License Fee: Love You, Love You Not

Michael Hedges January 23, 2012 Follow on Twitter

Public broadcast financing remains contentious as services change with the digital universe and budgets under pressure. A license fee based on receiving equipment seems outmoded as listeners and viewers opt for internet and mobile applications. All financing options and combinations thereof are under the microscope. Just don’t call it a tax.

The German agency charged with fixing the financial needs of public sector media decided to hold steady the monthly license fee at €17.98 from 2013 to 2016 even though public broadcasters are projected to run a shortfall more than €300 through the period. Changes in the license fee system coming into effect at the first of 2013, said the Kommission zur Ermittlung des Finanzbedarfs der Rundfunkanstalten (KEF) (January 18), make revenue forecasts impossible. The KEF could have raised the license fee to €18.35 per month to meet the shortfall. Policing powers for the agency collecting the German license fee (GEZ) will be limited.

The German broadcast license fee funds the two major public television networks – ARD and ZDF – as well as subsidiary regional public radio and TV channels and national radio broadcaster Deutschlandradio. Parliaments of the 16 German Länder approved changes to the license fee last year from an equipment-based system to a flat-rate for households. The changes are meant to tighten up license fee payment compliance as the internet and mobile devices become the significant media delivery route.

Given the spirit of the times, there were few complaints from the public broadcasting side even though they will be tightening their budgets for a year or two. ARD, ZDF and joint German-French public cultural channel ARTE, however, indicated as the KEF announced its decision they’d be ending carriage fees to cable TV companies. Head of the States Broadcasting Commission Kurt Beck called the KEF decision “manageable and acceptable.” Even the private broadcasters association (VPRT) “welcomed” the decision but called for deeper cuts in digital output. (See VPRT statement here – in German)

The process of changing the German public broadcast license fee, which included terminating the license fee “police”, took more than three years and dredged up every possible argument for or against public broadcasting and the financing thereof.  

Ireland’s government is studying changes to its public broadcasting license fee and the German model, as well as the Swiss, Finnish and Icelandic, are being considered. “We won’t have to reinvent the wheel I hope,” said Communications Minister Pat Rabbitte, quoted by Irish Times (January 20). Under current rules public broadcaster Raidió Teilifís Eireann (RTE) is financed, like German public broadcasting, by a mix of license fee and advertising, split about 50:50. The radio and television license fee in Ireland is based on available receiving equipment.

Private sector lobbies were quick to condemn the proposal as “just another stealth tax.” 

Concerned for public perception during times of austerity, Mr. Rabbitte stressed, “This is not an additional charge. This is not a new tax. This is not a new levy. This is a replacement for the existing TV license.” He also suggested a household-based license fee to put RTE in a “sound financial framework” might be lower than the current €160 annual fee and new rules might not be in place for a year or more. License fee payment noncompliance in Ireland is about 30%.

Poland’s National Media Council (KRRiT) raised the public broadcasting license fee last year to PLN 199 (about €45) and began offering discounts for advance payments. A proposal to collect the license fee through electricity bills failed in Parliament, more than once. Noncompliance in Poland is about 66%.

Finland’s model for financing public broadcaster YLE has been the traditional license fee, about €244 per year. That, too, will change in 2013 as a “YLE tax” is computed by income, from €50 to €140 annually, and payable along with income taxes. But a two-person household could pay up to €280. Businesses will pay between €300 and €600 annually.

The license fee financing Iceland’s public broadcaster RUV is collected through income tax declarations. RUV also collects advertising revenue to support its two radio channels and one TV channel.

Financing Swiss public broadcaster SSR-SRG is through a mix of license fee and advertising (TV only). In 2010 the Federal Council put a hold on the radio and television license fee at CHF 462 annually about €360. The license fee is levied on households and business that “capture” radio and television programs.  A slight discount is offered for full year advance payment. License fee compliance is virtually universal, estimated at 95%.

Hungary, Netherlands, Cyprus and Portugal have abolished the public broadcasting license fee in favor of direct State financing. Estonia, Spain and Luxembourg have never had a license fee.

See also in ftm Knowledge

Media in Germany

Home to Europe's biggest broadcasters and publishers, Germany is a highly competitive media market. Transition to digital television was easy, other media not so simple, unsuprising with Germany's complex regulation and business structures. This Knowledge file reports on media leaders and followers. Includes Resources 143 pages PDF (April 2011)

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Public Broadcasting - Arguments, Battles and Changes

Public broadcasters have - mostly - thrown off the musty stain of State broadcasting. And audiences for public channels are growing. But arguments and battles with politicians, publishers and commercial broadcasters threatens more changes. The ftm Knowledge file examines all sides. 64 pages PDF (January 2010)

Order here