Public service broadcasters (PSBs) are facing uncertain times, with their remit and funding at the centre of widespread debate throughout Europe and beyond. Governments are taking various decisions about the roles of their PSBs, which impact heavily on both their remit and funding – funding which has traditionally come from licence fees, direct public subsidies and advertising.
In some countries, such as the USA, PSBs have a limited role, impact and funding; in others, such as the UK, PSBs have a critical role and major impact, and thus are supported with significant public resources. Many countries currently fall somewhere in between: in Europe many PSBs depend upon a mixture of licence fees, subsidies and advertising.
However, the digitisation of TV and the increasing diversity of programming – in many cases delivered on digital terrestrial TV but also on satellite, cable, the Internet and IPTV – is leading to the questioning of the role, impact and funding of PSBs. In the UK, the impact of the on-demand service from the BBC, iPlayer, has been substantial: Analysys Mason’s work on the market impact of the BBC’s iPlayer contributed to the UK’s Public Value Test (PVT) of the PSB’s new service. Other countries are also now adopting a PVT to increase transparency in the reform debate.
The French government has gone one step further than the UK and approved a PSB reform that, among other things, halts advertising revenues. This has been effected by replacing advertising revenues with a new revenue source based on a tax of between 1.5% and 2.5% of relevant revenues of commercial broadcasters and 0.9% of relevant revenues of electronic communications operators. In a climate of economic uncertainty and considerable pressure on public financing, other governments could also consider this funding option.
There is also a debate about the role and funding of regional broadcasting, in particular that of PSBs. For example, in Spain, regional broadcasting takes a major role in the audiovisual landscape, challenging state broadcasting and main commercial broadcasters; while in Germany, ARD, the state PSB, comprises contributions from several regional PSBs. In the UK regional broadcasting has traditionally been left to the main PSB broadcasters, principally the BBC and ITV, a situation which is to an extent similar in France and Italy. Although the fundamental arguments of this debate are the same as for national services, the smaller scale of regional channels makes the debate about how to sustain these services in the future all the more pressing.
The implications of PSB reforms could be very diverse, including mergers or radical alterations to remit and revenue sources, and will involve significant debate and negotiation. While the European Commission supports the principles of a clearly defined role for PSBs and financing in line with open market competition, specific reforms of remit and funding are left to individual Member States.
Analysys Mason is highly experienced in the key elements of these reforms including: the need for intervention; the definition of a PSB’s role and obligations; alternative funding mechanisms and the assessment of its public value and market impact at both state and local levels. Our expertise could help define a new PSB business model; explore alternative technological options; model financial implications; or negotiate a revised regulatory framework.