing substantive changed after coalition entered office last year
Another obvious question is the political one. Finance minister and EKRE leader Martin Helme recently refused to answer questions from a Delfi journalist at a press conference, referring to it as "fake news". Is this behind the timing of the EML claim with the European Commission, along with the fact that the state budget for 2021, out of which ERR is funded, is being discussed right now.
"I don't think there is any practical connection between the political rhetoric and the claim. This may seem pretty tense in the past year or two (Martin Helme also accused ERR of political bias last summer – ed.) but it's not really anything new; I can remember 12 years ago the kind of rows between Savisaar and the Reform Party. The rhetoric was practically the same, even if people have forgotten that."
ERR has a supervisory board, which includes representatives from each party elected to the Riigikogu – currently five – something which the private sector does not.
"While the politicians can't interfere on a day-to-day basis, they can still have monthly comments and questions via the board meetings. From time to time, of course, they, the politicians, can be right, and from time to time there might be some mistake on our side, so in this sense there is relatively good interface between politicians as taxpayers representatives by definition, and us."
As noted the private sector does not have this dimension, but that has not stopped them from lobbying politicians and other stakeholders on this issue in recent months.
"They have been doing this, but they have failed to convince them of the problem, and so gone down this European Commission route instead."
"It's reminiscent of how in the past people would have turned to Moscow with these types of complaint, but nowadays it's Brussels instead."
"In fact, it goes against the principles of having a public discussion."
Solution should be more constructive
"Delfi and Postimees are far bigger than ERR – but they don't like the fact we are growing, doing a good job. Just imagine from the next day there was no ERR. What kind of media landscape would there be. I can't imagine it would be better than it is today."
"I'd say that working in the private sector media nowadays would be an even more fascinating job than when I was there, and there are so many possibilities – so just crying in the corner, maybe they should take another approach instead."
Most of the complaint focuses on online news aspect, but in fact it might more logically be applied to TV and radio, he goes on.
"ETV is providing much more competition for [Swedish-owned] TV3 and the other channels, but at the same time, tying it in with online news, you have to remember that for younger people, who are working, say the under-40s, most of them don't have a TV but are still taxpayers. Yet their grandmother, say, is no longer a taxpayer but most likely gets her news from the TV. Why should the non-taxpayer get free news on the TV, and the younger taxpayer have to pay for it online?"
The Finnish experience
Looking to Estonia's northern neighbor, Finland, which saw a decision announced in mid-summer this year that YLE, that country's public broadcaster, would have to cut right down its online news to brief summaries of TV and radio spots (a process of consultation is still ongoing so nothing has changed along those lines yet), this was quite obviously the catalyst for the EML's claim.
"Our guys in Estonia were a bit slower than in Lithuania, however, where the Lithuanian equivalent of the EML started their claim just three or four days after the Finnish decision. The Lithuanian financing model is a bit different from ours though, which is closer to the Finnish model of a set grant which is theoretically implemented into a development plan).
Whither ERR News in English?
For ERR News as the English portal the situation is a bit different, then. ERR News is only online, having no regular radio or TV shows at all.
Finland again provides a beacon here too; while the commission decision affected Finnish-language news, due to the union's attitude towards minority languages, it does not apply to the official minority languages in Finland (ie. Swedish and Sami). Whether this would apply to ERR in English is not clear, but with Russian, it would be even more complex, given the status of the Russian language here.
"If we had a situation where ERR could not provide news in Estonian, but it could in Russian, this would be dynamite. We didn't even have a situation like that in the Soviet time."
Enter the coronavirus
The COVID-19 pandemic has its effects, though not always in directions we might expect. Newspaper sales fell during the worst of the pandemic and it is easy to see how a second wave might not favor the physical buying of a paper, as opposed to logging on. But online subs were not harmed by it.
In any case, it may not directly affect the commission's decision – though it could have an influence.
In prognosis, Erik says that is far too opaque a topic to say. Certainly, post coronavirus, the commission's attitude to state aid seems much more liberal than it had been – had Estonian Air been in trouble right now, it would have received the state aid it was denied in 2015, just as the airline's successor, Nordica, has succeeded in doing.
Estonia has a commissioner – Kadri Simson – but her portfolio is energy (the commissioner for competition is Margrethe Vestager of Denmark, and there are likely several other relevant commissioners-ed.).
In any case, the Finnish experience (which began in 2012 and its latest round started in 2017) shows that the outcome can be measured in terms of years.
"I wouldn't be too optimistic as a private media owner from this perspective," Erik says.
Ultimately, ERR should be thought of more in terms of obligations and responsibilities, not competition and markets, he says.
"It's not that ERR drives the market and sets the trend – we were far behind that and the train had already left the station by the time we came along, but we have to reflect all demographics, including the younger people, who are largely online-only. This is not a choice, it's an obligation."
A complementary interview with EML head Merle Viirmaa is here.
*Estonia's current Reporters Without Borders (RSF) ranking is 14th, 10 spots lower than it placed around a decade ago. Factors behind the slide include an editorial departmental crisis at Postimees last year, RSF says, as well as verbal attacks on journalists from members of the ruling coalition, and the influence of Kremlin-sponsored Russian-language propaganda.
Editor: Andrew Whyte