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The Perils of Public Media Funding

In many media markets around the world, publicly-financed news organizations are little more than government mouthpieces. If even a fraction of these outlets' budgetary windfalls were redirected toward independent news sites and broadcasters, journalism would thrive and the public would be better informed.

BUDAPEST – Hungary’s state media corporation, MTVA, operated last year with a budget of roughly $309 million, most of it coming from the government’s coffers. That means that MTVA – which runs television stations, a radio network, and a news agency – had a daily budget of $846,000. For a country of just ten million people, that is the definition of a spendthrift quango.

One might assume that MTVA’s financial strength is an exception in an industry plagued by dwindling revenue and broken business models. But among the world’s state-supported media companies, MTVA’s bloated budget is the norm. In newsrooms from Serbia to South Africa, taxpayer-generated funding is growing. Unfortunately, while this windfall might be putting more programming on the air, it is only deepening the industry’s woes.

Governments have played a major role in domestic media for decades, using regulation of broadcast frequencies and licensing requirements to shape the market. Yet, in recent years, governments have also stepped up their budgetary influence. Today, government budget allocations are among the leading sources of media revenue.

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