Public and Private Media Fight Over iPhone Apps

Michael Hedges January 4, 2010 Follow on Twitter

Nothing says you’re connected like having an iPhone app. Without one you are consigned to the media backwater, ignored if not forgotten and certainly uncool. Whether or not public broadcasters offer iPhone apps is now controversial.

Shortly before Christmas German public broadcaster ARD news director Kai Gniffke gleefully announced (December 21) that news program Tagesschau would in the first quarter 2010 have its very own iPhone app. It will be free, just download it. After all, the public broadcasting license fee pays for it.

“Several hundred thousand iPhone users can expect us to provide them a pathway to serious news, “ said Gniffke.

Windows began rattling, recalling the early ‘70’s Stephen Spielberg TV horror movie “Something Evil,” at publishing and broadcasting houses all over Germany.  If anything, Herr Gniffke erred in timing. Axel Springer CEO Matthias Döphner had not yet left for the Holidays. 

“It will cost a thousand jobs in the publishing industry,” predicted Döphner, “if free mobile applications catch on.” Axel Springer newspapers Bild and Die Welt began offering iPhone apps a few weeks earlier, and charging a fee for them.

Tagesschau is the early evening news program produced by Norddeutscher Rundfunk (NRD) and broadcast on most ARD network channels. It’s been on the air since 1952. It has a huge audience.

Third-party applications for the Apple iPhone and iPod touch – called iPhone apps, in shorthand – are, arguably, the most significant development in new media in the last year. Apple has brilliantly facilitated third-party developers access to both code and marketing. At the same time, Apple maintains strict control over which iPhone apps can be delivered. At the beginning of 2009 only 10,000 iPhone apps were available; some free, some not. Over one billion apps had been downloaded by last April and by the end of the year, ten times more had been added, available only through the iTunes store. Gizmo watchers believe more than 300,000 will be available within months.

Like most everything else in the competitive mobile media business, iPhone apps only work on iPhones (plus some iPods). Other smartphone makers have their own varieties. There’s a Blackberry App store on-line. Google offers third-party apps at the Android Market. 

Axel Springer spokesperson Edda Fels called the iPhone app for Tagesschau, bluntly, an “intolerable market distortion.” Ms Fels expressed surprise that the public broadcaster would offer the new media plug-in before the next round of license fee negotiations when the current license fee revenue is insufficient for “the existing offer.” Making available fee iPhone apps,” she said, “certainly does not belong to the public service mission of public service broadcasters.” In fact, iPhone apps are offered in conjunction with several ARD distributed television programs, animated children’s program Der Maus being one.

Letters and press statements were fired silver-plated through the next week to ward off the evil free service. “Using the license fee, ARD is again extending its mandate at the expense of newspaper and magazine publishers,” said German Magazine Publishers Association (Verband Deutscher Zeitschriftenverleger – VDZ) managing director Wolfgang Fürstner in a letter to German Culture Minister Bernd Neumann.

“Broadcasters, themselves, want to expand into these markets, under terms of the Broadcasting Treaty, said German Private Broadcasters Association (VPRT) chairman Jürgen Doetz. An iPhone app for Tagesschau is, he said, another “market distortion.” Private sector broadcasters and publishers took heart in a contentious European Commission (EC) State aid decision last year that imposed a “three-step” analysis before German public broadcasters could offer new services. The German State Broadcasting Treaty was amended to comply with a settlement with the EC. “In the next six months a new license fee system starts, which must answer some questions,” added Doetz. “Otherwise, we have no other choice but to complain (to the EC).” 

The public broadcasting license fee, administered and collected by the GEZ, has been enlarged to include personal computer owners. The next step would be to collect from all mobile telephone users. That’s a step too far, said the Federation of German Taxpayers (Der Bund der Steuerzahler - BdSt).

“First, the public radio and television broadcasters must fulfill their mission,” explained BdSt managing director Reiner Holznagel to the daily B.Z (December 28). “For this and only this they also receive the fees … at the level now established. Everything that goes beyond, helping to increase fees, we firmly reject.” Axel Springer owns B.Z.

German politicians were eager to criticize; best to have German publishers as allies rather than foes. “Public service broadcasting’s free offers for the iPhone threaten new business models of private providers,” said Culture Minister Bernd Neumann in a press statement. He called ARD’s announcement of the iPhone app for Tagesshau “rather surprising” so soon after the Bild and Welt iPhone apps were launched. He added that “the coexistence of private and public media providers in the future” could be called into question.

The row over public broadcasters entering new media is not new, not in Germany nor elsewhere. In the UK, the BBC has come under fire from private sector broadcasters and publishers for coming up with all sorts of clever new media tools and applications. As dismal economics began to affect corporate bottom-lines – not to forget senior executive salaries – the tone has reached a fevered pitch.

Public broadcasting, with its recognized mandate for free access to broad content, sits on the other side of the pay-wall that private sector media, led by News Corporation chairman Rupert Murdoch, wants to build. Access to new media users – small, so far, in market share but enormous in common perception – has become a rallying point for both public and private sector media. And both sides a spoiling for a fight.

See also...

Media in Germany

Europe's biggest and richest media market is home to some of the world's largest media companys. It was the first to switch completely from analogue to digital TV while digital radio languishes. Between tight competition and economic anxiety Germany's media shows great stamina. includes Resources 92 pages PDF (July 2009)

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