If you speak to any American he or she will tell you that public service broadcasting is a joke, but outside America today it remains the most important contributor to TV in Europe, Japan and many parts of the developing world.
Few territories have considered just what it would cost to jettison their public service broadcaster, but as more and more pay TV services join the existing layer of independent TV suppliers which rely on advertising sales, the role of the public service broadcaster is under greater and greater pressure and regulator scrutiny. Right now it is unlikely that organizations like the UK’s BBC, Japan’s NHK, the French France T’l’visions, Germany’s ARD and Italy’s RAI will suddenly become surplus to requirements. Their link to the TV license, which in many cases brings in $ billions, and their central role in TV in these regions (and in many others), is too paramount.
But there is constant scrutiny by legislators and nowhere is this scrutiny greater than in Europe, where each country has an independent player which is trying to invade the territory of a nearby national broadcaster, and where pay TV is taking off not only in cable and satellite, but also in fledgling IPTV operators, while these same territories experience the broadening out of digital terrestrial services, both as pay TV services, but also as more widely viewed free to air services, using the ubiquitous DVB-T system, which has released so many more TV channels.
Now it is the turn of the European Commission to get involved, and in the past it has proved a huge influence in breaking up cozy financial arrangements and subsidies which have made it impossible for the institutions within the 27 countries of Europe to freely compete with one another. For instance the European Commission has been very successful in opening up European Telecommunications environments.
There are complaints that public service broadcasters are defining new broadcast platforms, such as internet streaming platforms, and using their strong financial platform to push through R&D and technology decisions and then harnessing the energy and eagerness of their independent rivals to make their efforts de facto standards. This is in fact what happened on Freeview in the UK, after the ITV independent channel failed completely with ITV digital and went bankrupt, and once again when iPlayer was introduced by the BBC and when Kangaroo was proposed (and defeated). Kangaroo was an iPlayer class streaming service which tied the BBC in with its advertising driven commercial rivals. Much the same is seen with Project Canvas, which is an attempt to standardize a hybrid DVB-T receiver, merged with VoD over the internet, once again led by the BBC, ITV and British Telecom.
Now the European Commission has begun looking at whether or not it is appropriate for a public service broadcaster to lead such an effort. By their very size (TV license revenue is €22 billion in the European Union in total) they tend to have the whip hand, so independent TV operations, mostly far less wealthy, are terrified of going up against a local incumbent public broadcaster. That terror results in stagnation and everyone waiting for the public service broadcaster to take the lead.
As recently as March we ran a piece about a new report from CODA Research Consultancy which reckoned that advertising in the independent sector was about to tail off, and that only the creation of a new internet VoD segment, courtesy of Canvas, could prevent a complete advertising collapse in Europe.
The fear here is that the local governments have tended to closely monitor the broadcasting roles of their individual public service broadcasters, with the local population in mind. Whereas the European Commission will come at this problem from the point of view of wanting to see genuine competition ‘ a major part of its remit.
If the European Commission decides that governments cannot increase subsidies to public services broadcasters beyond a basic minimum, it could stimulate huge investment in the entertainment field in Europe. But at the same time if may bring to an end the golden age of much loved public institutions.
The European Commission says that it wants to ensure that new initiatives like Kangaroo (which was eventually crushed as anti-competitive) comes under the aegis of state aid evaluation. Previously this was considered a separate activity and money spent on things like streaming video was not counted in the European Commission thinking. Under new rules it will be.
‘The Commission’s goal is that the new Communication will help stakeholders to meet the challenges of the new media environment, allowing high quality and modern public service broadcasting, while at the same time maintaining fair competition between different service providers,’ the Commission said in a statement.
The current draft of the revised rules is open for consultation until May 8 and focused on state aid being transparent and accountable and having a separate process to evaluate new services and their impact on rivals; it also suggests allowing public service broadcasters to build up cash reserves to allow them to withstand cost fluctuations, but at the same time, avoid cross-subsidization of commercial activities.
Once it gets this feedback, the Commission will adopt a new Broadcasting Communication directive later in 2009 which all member states will have to adhere to.