14 March 2008
Responding to the Commission’s Communication on the Application of State Aid Rules to Public Service Broadcasting, the European Publishers Council (EPC) representing Chairmen and Chief Executives of Europe’s leading media corporations, has today welcomed the review of rules for Public Service Broadcasters (PSBs) and called for radical changes in order to protect the future viability of commercial media.
EPC’s Chairman, Francisco Pinto Balsemão said: “Long established public service broadcasters in Europe have expanded hugely with public funds – and in some cases with the unfair advantages and distorting effects of advertising revenues too. But today’s PSBs are producing products little different from their commercial competitors and with only a handful of services which could truly be described as public service broadcasting”.
Mr Balsemão added that: “The publicly funded broadcasters have expanded beyond their ability to maintain broadcasting standards which critics can respect. Public Service Broadcasting was “good while it lasted” but is no longer serving the public interest.”
Following years of distortion of competition from publicly funded broadcasters on the TV market, commercial media companies now face the un-regulated colonising of the internet and mobile market from PSBs. This poses a major challenge to commercial media as governments continue to confer unrivalled funding and unparalleled protection and promotion of their legacy public service broadcasters across media market.
Mr Balsemão warned that “The impact of high expenditure by PSBs on the development of online publishing is profound. It restricts commercial growth, reduces the potential size and diversity of the commercial market and deters new entrants.
“Publicly funded broadcasters follow the trends set by the private sector but from an unequal position and with distorting effects. The Communication must address the question of how to define a public service,establish criteria for assessing what is of value to the consumer and work out appropriate levels of funding to achieve this objective without distorting or damaging the private sector and without stifling the growth of the media sector. Fair competition, a competitive European media and consumer choice are all at stake.”
The EPC’s key messages are as follows:
It is possible and indeed desirable to prohibit access to advertising and sponsorship revenues for any part of a service covered by a public service remit. This would go a long way towards removing distortions in those markets where dual funding already exists, and protect those markets where publicly funded broadcasters are exploring possibilities of introducing advertising to parts of their new media offers, particularly the internet.
The funding of PSB should be restricted to purely public service activities, according to clearly defined remits. Long-established PSBs in Europe – with a reputation based largely on a remarkable past performance,have expanded hugely thanks to public funds and in some cases with the help of advertising revenues. This is no longer justified.
Member States appear to have extended their remits for PSB to cover whatever they fancy to be public service activities with little or no regard for the market impact of extending their reach beyond traditional PSB. This needs to be addressed urgently.
Independent regulation is essential but sadly lacking across the EU.EPC believes you must start from the point of first principle of defining what the public service remit can incorporate. Once the remit has been defined, clear ex ante evaluation of requests for expansion to new media should be established together with criteria for ex ante market impact assessment by competition authorities/independent regulators.
A clear distinction between publicly funded and commercial activities requires major clarification. This is the only basis upon which public funding can be properly assessed and investment decisions made by the private sector.
Unlike the early days of traditional broadcasting, rooted in spectrum scarcity, there is no need for pioneering, state-subsidised semi-monopolies to make the heavy investment necessary to ensure the growth of new media markets. On the contrary, new media markets and their customers will benefit from the very opposite architecture: a wide diversity of suppliers, unrestrained by unfair competition from any dominant, state funded player.
The Internet must absolutely not be defined as broadcasting. The Internet is naturally an extension of the publishing business model.Furthermore, there needs to be a fair and open market for the development of e-commerce without the distorting effects of state aid.
The EPC’s full consultation document that looks in full at the current situation of PSB regulation in the EU and provides detailed answers to the Commission’s consultation questionnaire, is available on request.
For more information, please contact EPC’s Executive Director Angela Mills Wade on Tel: +44 1865 310 732; email@example.com or Heidi Lambert on Tel: +44 1245 476 265.
Note to Editors:
Members of the European Publishers Council
Chairman: Mr. Francisco Balsemao, Chairman and CEO,Impresa, Portugal
Mr. Kjell Aamot, CEO,Schibsted, Norway
Ms. Sly Bailey, Chief Executive,Trinity Mirror plc, UK
Sir David Bell, Chairman,Financial Times Group, UK
Mr. Carl-Johan Bonnier, Chairman,The Bonnier Group, Sweden
Mr. Oscar Bronner, Publisher & Editor in Chief,Der Standard,Austria
Dr. Hubert Burda, Chairman and CEO,Burda Media, Germany
Dr. Carlo Caracciolo, President,Editoriale L’Espresso, Italy
Mr. Juan Luis Cebrian, CEO,Groupo Prisa, Spain
Sir Crispin Davis, Chief Executive,Reed Elsevier, UK
Dr. Mathias Döpfner, Chief Executive,Axel Springer AG, Germany
Mr. Tom Glocer, Chief Executive,Reuters PLC, UK
Dr. Stefan von Holtzbrinck,Verlagsgruppe Georg von Holtzbrinck GmbH
Mr. Steffen Kragh, President and CEO,The Egmont Group, Denmark
Dr. Bernd Kundrun, Chief Executive,Gruner + Jahr, Germany
Mr. Christos Lambrakis, Chairman & Editor in Chief,Lambrakis Publishing Group, Greece
Mr. Murdoch MacLennan, Chief Executive,Telegraph Group Ltd, UK
Mr. James Murdoch, Chairman and CEO,News Corporation, Europe and Asia
Sir. Anthony O’Reilly, Chief Executive,Independent Newspapers PLC,Ireland
Mr. Didier Quillot, Chairman and CEO,Lagardère Active, France
Mr. Michael Ringier, President,Ringier, Switzerland
The Rt. Hon. The Viscount Rothermere, Chairman,Daily Mail and General Trust, UK
Mr. Marek Sowa, CEO,Agora, Poland
Mr. A. J. Swartjes, CEO,De Telegraaf, Netherlands
Mr. Hannu Syrjänen, CEO, SanomaWSOY Corporation, Finland
Mr. Christian van Thillo, Chief Executive,De Persgroep, Belgium
Mr. Jose Manuel Vargas, CEO,Vocento, Spain
RCS Quotidiani S.p.A,Italy
Executive Director: Angela Mills Wade
Press Relations: Heidi Lambert