08/01/2003

In the majority of European countries, public service broadcasting was originally financed by TV license fees. The cost of these license fees became more expensive as more channels came into being. However there was a problem. When the number of TV sets installed exceeded a given number - and given that just one licence was required per household, no matter how many TV sets were installed there - this source of income became static. An additional licence fee was introduced for colour television sets as a way of creating revenue that would help to finance the growth of the public television service. That notwithstanding, the majority of European governments concluded that advertising would provide a good source of funding since it would obviate the need to increase the cost of TV licences. Each of the countries in the European Union, however, had to come up with a way of financing their TV broadcasting services.
Great Britain and Sweden refused to allow advertising on their public TV channels unlike the majority of the other countries where advertising was allowed under strict limits and controls set up to safeguard the interests of print media and ensure that advertisers could not effectively end up controlling public television.
Austria, France, Ireland, Italy and Belgium’s French-speaking community all settled on mixed funding, using a combination of television licence fees and advertising.
Although both Germany and Holland were attached to the principle of public funding, they saw that advertising revenue was a necessary adjunct to it.
After the privatisation of its third channel, Finland has recently joined Great Britain, Sweden and the French-speaking community in Belgium in banning advertising on its public television channels. Greece has also done the same thing, as a result of the evolution of its television broadcasting market.
Denmark adopted a novel approach by giving the responsibility for its two public channels to two separate bodies. One channel was financed by television licence fees, and the other by advertising revenue.
Spain has never had television licence fees, and they were abandoned in Portugal at the end of the 1980s. These countries have been trying in vain to use advertising revenue to finance their public television services in an increasingly competitive environment.
The various methods of financing public service broadcasting in Europe have evolved as a result of political choices which have been adapted to fit specific cultural and economic requirements. Nevertheless, these methods should conform to EU law. This is why the Amsterdam Protocol has obliged the EU member countries to ensure that their public service broadcasting fulfils its obligations in terms of providing programmes of general, cultural and social interest. The Protocol made clear that it was also the responsibility of each EU member country to define, allocate and organise the aim of its public service broadcasting, and to make provisions for its financing.
The dual broadcasting system is extremely competitive and public broadcasting must respond to the needs of pluralism – particularly within the context of information. This competitive environment means that it is impossible to ignore that an economic equilibrium between public and private operators is necessary. The limits fixed on the extent to which advertising revenue can be used to finance public broadcasting are a result of this logic. It must also be taken into account that, while the output of a public broadcasting service is general, the nature of its activity is specific. This means that it cannot offer a random panorama of different programmes, but that it must provide a range of programmes and broadcasts which are organised in a similar manner in order to satisfy the cultural and social aims pertaining to its task of providing a public service. The EU member countries have taken all this in consideration in order to set up measures to ensure the following:
a. openness in financial dealings with the public authorities, including the direct or indirect allocation of public funds as a result of clear-cut procedures;
b. openness of financial controls and inspections, ensured at national level by measures designed to make sure that the public broadcasting service is fulfilling its obligations and using its resources correctly.

(The article continues below - Commercial information)

The European Commission, in accordance with the principal of proportionality which has to be applied within the European Union and the aims of the Amsterdam Protocol, has to ensure that the financing of public service broadcasting does not have an adverse effect on the conditions for exchange. With this aim in mind, and taking into account the nature of the obligations of a public broadcasting service, the Commission must be sure that the procedures in place in each EU member country result in total openness concerning matters of financing.
At the end of the 1980s, the EEC countries had set up broadcasting systems in which the balance between public and commercial broadcasting would satisfy the expectations of the “citizen viewer” and the “consumer viewer” – i.e., all viewers.
In the age of analogical broadcasting this equilibrium ensured a degree of novelty, as well as cultural diversity and the pluralism of opinions – all of which formed the basis of one of Europe’s most precious resources. It is now the duty of public and private broadcasters, as well the authorities in EU member countries and the EU as a whole, to use what has been learnt in the past in order to plan for their digital future. This will be the subject of my next article “Digital broadcasting: building the future”.