Analysis: Could License Fee Strife In France & The UK Spell The Beginning Of The End For Europes $36B Public Broadcasting Sector?

The funding model that has been the bedrock of Europe’s €35.5B ($36.3B) 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 do away with the license fee, dramatically shifting the way in which the nation’s public broadcasters (PSB) are funded and leading to potential government meddling and instability. In Britain, the 100-yer-old funding model is under review from a Conservative government that is no friend to PSB and, arguably, is ideologically opposed to it.

Noel Curran, Director General of the European Broadcasting Union (EBU) and former Director General of Irish pubcaster RTÉ, warned of a domino effect on smaller nations’ PSBs if powerhouses like the UK and France see their funding models weakened, which could threaten the very existence of public broadcasting in Europe. French state TV and radio workers have been striking over the past weeks.

“France and the UK are two of the biggest 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 concerning, particularly in European countries where there isn’t the same history of independent media.”

According to the EBU, European broadcasters generated €35.5B in 2020 – a 7% real terms fall over five years – and 60% came from countries that use a license fee model, which sees each household pay anywhere from $100 to $200 per year in order to gain access to the PSBs.

The model has been roundly praised over the decades for its independence from government and this very independence is threatened by President Macron’s new funding plan, which will see France Télévisions, Radio France, Franco-German broadcaster ARTE and international TV channels funded by value-added tax (VAT) revenues that will raise just over €3B ($3.1B) – roughly the same as the current level of funding.

Although politicians on all sides of the Centre Right-dominated upper house took umbrage for various reasons, French senators approved the controversial legislation this morning, per Deadline’s reporting.

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

An amendment has already been tabled for the new funding mechanism to stay in place for just two-and-a-half years and it may require regular renewal, meaning that any new or current government can tinker with it at will, or drop it altogether. That government could pressure broadcast news networks to report in a certain way or risk losing money, a dangerous precedent that is broadly prevented by the license fee system.

Having to potentially renew the funding model regularly will also impact pubcasters’ ability to plan ahead for major public events coverage such as the Olympics, according to Claire Enders, who runs influential British media firm Enders Analysis.

Enders pointed out that the new model could also stymie innovation, as public broadcasters will find it impossible to forge strategies in areas such as technology, VoD and data if their funding isn’t fixed for the long term.

“The new model keeps the show on the road but there is no leeway for future commitment,” said Enders.

“It’s an extremely short-sighted move. Just look at how the BBC turned the 2012 [London] Olympics into a global performance, reigniting tourism to the UK and making an enormous financial contribution. The BBC was planning for years for that event.”

The move comes at a time when French broadcasting is “held in very high regard,” according to Curran, who pointed to the nation’s TV and radio taking a “much stronger role across Europe more generally.” France Télévisions CEO Delphine Ernotte-Cunci is the EBU’s current President, for example, and has been warmly received around the continent, most recently addressing a packed Lille auditorium at Series Mania, during which she passionately argued in favor of the now-derailed license fee system.

What About The UK?

Meanwhile, the continent is grappling with a cost-of-living crisis – an issue that PSBs are by no means immune from but is being used by some skeptics as an argument to take money away from them and back into the pockets of ordinary citizens – while deep-pocketed U.S. streamers are causing super-inflation in the TV market that is showing no sign of slowing down.

In the UK, a delayed review into the license fee’s post-2027 future is due to start in September, once a new Prime Minister is appointed, and this could upend the model that has so boldly propped up the BBC through the decades.

Deadline understands that review could be extended from an initially-planned six months to one year, as the government looks in depth at alternatives and grapples with numerous questions.

Outgoing Prime Minister Boris Johnson’s firebrand Culture Secretary Nadine Dorries, an arch-BBC sceptic, ordered the review and rumors abound that she may be returned to the brief if the favorite to replace Johnson, Liz Truss, wins the race, potentially in an expanded role. Dorries’ biggest decision since taking office has been freezing the license fee for the next two years in one fell swoop, something that is costing the corporation hundreds of millions of pounds per year .

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

“The rest of Europe is confused and bemused by what is happening in the UK,” he added. “They look at the BBC with its huge 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 500M people around the world per week, at least five times that of the French broadcasters, she said.

“The British system is ginormous and the French don’t quite have the same understanding of the role they play in the world,” she considered.

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 50 recommendations made by a Future of Media Commission on public broadcasting, rejecting only one: to do away with the license fee, which will remain the source of funding.

And in Australia, admittedly far from Europe, Albert Albanese’s recently-installed Labor Party has put forward a roundly-praised five year funding plan to support national pubcaster ABC.

Whatever happens, maintaining independence, universality and transparency is key for Curran’s EBU, and industry observers remain gravely concerned over what lies ahead for their public broadcasters, the bedrock of the continent’s TV system.

Next steps in the UK and France could determine that very bedrock’s sustainability.

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