Serbia is a country with a small and relatively open economy, undergoing transitional processes from a planned to market-based economy for more than two decades. The economic system was seriously shaken by the disintegration of Yugoslavia and the wars of the 1990s, as well as economic sanctions in the period 1992-1995. After the removal of former Yugoslav President Slobodan Milošević in 2000, Serbia began economic reforms and a liberalization of its market, experiencing relatively high economic growth which only slowed with the onset of the global economic crisis in 2008 and 2009.
The general economic trends are reflected in the media sphere as well. The economic crisis brought a lowering of advertising budgets (the advertising market is worth around €170 million annually), while around 2,000 registered media rely on the help of the state. Data from 2017 suggests that the state, through various transfers, participates with at least 6.1 billion Serbian dinars, which is an increase relative to 2016 when its participation was around 5 billion dinars. When it comes to state aid, the greatest share (around 5 billion dinars) is directed towards subsidising the public service broadcasters RTS and RTV, as well as ethnic minority media in the Vojvodina province, while the rest of the money is distributed through public tenders for the production of media content (around 1 billion dinars) and the public procurement of media services.
The co-financing of content production projects, whose main aim is to improve how well informed citizens are, is the main mechanism which the state uses to grant budgetary funds to the media. This mechanism of financing was introduced in 2014 (with implementation beginning in 2015), after the adoption of a set of media legislation. It is estimated that around 1 billion dinars of public money is spent in this way annually. After four years of reliance on this funding mechanism, numerous problems which pave the way for corruption have been observed. Some of these relate to the problem of defining the public interest at the local level, problematic procedures for allocating funds, professionalism and conflict of interest issues among the members of various funding commissions, and poorly defined mechanisms for ranking and monitoring the implementation of projects.
A second source of revenue for the media is that which comes from state advertising. For years, state institutions and public companies have been among the biggest clients in the media advertising market in Serbia. It is estimated that through public procurements alone around half a million dinars is spent annually. This type of economic dependence has allowed politicians and those in power to influence the editorial policies of numerous media through the allocation of state advertising.
What makes this situation even worse is that, thanks to the close ties between private business and politics, the ruling elites have often been in a position to decide how the advertising budgets of private companies will be channelled through the non-transparent contracts of marketing agencies.
Aside from direct payments, the state has other mechanisms for indirect assistance to the media at its disposal. In the report on the media published by the Anti-Corruption Council on February 20, 2015, it was noted that the state had various forms of transfers, debt write-offs and special treatment for different media, which related primarily to the payment of taxes and fees to regulatory bodies. As a rule, various deductions and support are available to media which support the current government through their editorial policies (e.g. loans granted to the Pink International Group), while critical media are mainly targeted by tax inspectors (the latest example are Južne Vesti, as well as Vranjske Novine and Kikindske Novine).
The Serbian media scene has still not completed the process of transitioning from state to private ownership. In an effort to make them more independent from the influence of the state and increase professionalism, the media underwent two waves of privatisation – in the period before 2008 and then in 2015. The status of the Tanjug news agency remains unresolved, which continues to function in a legal vacuum, while the state also has a stake in the daily newspapers Politika and Večernje Novosti. Government ordinances have also returned the formerly privatised RTK from Kragujevac to the competence of the local government.