Media as a Business

Any media company is formed to make a certain effect on an auditorium, to form public point of view. Besides, in case money is put in media, it becomes a business.

Unfortunately in Georgia in most of the cases media is created to make influence rather than make money. business is not being implemented in media nowadays, it is not viewed as a type of business that primarily results both on professional and independence level of media. Media is formed and funded by a specific person’s financial sources just because someone would like to implement his/her own political interest. This is not a business and can not be viewed as means of production. We can not claim that a media as a business exists in Georgia, although there are some exceptions, like: publishing house ‘Kviris Palitra”, Holding ‘Georgian Times’, radio ‘Fortuna’ with four radio stations. The situation is even worse in Televisions’ activities. There is not a single business based TV in Georgia. Mainly they are subsidized media organizations, that makes negative impact on their independence level, as well as media market, advertisement market and its dumping prices. All the above mentioned prevents the development of media as a type of business. So called Prime –Time for Georgian TVs is significantly cheaper than for those of our neighboring countries. For instance, in Ukraine a minute in prime-time costs USD 17-25, while in Georgia it costs USD800-1200. the significant difference has been caused by the subsidized character of TVs. No one bothers to increase incomes. Advertisement dumping on Televisions leads to the lack of publicity in printing media. Advertising fees are cheap due to the fact that television is not an independent business and financial organization. In case the media means work with their own financial sources, advertising fees will increase 5 – 6 times more. In countries of free industrial environment about 70-80 percents of media incomes are of advertisements. 20 percent of sales, sometimes even 15 percent. Georgian media will be developed with totally different rates if it is oriented on advertising sales. For instance, in Tambov, Russia, a place not even being a part of economically developed hundred cities, advertising market income reached USD 65 billion for the year of 2000 while in Georgia the indicator was USD 10 million.
Today in Georgia advertising market income reaches about USD 17-18 million including external advertising. Although it is absolutely necessary to plan media from the very beginning so that it works as a business.
The planning process begins after goods, auditorium and market have been studied and the most important thing – advertising strategy has been worked out.
The basis of media business is advertising! It is necessary to define major parameters and principles of an advertising campaign: plans for historical aspects and principal objectives, adopting and understanding relevant theory, analyzing outcomes following the theory, planning campaign, meeting individual expenditures’ and received income’s aims, accepting and realizing possible analysis, analyzing target auditorium, Mass Media Selection and Analysis, effective cooperation between international communities and different media, analyzing mass media’s pros and cons, working our criteria for defining campaign’s achievements and estimating both the theory and the program itself. The higher advertising budget, the more media planning responsibility. Planning media requires intellect, experience, ///, Media plan should be followed by informative message. Quite often it happens just opposite that leads to less effective advertisements. Media planning should be done through professionals – these people are rare and accordingly it is expensive to hire them. As for Georgia, all that matters here is the low price.
There is no information on media incomes and expenditures in Georgia, although it is said that a significant part of electronic media is subsidized and cant be independent. Only a small part of press is profitable, others find it really hard to survive.
Newspaper ’24 Saati’ (24 hours) business is more or less developed, advertising incomes makes up 60-65 percent of its major part. State order is about 25 percent in a form of tender statements.
‘We have quite precisely defined target auditorium that has a positive effect on advertising customers’ – constituent of the newspaper ’24 hours’ Mr. Paata Veshapidze states.
According to the constituent of radio ‘Utsnobi’ – Basa Janikashvili ‘The radio has its budget, development plan, goals and strategies, that is what I would like to see generally in Georgian media’.
Budget of radio ‘Utsnobi’ increases annually. it reached GEL 1 million in 2007. Radio ‘Utsnobi’ aims to increase the figure with 30% this year. Advertising incomes make 98% of the total income.
– How can media turn into growing business and what are perspectives in this direction?
– ‘First of all, media should be declined patronage of financial and political groups. When it happens it will be forced to keep itself. It will start intensive participation on the market. Competitive environment will be improved as a result that will encourage development of business’ – Paata Veshapadze stated.
Only a few media managers really understand that they run specific business: media has an opportunity to double sell its products. Media sells a thing, a product and at the same time it is able to sell the auditorium, who bought the product. As is seems, it is quite difficult to develop in Georgia. As a rule journalists participate in media a lot, while marketing is such an important issue for business.
Some player (users) will have to leave media market in case media begins to develop as a business in Georgia. Natural relaxation will start and even then competitiveness will have to define who stays and who leaves.