TV distributors threaten the existence of Swiss TV stations

Time-shifted television is being used more and more every year and accommodates the individualization of television consumption. Among viewers aged 15 to 59, time-shifted television rose from 8% in the first quarter of 2013 to 20% in the first quarter of 2016. It has more than doubled within three years and will continue to rise in the future. Time-shifted television was made possible by offers such as those from Swisscom or UPC, which allow viewers to skip commercial breaks. And online TV platforms such as Zattoo, Wilmaa or Teleboy with names like "Replay", "Recall" or "Comeback" offer their users the opportunity to watch all programs for up to seven days without having to record the individual programs themselves. As a result, 59% less advertising is seen on time-shifted television than on live TV. This destroys advertising revenue and the broadcasters lose money. In 2014, the loss of revenue from advertising amounted to CHF 45 million and in 2015 even CHF 67 million. A loss of CHF 123 million is expected in 2017.The survival of TV stationsAndrea Werder, Deputy Managing Director of the IRF Interessengemeinschaft Radio und Fernsehen association, explains: "This means that advertising-financed TV stations will lose important income that they need to produce their programs. In the long term, this means that the free TV stations financed by advertising cannot survive."Negotiate conditionsSwitzerland is the only country in which cable network operators and TV platforms can acquire the copyrights for these archive services with the entire program of all TV channels from a collecting society at a regulated price. The TV broadcasters do not negotiate their TV rights with the TV distributors themselves, as is the case abroad. Instead, the collecting societies negotiate the conditions and the tariffs must be approved by the Swiss Federal Arbitration Commission (ESchK). Time-shifted television is regulated in the so-called Common Tariff 12 (GT 12), which is valid until the end of 2016 and stipulates that TV broadcasters pay CHF 1.50 per month and customer if they allow them to watch the programs freely for seven days and skip the advertising. Digital TV distributors are free to set their own prices for customers. The major telecommunications providers such as Swisscom, Sunrise and UPC sell time-shifted television as part of their bundle offers. Payments for the rights to catch-up TV go to the collecting societies and amounted to CHF 18.9 million in 2015; a small proportion of this is passed on to the TV broadcasters. "For 2015, the broadcasters received CHF 5.4 million from the collecting societies, which is disproportionate to the loss of revenue of CHF 67 million," explains Andrea Werder. The associations of TV distributors and the collecting societies have agreed on a new proposal for the new tariff, which is to apply from 2017, which they have submitted to the ESchK for approval. The proposal provides for a minimum increase of 10 centimes per user per month.Party status requiredThe broadcasters have tried to include their conditions for catch-up TV in the negotiations between the collecting societies and the associations of TV distributors. They have not succeeded with a single demand. They are demanding a partial abolition of the rewind option, the retransmission of their own interactive offerings to viewers, a restriction of the search and find functions as well as remuneration in line with the market.The advertising-financed TV broadcasters of the Interessengemeinschaft Radio und Fernsehen (IRF) have therefore joined forces and want to assert their rights better against the TV distributors and make themselves heard before the ESchK. They include all major German private broadcasters such as RTL, Pro7 and Sat1, SRG as well as 3 Plus Group, AZ Medien TV and the regional and local private TV broadcasters in Switzerland. With their submission of August 19, 2016, they demanded party status in the proceedings.