From public TV broadcasting monopolies to dual systems
The Netherlands: Public broadcasting service was created in 1919 by a group of enthusiasts. This phenomenon resulted in an original system: the State took charge of the network and airtime was shared between listeners’ associations, which used their members’ contributions to finance their programmes.
This format continued after the end of the Second World War and was also adopted for television broadcasting in 1953. The NOS, a public company, provided news broadcasts, sport and educational programmes. It shared the programme schedule with viewers’ associations which received concessions for blocks of airtime. The NOB was responsible for running the broadcasting network.
At the end of 1989, when the Television Sans Frontières directive was implemented, the Commissariat aux Medias (the Media Commission) authorised the first commercial television channel, which was to be broadcast on the Dutch cable network. This channel was RTL-Veronique, which was transmitted to Luxembourg via satellite and then rebroadcast via cable. It later became RTL-4.
The Dutch broadcasting market has since become – along with the German market – one of the most competitive in Europe. There are ten national television channels, of which three are public. They compete with each other in a country which has 6.3 million households – and these households have access to about twenty cable channels, about twelve of which are foreign channels watched by 18 per cent of Dutch viewers. Viewing share and advertising revenue in the public sector are gradually shrinking in the face of strong competition from the private channels, which have the advantage of a high performance production industry to back them up.
In spring 1994, a law on the media was passed with the aim of improving the competitiveness of the public television sector, without raising the question of the orientation of the programme content of the individual channels(1). In January 1996 there had been an amendment to the law authorising sponsorship, so the public channels had benefited from extra revenue: despite this, they did not stand up to the competition very well. The Dutch Government wanted to strengthen the public television service, which it saw as an important factor for social cohesion and an equally important source of information. It thus decided to alter the structure of the public television broadcasting sector by appointing a single Board of Directors(2), which would be responsible for developing additional programmes for the three public channels according to the recommendations of the Ververs Commission.
In 2000 the public television service lost the right to use television license fees as a means of funding, and its financing became a matter for the State budget. When the time came to renew the concessions in the public television sector, the associative system was abandoned in favour of making the NOS the single operator in the sector.
Denmark: In 1988 the Government put and end to the monopoly held by the first channel, Danemark Radio, and created a public duopoly. The second channel, TV 2(3), was run by an independent public company which derived the majority of its financing from advertising. In addition to the terrestrial television broadcasting duopoly, a number of private cable channels were authorised.
Finland: YLE 1, the first television channel, began broadcasting in 1957. It was run by “Suomen Yleisrado” (YLE), a public broadcasting company. YLE 1 shared airtime with MTV, a commercial channel which leased blocks of airtime and which depended on advertising revenue for funding. This arrangement continued when a second public channel was set up in 1964 and a third in 1987.
By 1993 MTV was using 38 per cent of the airtime on the three public channels. The Government privatised the third channel to the benefit of MTV 3, which had 42 per cent of the Finnish viewing share in 1998. A second commercial channel, Kanal 4, was authorised in 1997.
The Finnish broadcasting scene underwent considerable upheaval due to advances in technology and mergers between operators in the sector. The public television service needed to be repositioned due to the event of the “Information Society”, so in 1994 the Government changed its legal structure so that its capital could be opened up. State financing was reduced to 70 per cent.
Sweden: Until 1990, Swedish broadcasting was run by Sveriges Radio AB, a holding company with the status of a Foundation. Its capital was divided between private shareholders, industrial groups (20 per cent), press bodies (20 per cent) and the public sector (60 per cent) - primarily popular national movements in the latter case. The public broadcasting service in Sweden was financed by television licence fees and subsidies. In 1991 three Foundations were set up to take control of the sector: SVT was responsible for the two television channels; SR, Sveriges Radio, was responsible for radio broadcasting and Severige UtbidningsRadio was responsible for educational radio and television. Broadcasting services were provided by three wholly-owned limited companies which were affiliated to each of the Foundations(4).
