Future of Europe’s $36bn PSB Doubts Over Licensing Fees – Deadline

The funding model that has been the foundation of Europe’s €35.5 billion ($36.3 billion) public broadcasting sector for decades is under threat and the industry is gravely concerned.

Last week, legislation was introduced in the French parliament that will scrap the license fee, radically changing the way the country’s public broadcasters (PSBs) are funded and leading to potential government interference and instability. In Britain, the 100-year-old funding model is being scrutinized by a Conservative government that is no friend of the PSB and, arguably, ideologically opposed to it.

Noel Curran, chief executive of the European Broadcasting Union (EBU) and former chief executive of Irish broadcaster RTÉ, warned of a domino effect on the PSBs of smaller countries if powers like the UK and France are seeing their funding models weakened, which could threaten the very existence of public broadcasting in Europe. Employees of French public television and radio have been on strike in recent weeks.

“France and the UK are two of the largest public service media entities in Europe, so these changes are bound to have implications elsewhere,” Curran told Deadline. “Dramatic changes in funding models are always a concern, especially in European countries where there is not the same history of independent media.”

According to the EBU, European broadcasters generated €35.5 billion in 2020 – a 7% decline in real terms over five years – and 60% came from countries that use a royalty model, which sees every household pay between 100 and 200 dollars per year in order to access PSBs.

The model has been widely hailed over the decades for its independence from government and that very independence is under threat from President Macron’s new funding plan, which will see France Télévisions, Radio France, Franco-German broadcaster ARTE and international television channels funded by Value Added Tax Revenue (VAT) which will bring in just over 3 billion euros ($3.1 billion), roughly the same level of funding as the current level .

Although politicians on all sides of the center-right-dominated upper house took umbrage for various reasons, French senators approved the controversial legislation this morning, according to the Deadline report.

While the EBU is “waiting to see exactly what the full mechanism will be”, Curran said his team was “very, very worried” when Macron’s legislation was first introduced because, among other things, “we don’t know not how independence will be preserved”. .”

An amendment has already been tabled to ensure that the new funding mechanism remains in place for only two and a half years and it may require regular renewal, meaning that any new or current government can change it at will, or remove it altogether. . This government could pressure news networks to report a certain way or risk losing money, a dangerous precedent that is largely prevented by the royalty system.

Potentially having to renew the funding model on a regular basis will also impact public broadcasters’ ability to plan coverage of major public events such as the Olympics in advance, according to Claire Enders, who runs the influential company. from British media Enders Analysis.

Enders pointed out that the new model could also hamper innovation, as public broadcasters will find themselves unable to forge strategies in areas such as technology, VoD and data if their funding is not set at long term.

“The new model keeps the show on the road, but there’s no wiggle room for future engagement,” Enders said.

“This is an extremely short-sighted decision. Watch how the BBC transformed the 2012 [London] Olympic Games into a global performance, boosting tourism in the UK and making a huge financial contribution. The BBC had been planning this event for years.

The move comes at a time when French broadcasting is “held in very high regard”, according to Curran, who pointed out that national television and radio were playing “a much more important role across Europe more generally”. France Télévisions CEO Delphine Ernotte-Cunci is the current president of the EBU, for example, and has been warmly received across the continent, most recently speaking to a packed Lille auditorium at Series Mania, in during which she passionately advocated for the now derailed royalty. system.

What about the UK?

Meanwhile, the continent is grappling with a cost of living crisis – an issue from which PSBs are by no means immune but which is being used by some skeptics as an argument to take money away from them and putting it back in the pockets of ordinary citizens – while deep-pocketed American streamers are causing super-inflation in the TV market that shows no signs of abating.

In the UK, a deferred review of the future of the license fee after 2027 is set to begin in September, once a new Prime Minister is appointed, and it could upend the model that has so boldly supported the BBC over decades. .

The deadline understands that the review could be extended from the originally scheduled six months to a year as the government thoroughly examines the alternatives and grapples with numerous questions.

Outgoing Prime Minister Boris Johnson’s Culture Secretary Nadine Dorries, a BBC skeptic, ordered the review and rumors abound that she could be put on trial if the favorite to replace Johnson, Liz Truss, wins the racing, potentially in an expanded role. . Dorries’ biggest decision since taking office was to freeze licensing fees for the next two years in one fell swoop, costing the company hundreds of millions of pounds a year.

The EBU is always open to new funding models, but the problem in the UK is the lack of an alternative, Curran believes. Subscription models, ad-based models and progressive taxes have been thrown around, but with little evidence or savvy to back them up.

“The rest of Europe is confused and perplexed by what is happening in the UK,” he added. “They look at the BBC with its enormous audience, quality, impact and brand and are amazed that the model that delivered this success is being questioned.”

Enders pointed to the soft power credentials of the BBC, which reaches around 500 million people worldwide a week, at least five times that of French broadcasters, she said.

“The British system is gigantic and the French do not have quite the same understanding of the role they play in the world,” she said.

While Curran remains concerned about the domino effect of developments in France and the UK, there are small green shoots.

In Ireland, the government recently accepted 49 of the 50 recommendations made by a commission on the future of the media concerning public broadcasting, rejecting only one: to abolish the license fee, which will remain the source of funding.

And in Australia, admittedly far from Europe, the Labor Party recently installed by Albert Albanese has proposed a widely acclaimed five-year funding plan to prop up national broadcaster ABC.

Whatever happens, maintaining independence, universality and transparency is essential for Curran’s EBU, and industry watchers remain gravely concerned about what lies ahead for their public broadcasters, the foundation of the mainland television system.

Next steps in the UK and France may determine the sustainability of this very foundation.

Mary I. Bruner