The media market
Ukraine's economy was the second largest in Soviet Union, dominated by its inherited massive heavy industry. But similar to other post-Soviet territories, the transition towards market economy proved cumbersome. The 1990s were marked by hasty, large scale privatisations of heavy industries which didn’t always go well and smooth as those times were marked by chaos following the disintegration of the old system. Those few who managed to take control over large factories rose to become country’s oligarchs and have expanded their influence in other sectors, including, finances, agriculture, services and the media ever since.
Ukrainians remain to consider themselves fortunate of having the world’s most fertile, mineral-rich soil, ‘chernozem’ (black soil) and agriculture has always been a significant sector in Ukraine, although soil erosion is reported to become an increasingly relevant problem. Until recently Russia was Ukraine’s largest trading partner, which is now replaced by the EU. The country actively exports to other CIS countries.
According to the World Bank, GNI of Ukraine is about USD 112.5 billion, or USD 2620 per capita. Currently, the minimum wage in Ukraine is UAH 1450 (about USD 55) and the average estimated at around USD 200.
At present, the economy is undergoing critical times, which is caused by its critical dependence on Russia’s energy supplies, the loss of control over the most industrialised parts of Ukraine in the East due to the Russia-Ukraine conflict and the annexation of Crimea. Corruption contributes to the unhealthy state of economy also, with a significant share of a parallel ‘shadow’ economy.
Like other sectors, the Ukrainian media market did not entirely transition into a financially successful, independent and pluralistic commercial sector. Mostly, media outlets remain unprofitable and dependent on their owners’ sponsorship, who in turn do not regard their media businesses as primary sources of profit but rather as a tool to articulate their political preferences and to protect their economic interests. The Economist places Ukraine in the top five countries with the so-called crony capitalism, an economy in which there is a close relationship between big business and the ruling political elite. As Natalia Ryabinska, Ukrainian academic, who writes about media sector, notes: “the most prominent media owners in Ukraine are industrial and financial magnates with good political connections [whose] main interests are outside the media sector”. Their interest in controlling the media is preconditioned by “Ukraine’s weak state, unreliable institutions, and lack of rule of law”. Furthermore, Ryabinska demonstrated Koltsova’s distinction between two types of media ownership in contemporary Russia, which can be applied in Ukraine also: that of “internal” and “external” ownership. Internal owners, are primarily interested in their media businesses’ financial success and profitability, whereas external owners focus on “their political capital or in the development of other kinds of businesses for which they need the resource of mass media as an advertising and propaganda channel.” Thus, external owners would try to control content far more than the internal owners. Other sources of income for media outlets include hidden political and commercial advertising – “Dzhynsa”, i. e. paid content which appears as a regular edited material. See more in the article on Dzhynsa. Generally, financial information on media businesses is not available to the public.
The World Bank Database. Retrieved in October from: http://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=UA&name_desc=true
24 Mar 2014. The countries where politically connected businessmen are most likely to prosper. The Economist. Retrieved in from: http://www.economist.com/news/international/21599041-countries-where-politically-connected-businessmen-are-most-likely-prosper-planet
2014. Soil Fertility to Increase Climate Resilience in Ukraine. The World Bank. Retrieved in October 2016 from: http://www.worldbank.org/en/news/feature/2014/12/05/ukraine-soil