The Swedish Government was finally forced to
In 1995 Parliament ordered the SVT to reduce its budget by 11 per cent over three years. Then a law which was passed in June 1996 forced it to increase the ten regional television stations’ own programmes from 40 per cent to 55 per cent and to commission more programmes from independent production companies. This measure lead to a reduction of 10 per cent in personnel and to a restructuring of the organisation, which was designed to strengthen its competitiveness.
Great Britain: The BBC was allocated the broadcasting monopoly in Britain in 1936. In 1943, Lord Hankey was told that he would be responsible for organising the relaunch of television services after the Second World War was over. He raised the question of prolonging the BBC’s monopoly – which was provisionally renewed in 1946, with a licence to run until 1951.
This licence, along with the BBC’s Charter, was renewed in 1952. The Conservative Party, however, and decided to make provisions for setting up a regional television service. Subsequently, the 1954 Television Act created the Independent Television Authority, which put an end to the BBC’s monopoly.
This meant that a duopoly had been created for public service television in Britain(7), in line with the functional criteria for a public service. Consequently, the working structures of the BBC and the ITA were quite similar: they both had a Board of Directors made up of twelve Governors, who appointed the Chief Executive Officer.
The ITA, however, proved to be flexible in its task of providing a public service. This flexibility was designed to allow the new Independent Television (ITV) companies to establish themselves and to develop popular programmes. Although the BBC adapted itself in the face of competition, by 1960 it had only a 35 per cent viewing share. The Government was worried about this situation, so in 1962 it appointed Lord Pilkington – the head of the Bank of England - to carry out a study of commercial television and provide guidelines for the future of television in Britain. Lord Pilkington criticised the laxity of the ITA, holding up the BBC as an example. He recommended that the ITA should be responsible for organising commercial television(8) and that the BBC should set up a second television channel. His recommendations lead to the creation of BBC 2 in 1964, which left BBC 1 free to concentrate on more popular programmes.
Thus began the golden age of television in Britain. At the beginning of the 1970s, the BBC and ITV split the viewing population equally between them. (BBC 1 = 40 per cent, BBC 2 = 10 per cent). Yet it was difficult to maintain this steady equilibrium, as ITV had much greater resources at its disposal than did the BBC(9).
Margaret Thatcher’s government saw the BBC as the incarnation of the values of the British Establishment – and they were not very happy with its performance. Consequently, in 1986, economist Alan Peacock was asked to compile a study of the future of television in Britain. He published his report in 1987 and confounded the Government’s expectations by taking sides with the BBC and criticising the independent television network. Peacock was totally against the idea that the BBC should be financed by advertising revenue. He recommended that the licence fee should be index-linked to the price index – which took effect from 1988 – and suggested introducing pay-TV services on the BBC’s two channels(10).
Peacock’s report was as critical of the practices of independent television as it had been vis a vis ITV. The main issue was that the independent companies were abusing their control of the television advertising market by charging incredibly high rates to their advertisers. Peacock recommended introducing an element of competition in order to break this advertising monopoly. He suggested breaking the links between ITV and Channel 4 and putting ITV’s regional concessions out to tender in order to open up the broadcasting market to new operators. He also advocated that 25 per cent of the airtime on both ITV and the BBC’s two channels should be given to broadcasting independent productions, as this would encourage the growth of the production industry in Britain.
The 1990 Broadcasting Act implemented most of Peacock’s recommendations. The legislature put an end to the broadcasting duopoly by depriving ITV of its monopoly on commercial television – which it shared between three national terrestrially broadcast channels. These were: Channel 3, which included morning television and the 14 companies which held the regional television concessions; Channel 4, an independent public trust, and Channel 5. The commercial television regulating authority was relieved of its responsibilities for network management, provided by the IBA(11). A new regulating authority, the ITC(12), was given responsibility for the entire private television service in Britain – whatever the means of broadcasting might be. All private stations had to obtain a broadcasting licence or an authorisation to broadcast.
Although the BBC’s licence and royal Charter were renewed in 1996, the Corporation was suffering from the effect of upheavals on the British broadcasting scene. As underlined in a Green Paper on the public television service, which was published on November 25th 1992, it had to adapt in order to face new challenges and increase efficiency. This recommendation lead to profound changes within the BBC, which meant that it was in a position to face up to growing competition and develop new services aimed at fulfilling its obligations as a public service in the digital age.
