Public broadcasters attacked (again and again)

Michael Hedges September 22, 2008

Times are tough. It’s tough out there for banks, insurance companies, airlines and media. So when the going gets tough – as we’ve seen in the last week – the tough call on governments to fix it.

Francisco Pinto Balsemão, chairman of Portugal’s leading private sector media company Impressa, vented at public broadcasters (PSBs) before a conference (September 17) in Helsinki. It’s market distortion. It’s new media. It’s the money. It’s the competition. Where’s government when big media needs it?

“For years we in the private sector have challenged the way the PSBs have distorted the market,” he said, “…but governments have not been prepared to bring them to heel. PSBs are now major publishers online, competing head to head with commercial newspapers and magazines. Public and private broadcasters compete with both broadcast and non-broadcast content, as consumers choose to watch or download movies and TV output via the Internet and mobiles.”

Sr. Balsemão made the oft-repeated charges as chairman of the European Publishers Council (EPC), itself a veritable who’s who of newspaper oligarchs. Grupo Impresa, the media company he founded, publishes the daily Expresso and owns private television network SIC. Sr. Balsemão knows politics, having served as Portugal’s Prime Minister in the early 1980’s.

Convergence – of the digital media kind – has been an unmitigated disaster for publishers. Most treated the Web with the same disdain – and denial – given to television a half century ago. And misjudging consumer preference and behavior – unsurprising from ‘we know better’ publishers – sets them firmly behind the curve.

As EPC chairman, Sr. Balsemão is one of big newspapers’ designated attack dogs, chomping at anything threatening their status quo and cash flow. He’s also lashed out at search engines for enabling consumers’ quest for free content. The business model for Google, et.al. is “parasitic,” he said. 

It is “fascinating to see how these companies help themselves to copyright-protected material, build up their own business models around what they have collected, and parasitically, earn advertising revenues off the back of other people’s content,” he told a 2005 Brussels conference, reported by AP.

Parasitic? Didn’t ITV Chairman Michael Grade refer to search engines and social networks as ‘parasites’ just last week?

“They're all parasites,” said Mr. Grade in a recorded message to the IBC gizmo-fest.  “They,” referring to YouTube, Joost and Google, “just live off our content.”

That public broadcasters have led investment in new media particularly irritates private sector media operators. The remit – commonly accepted – for European public broadcasters is to reach the public broadly. If the public has turned to new media, the PSBs argue that they must make their services available there broadly.

What particularly jolts private sector media is the means by which the PSBs took that lead. With guaranteed income from license fees or direct State subsidies (read: taxpayers money) public broadcasters have turned financial certainty into investments. Digital broadcasting technologies have been developed, largely, through public investment. Abuse of that financial clout and subsequent market domination continues to receive the attention of EC Competition Commissioner Neelie Kroes. No public broadcaster wants to be on her watch-list.

For example, Commissioner Kroes has been monitoring Ireland’s public broadcaster RTE for State aid abuse. New Irish legislation creating a single regulator for all broadcasting – with specific definitions for RTE’s public service remit – is meant to assuage most of Commissioner Kroes’ concerns. Ireland’s private sector media isn’t convinced.

TV3 Chairman David McRedmond said the new Irish regulator must “take very seriously what the EU has said.”  Interviewed for the Sunday Business Post (September 21), Mr. McRedmond called the “fuzzy, unfettered funding of RTE…a complete anachronism.”  RTE is funded through both a license fee and advertising, always a point of contention with private sector media companies and more so as the free flow of ad money enjoyed by traditional media detours to new media.

Most traditional media criticism of PSBs centers on funding, funding, funding and that ‘fuzzy” remit. Mr. McRedmond is particularly incensed that RTE buys rights to UK and UK produced programs for show after midnight.  Between the close relationship of governments to their public (read: State) broadcasters and recognition that Europe’s dual system of public and private broadcasting largely benefits the public little change at either the national or EU level is expected from politicians.

And this is exactly where Sr. Balsemão sees the future changing. “Consumers, not politicians, will be the driving force to end PSB public funding,” he foresees. “Why should viewers in any country be required by law to pay for what they may not watch?”

There it is again; those darned consumers making decisions.