Ukrainians don’t usually pay for online content. Why should they? There has always been a way to bypass a website’s paywall or find pirated movies on the internet.
But that habit poses a challenge for Ukrainian media that strive to survive, much less become profitable, through digital subscriptions.
According to local industry experts, reader revenue is the most straightforward way to make Ukrainian journalism independent from donors and oligarchs, who often exploit the media to promote their personal interests.
If they have enough money, media businesses can develop their own strategies to become competitive and attract new audiences. The quality of their content will also improve, according to Sevgil Musaieva, chief editor of Ukrainian media market leader Ukrainska Pravda.
And the COVID-19 pandemic appears to have given this transition to a reader-funded business model a boost.
For many local media, reader revenue was a powerful tool for survival during the coronavirus crisis as the advertising market collapsed. Readership and digital subscriptions increased during the lockdown because media were the public’s only window to the outside world.
Although subscription growth has tapered off as people went back to work, the media industry believes that the trend to pay for content will endure.
“Sooner or later, (Ukraine’s) media will adopt the laws of the market,” Musaieva told the Kyiv Post. And many changes are already under way.
Subscription pioneers
The first paywall in Ukraine was launched by the Kyiv Post in 2013 because the news business was unprofitable and revenue from print advertising was dwindling. The newspaper wanted to remain independent and retain its staff during the national crisis leading to the EuroMaidan Revolution that drove President Viktor Yanukovych from power in 2014.
Although prominent foreigner newspapers like the New York Times and the Washington Post were already using paywalls, Ukrainian media didn’t follow.
The national media market was too young to become a business back then, according to Andrii Ianitskyi, head of the Center for Excellence in Economic Journalism at the Kyiv School of Economics.
Ukraine’s first independent media started to emerge in the 2000s, following Ukrainska Pravda, which was founded by the investigative journalist Georgiy Gongadze, who was murdered on Sept. 16, 2000, after his reporting angered then-President Leonid Kuchma.
Besides violence, Ukrainian media were harassed for years by the government through intimidation, tax inspections and confiscation of print runs. Even now, 20 years later, Ukrainian journalists are at times persecuted and the country is still considered only “partly free,” according to the U.S. nonprofit Freedom House.
However, the local media market continues to grow and needs resources to cover the news and compete for readers’ attention. Some, like Ukrainian media outlet Vector, attract commercial investments, while others turn to more traditional business models like paid subscriptions.
One of Ukraine’s most popular websites, Novoe Vremya, launched a paywall in February 2020 and attracted over 10,000 subscribers in the first five months, said chief editor Vitaly Sych.
According to Sych, the media cannot compete for advertising with big tech giants like Google or Facebook, so at least some revenue should come from their readers.
As market conditions during the pandemic have become more uncertain, many other Ukrainian media outlets, including the nonprofit Hromadske and popular websites like Liga.net, Babel and The Village, set their sights on reader-based business models.
Ukrainska Pravda went further and introduced a novel membership model where readers become members of the community and receive gifts and discounts from Ukrainian and international companies who partnered with the media outlet.
Toys for oligarchs
Although the internet revolution has long been under way in Ukraine and more media have long gone online, television is still the most popular source of information in the country, according to research by Ukrainian nonprofit Detector Media.
This makes the Ukrainian audience vulnerable to manipulations because over 75% of Ukraine’s national television channels are owned and controlled by oligarchs.
“The owners influence news coverage in their newsrooms in such a way as to promote their personal business and political interests,” said Adrian Karmazyn, the former director of Voice of America’s Ukrainian Service.
Media tycoons in Ukraine rarely adhere to journalistic principles of accuracy, fairness, balance and comprehensiveness that would best serve the public’s information needs, Karmazyn added.
Although Ukraine’s biggest media holdings are controlled by such notorious figures as Igor Kolomoisky, Rinat Akhmetov and Viktor Medvedchuk, half of the local viewers do not care who owns the media platforms on which they rely every day, according to Detector Media.
While local oligarchs are pumping money into their media businesses, Ukraine’s only public broadcaster, Suspilne, remains poorly funded. Public broadcasters have existed in Europe and the U.S. for decades while, in Ukraine, public broadcasting was firmly under state control after the breakup of the Soviet Union or badly funded. Suspilne, created in 2017, hasn’t been able to get the financing it is guaranteed by law since then, Suspilne’s CEO Zurab Alasania told the Kyiv Post.
In February 2020, a court froze the broadcasters’ accounts over the 10.6 million euros debt that Suspilne inherited from its predecessor, the National TV Company of Ukraine. Then the pandemic hit and Suspilne was left with just a $1.2 million budget, which, according to Alasania, is not enough to create high-quality content.
“Neither the president, nor the government can influence the public broadcaster, so they use underfunding to induce Suspilne to their side,” Alasania said.
Restoring public trust
Although there are many ways to turn media into a business, local news outlets sometimes find easy and unethical workarounds. For example, they accept bribes or payments for tailored stories, an unethical practice known in Ukraine as “jeansa.”
Some disguise advertising as news or publish fake but sensational information to attract new audiences.
“Ukrainian media are prone to fakes,” Musaieva said. They often manipulate facts and share messages from anonymous and unreliable sources.
To curtail oligarchs’ influence on the media and fight disinformation, the Ukrainian government drafted a law in January that dictates new standards for media.
Although the law was supposed to regulate the media market, journalists rejected it.
“When the government tries to regulate the media, it is perceived as censorship,” Musaieva said.
The media and the public should fight disinformation and propaganda on their own, she added.
“We also need responsible advertisers who won’t sell their ‘advertorials’” — unlabeled advertisements disguised as news articles — “to journalists,” according to Ianitskyi.
Paid subscriptions are the only sustainable path seen to achieve independent and fair journalism.
“It is one of the most important things that we can do in this age of social media, fake news and alternative facts,” Karmazyn said to the Kyiv Post.
