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Well, you did ask "How many countries actually made the finals that we're actually 'In Europe'?". As I said I think only about 4 out of the 43 participating were actually not on the continent of Europe. The competition is run by the EBU, the European Broadcasting Union and looking at their website, it boasts a membership from 56 countries "in and around Europe", including Algeria, Egypt, Jordan, Morocco, Tunisia as well as the four countries I've already mentioned. To quote from their membership conditions

"Active membership of the EBU is open to broadcasting organizations or groups of such organizations from:

a member country of the International Telecommunication Union (ITU) situated in the European Broadcasting Area as defined by the Radio Regulations annexed to the International Telecommunication Convention, or a member country of the Council of Europe which is situated outside the European Broadcasting Area"

They make the rules for eligibility, so it's their toy train.
 
As for political allegiances, they've been around since the year dot, for example, the Scandinavian nations giving each other votes. To an extent it's understandable where there are cultural links. Britain doesn't have the same "club of allegiance" to draw on, nor, for that matter do, say, France, Germany or Italy.  What's made it much more noticeable (and possibly unpalatable) is the number of countries from the former Eastern Bloc, the power they wield and how they can distort the voting. Austria declined to take part this year, according to the European Song Contest site, 
 
        political questions about the semi-final organisation of the contest are at the root of their decision to not participate this year.
 
The issue of a sense of humour is an interesting one - my take on the British position is that we start off hoping we'll make an impact in the next contest and when we don't do so wel, we deride the whole contest. As I said in another post, it was inevitable that, as the number of entering nations increased, the odds of success for any country were lessened, what swung it was the "political" voting. Maybe the answer lies in how the "pots" are allocated in the semi-final runoff contests.
 
It's still a big contest (whatever you or I think about it), in terms of the number of listeners and viewers the ESC achieves. Even Austria, who before the contest were saying that the interest within their country was declining, had massive viewing figures.
 
A
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