Hungary: competition authority report on electronic media sector

Competition in the electronic media sector does not require any new procedures or special regulations, according to the Hungarian Competition Office’s final report following its enquiry into the sector last year.

The enquiry focused on TV broadcasting (wholesale and retail markets), TV advertising, the transmission conditions for channels and the sale of TV adverts.

In its report, the HCO stressed the need for prompt action to speed up digital switchover and for new regulations for the audiovisual market reflecting professional research.

TV Broadcasting

The HCO’s key findings were:

• cable-broadcasters are now less likely to refuse unreasonably to broadcast certain channels has due to increasing competition between broadcasting platforms
• more intensive competition is needed between platforms to eliminate problems for broadcasters in accessing transmission networks in the long-term, which digital switchover may help to bring about
• further delay in digital switchover would hinder competition and have unfavourable consequences for consumers
• regulations may be needed to overcome the contract negotiation problems currently preventing some channels from participating in the new digital platform
• to ensure fair competition, current regulations need to be revised to remove limits on establishing channels, so that even nationwide channels can acquire a decisive influence in other broadcasters

The TV advertising market

HCO decided that there was nothing objectionable about the two major nationwide commercial channels having a 90% share between them of the TV advertising market but only a 28.4% and 23.6% audience share respectively.

HCO decided that no formal procedures or special regulations were required in response to the bonus and other special rebates applied by the two major commercial channels when selling advertising but that these could still be invoked if required by a change in practice changed or new information.

In reaching its conclusion, HCO took account of:

• the specific characteristics of the advertising market and the effectiveness of other bigger channels
• the special advertising possibilities available from the two major commercial channels but not the small and thematic channels
• the possibility that greater advertising revenue was reflected in larger investments in programmes to be broadcasted
• a significant over-demand for advertising slots on the two major nationwide commercial channels justifying their higher revenues
• the market’s general characteristic that the most popular media are generally overrated by advertisers

Audience research

HCO recognised that the conclusions of its report and enquiry could be distorted if there were any defects in the research methods used to gather audience data. HCO found that limited information was available for small or thematic channels, which limited their opportunities for advertising.

HCO proposed that an audience research company be selected by public tender to carry out research into viewing figures for the whole market, especially as the results might be used by state bodies when drawing up state regulations.

Source: Media Sector Enquiry Report of the Hungarian Competition Office; www.gvh.hu (only available in Hungarian so far)