From leading medium to stopgap?

The Scientific Advisory Board of the German Federal Ministry of Finance is an independent body consisting of 30 professors and chooses its own topics. According to Kai Konrad, Chairman of the Advisory Board, the topic of public service broadcasting was taken up because of its "outstanding regulatory and economic policy significance". The document (which is well worth reading) caused quite a stir in our northern neighboring country at the turn of the year. It came as a surprise and the analyses and conclusions that the financial and economic experts drew from their analyses thanks to an unconcerned outside view were not well received everywhere. The value of the German report does not lie in the new facts that were brought to light - much of it was already set out years and decades ago by journalism research, for example. What is remarkable is the fact that the panel of professors has formulated and substantiated concrete proposals for action for the attention of politicians.

The sentence "the technical reasons that were once used to justify the system of public service broadcasting have now largely faded" applies equally to Switzerland. The transmission towers of the Beromünster and Sottens national transmitters have not only faded, but have been blown up. As a national prestige project at the end of the 1920s, they were the result of an international arms race on the airwaves - and the reason for the founding of the Swiss Broadcasting Corporation, SRG. The model was the British BBC and the actual trigger was the previously established regional radio companies (in Geneva, Lausanne, Bern, Basel, Zurich St. Gallen and Bellinzona), whose transmitters were too weak to trigger radio fever on a broad front. It is clear that creating a sophisticated and functioning radio and later television program was a technical challenge. The report also acknowledges this, but concludes: "The discussion about public service broadcasting and the legal framework for television took place in its beginnings within an institutional framework that has little in common with the situation today."

The German panel of professors then formulates what has long been clear to every media consumer but has not yet influenced state regulation: Thanks to the Internet and the digitization of terrestrial broadcasting, technical restrictions have been removed and information media have emerged that were previously unthinkable. The entry costs for new program providers have "fallen rapidly". The number of possible broadcasters is technically "unlimited" for all practical purposes and the conditions for broadcasting as an information medium have thus been "permanently changed". There is now "a suitable Internet radio station for practically every music preference". At least as far as the provision of music via radio is concerned, "state intervention to ensure program diversity appears to have become superfluous". In addition, the increased use of the internet as an information medium is leading to overlaps between the print and broadcasting markets. Therefore, "there are hardly any reasons why the broadcasting market should be organized significantly differently from the newspaper market", which is characterized by a broad private offering and subscription models. It is also noted that the overlapping of media, e.g. in the case of internet sites, means that "broadcasting is encroaching inefficiently on the existing market territory of the print media".

Subsidiarity principle

In Germany, the federal states and not the federal government are responsible for broadcasting issues. (Thought experiment: Imagine the Swiss cantonal system). In addition, a large number of so-called broadcasting decisions by the Federal Constitutional Court strengthen the position of public broadcasters to ensure free and comprehensive reporting and as a counterweight to private broadcasters. German case law thus stands in contrast to European case law, which regards broadcasting as a service to which the competition rules for companies generally apply. In order to circumvent this contradiction and resolve a dispute with the EU, Germany had to enforce special regulations. The Council criticizes the German case law for being "based exclusively on its own citations" and for not taking into account "economic, social science or other specialist literature". This is because the economic and financial experts attach greater importance to the principle of subsidiarity and would like a sustainable system of public broadcasting to give it more weight. It is a matter of "fundamental economic considerations": The provision of services by the public sector is only legitimate if a corresponding range of services cannot be organized in a private sector-competitive manner, and at the same time the quality of a public service provides sufficient added value in relation to the costs. And so the actually explosive sentence of the report reads accordingly: "Public service providers should only appear where the private sector offer has clear deficits."

However, the experts are not simply pursuing a consistent neoliberal economic course, but see room for state intervention in the market, provided there is "a convincing justification". For example, if access to culturally and politically relevant information were to be restricted due to the exclusive broadcasting rights of pay TV, or if inefficiencies were to be feared due to excessive advertising blocks. The legislator could guarantee free access to particularly relevant information content even without a public service offering by regulating the private offering appropriately.

Tax money instead of advertising

If the subsidiarity principle is to be applied consistently, the professors believe that income from advertising and sponsorship should be "completely dispensed with".

Otherwise, "through the back door", as it were, there would be "false incentives" in program design, which are to be eliminated with public service broadcasting operating on a subsidiary basis. Once the state broadcasters have been transformed from a leading medium into a stopgap, funding should be adjusted accordingly. If public service broadcasting is seen as a good that should be made available to all citizens equally, financing via taxes is "appropriate". This is because, in contrast to the current compulsory contributions (a household levy, similar to the bill that will be voted on on June 14), this would ensure a charge based on ability to pay. Conversely, if the changed technological framework conditions were taken into account, a modern, intelligently designed user fee could be used, which would, for example, follow the subscription model in the newspaper market. Nowadays, subscriptions to individual channels or a pay-per-view system are also technically possible.

Transparency thanks to key figures

In order to promote cost efficiency in public service broadcasting, the Advisory Board believes that greater transparency is "urgently needed" through mandatory publication of standardized indicators. In order to improve the pressure for greater cost efficiency, strong supervision with adequate benchmarks, a move away from pure needs-based funding and greater public transparency are needed. The allocation of funds via competitions increases the chances of innovative broadcasting formats and subscription models for specialized special-interest channels give consumers an exit option and thus send important signals about consumer preferences to broadcasters.

In Switzerland, the demand for more transparency at SRG has also been raised in various motions in the Swiss parliament. However, this request was rejected by the Federal Council on each occasion on the grounds that SRG already provides the responsible department, as the supervisory authority, with sufficient insight into its activities and already goes much further than fully private companies. In addition, the publication of such information could put SRG at a competitive disadvantage. However, the demand for the publication of broadcasting-related standardized indicators has never been put forward.

Christoph J. Walther

About the article series "Medienwende": Media policy is increasingly becoming the focus of political attention, particularly in view of the foreseeable public service debate in the Swiss parliament. This debate must also be initiated and supported by the media industry in the broadest sense. With this series of articles, Werbewoche is contributing to a well-founded discussion.

The following articles have appeared in this series so far: "No help without a foundation", Werbewoche 05/13.03.2015, page 24 f.

Website for the article series: www.medienwende.ch