At the beginning of the 1980s the dual system, which meant that public and private broadcasters worked side by side, had become the general rule in Europe. The way in which the structures of the various public television services had evolved within this system had had some repercussions for how these services were financed.
(1). - Each of the three public channels broadcast specific types of programmes: Nederland 1 concentrated on ethics and morals, Nederland 2 on the family, Nederland 3 on culture and information. The NOS’s broadcasts, sport and educational programmes were broadcast on all three channels.
(2). - The Board of Directors was made up of three members, who were responsible for developing strategy and planning programmes for the three public channels - each of which was headed by a coordinator. A watchdog committee represented the associations which were responsible for the programme schedules.
(3). - The Minister for Communications appointed five of the eight members of the Board of Directors. The task of the Board was to produce and broadcast regional television programmes and to set up regional bodies, each of which had its own Board of Directors.
(4). - Two mutual subsidiary companies completed the scenario: RIKAB was responsible for collecting the license fees to be credited to the “Broadcasting Fund Service” at the Ministry of Finance; SRF was responsible for mutual services and was organised into three departments: RTH (health and industrial medicine); SRTVF (buildings) and SRFA (enterprise committee).
(5). - The commercial channel was allocated to Nordic TV/TV 4 in November 1991. It had to broadcast “a considerable proportion of Swedish programmes” and be representative “of the various sectors in Swedish society”.
(6). - The Kinnevic Group’s TV 3, SBS’s Kanal 5 and two pay-TV channels, TV 1000 and Canal+Nordic.
(7). - The task of the Independent Television Authority (ITA) was to provide television programmes in the form of a public service, which would cover news, education and entertainment. The ITA was replaced by the Independent Broadcasting Authority (IBA) in 1974, following the authorisation of private radio stations.
(8). - Great Britain was divided into 14 regions, which corresponded roughly to the BBC’s broadcasting regions. The ITC allocated television broadcasting licences in each of these regions, apart from London – where two companies provided broadcasting services, one during the week and one at the weekend. The broadcasting licences were accompanied by detailed guidelines which were designed to ensure that ITV fulfilled its task as a public service provider and that its production was in brought in line with that of the BBC.
(9). - In 1968 the BBC’s budget was Pounds 54 million, while ITV’s budget was Pounds 100 million.
(10). - In the autumn of 1998, the BBC began broadcasting encrypted programmes/a pay TV service at night for doctors, paramedics and medical students.
(11). - The ITC was financed by independent television companies and employed about two hundred people in London and its regional offices. Unlike the IBA, it did not take part in the operation of Channel 3 – nor did it play any part in its programme schedule. Its role was to make sure that television programmes conformed to the relevant legislation and to the television broadcasting licences, as well as to an ethical code for broadcasting which had been established by the Broadcasting Standard Council (BSC). The technical infrastructure for broadcasting and transmission, which had previously been run by the IBA, was allocated to a private company – National Transcommunication Limited (NTL). NTL was created in 1991, with a capital of Pounds 70 million, in order to provide private radio broadcasting and the transmission and broadcasting of terrestrial television.
(12). - The role of the ITC was to authorise and control all the private television services which were broadcast in or to Great Britain (terrestrially, by cable or via satellite) even if these services did not use any of the frequencies allocated by the British authorities. All satellite channels which were broadcast in Britain via non-domestic satellites (NDS) – such as BskyB, which was broadcast via ASTRA, the Luxembourg satellite – had to obtain authorisation from the ITC, using a simplified procedure called “licence for non domestic satellite”. Any television stations which broadcast to Britain from abroad had to apply for authorisation – Licensable Programme Service (LPS) from the ITC. If this licence were not obtained, the ITC could ban the sale of the necessary decoding systems in Britain. The ITC could also ban British cable companies from picking up programmes broadcast by non-licensed companies, as well as the sale of advertising time in Britain.
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