Karol Jakubowicz, Ph.D.

Adviser to the Chairman

National Broadcasting Council

Poland

THE FUTURE OF PUBLIC SERVICE BROADCASTING

IN THE INFORMATION SOCIETY

Prepared for delivery at the Department of Journalism, Kaunas University

Monday, February 17, 2003

Public Service Broadcasting in Transition

Sondergaard (1998) sees two “waves” of change affecting public service broadcasters:

  • the “first wave” – mainly resulting from the introduction of commercial broadcasters, cable and satellite television;
  • and the “second wave”, currently being introduced by digital technology.

To this must be added a third “wave”: the prospect – as convergence, the spread of broadband technology and the replacement of “push” by “pull” technology picks up momentum – that the broadcasting paradigm of electronic communication may gradually be weakened and ultimately possibly disappear altogether, to be replaced by non-linear, on-demand modes of communication, encompassing primarily “conversation” and “consultation” (Bordewijk, van Kaam, 1986).

In an Arthur Andersen report for the European Broadcasting Union (The Impact of Digital Television …, 1998), this is presented as the arrival of successive “generations” of (television) broadcasters. If we elaborate on the approach adopted there, we may arrive at the following (admittedly simplified) presentation of challenges facing public service broadcasters.

Figure 1. Challenges to PSB as Electronic Communication Evolves

1st Generation
Broadcasters a / 2nd Genera-tion Broad- casters b / 3rd Genera-tion Broad-casters c / Non-linear, on-demand communication, “pull technology”
Funding / Public
Advertising / Advertising
Subscription / Subscription
Advertising / VOD, Pay-per-view, commission on transactions, etc.
Output / General / General (but more entertainment)
Premium Pay-TV / Thematic / No, or few “flow channels”, most con-tent (except for live news and live coverage of events) available on demand
Licence Conditions / Strong / Moderate / Weak / Unknown at this stage
Programme Expendi-ture / Mainly originated / Mainly originated,
but a lot of acquired / Mainly acquired / Unknown at this stage
Challenge to PSB / None, PSB monopoly or domination / Loss of mono-poly on audience, retention of monopoly on “PSB genres” / (Partial) Loss of monopoly on most “PSB genres” / Channels, schedules disappear; PSB must (?) gradually evolve into PSCP: public service content provision

a Mainly public; b Mainly commercial; c Mainly new digital thematic channels.

Adapted from: The Impact of Digital …, 1998: 26.

On this basis, let us consider the response (or likely response) of public service broadcasters to each of these challenges, and what possible public interest considerations have agitated, or potentially will agitate, at each of this stages in favour of preserving it.

Arrival of 2nd Generation Broadcasters

The onset of commercial broadcasting was seen by some as undermining the legitimacy of, and indeed the need for, public service broadcasting. That was when deregulation and demonopolization led to the emergence of new commercial stations and media policies were progressively being transformed from „cultural” to „industrial” ones (treating media and their development as an engine of technological and economic growth, and thus promoting involvement of private capital in the media). Some saw television as gradually being redefined from a „service” to a „business” (Richeri, 1984).

Sondergaard (1998: 16) sees some salutary effects of the adaptation of PSB in consequence of deregulation and demonopolization: the “modernization of publicly owned media”, long overdue due to the “companies’ inability to adapt to the social and cultural change taking place in society as a whole”. They needed the shock of demonopolization and competition to abandon their elitist and paternalistic approach to their audience.

Given the economics of the media, especially television, many new commercial stations concentrated at first on recouping the original investment in the shortest possible time, understandably concentrating on mass-appeal and imported programming. The consequences of this are well known. While public service broadcasters (in most cases) sought to retain their rigorous schedules, viewers in increasing numbers opted for the more entertaining commercial channels. Although rigorous content was available, viewing figures fell. Public ambitions were being met in theory (distinctive programmes were available), but not in practice (distinctive programmes were not being watched).

As a result, as McKinsey&Company (1999) has found, public service broadcasters have typically adopted one of three strategies:

  • A focus on distinctiveness (i.e. fidelity to the PSB remit, as expressed in prominence of “public service genres” – factual, cultural and children’s programming in schedules) over market share (e.g., PBS, ABC).These PSBs (often forced into this position by their remit or funding model) have had little impact on the main broadcast networks, as they pose no meaningful financial threat to commercial competition.
  • A focus on market share over distinctiveness (e.g., RAI, RTVE). While these PSBs have the potential to significantly influence their market, in practice there is little to differentiate them from commercially funded operators. The majority of PSBs in this cluster depend heavily on advertising funding.
  • Some form of equilibrium between the two (e.g., SVT, ARD). These PSBs have held a significant audience share while maintaining a distinctive approach and fulfilling their public service remit.

It is probably these strategies, all of which were based on recognition of the inevitable (that given a choice audiences will predominantly opt for less demanding and more escapist and entertaining programming) which have accounted for interpretations of “public service broadcasting” as oriented to satisfying the interests and preferences of individual consumers rather than the needs of the collective, the citizenry. Such statements probably overstate the case. In two cases out of three, the original goals of “pure” public service broadcasting are still pursued, though with less single-minded attention.

What this means in terms of the raison d’etre of PSB is that in the early period commercial broadcasting did not threaten to supplant or replace public service broadcasters, typically offering an entertainment-oriented alternative to PSB programming, with only limited overlap between them. Accordingly, it showed that the values represented by public service broadcasting, though vulnerable, retained their validity.

Public service broadcasters could therefore easily argue that they were indispensable in the dual broadcasting system, and that the rationale for their continued existence was as strong as ever. The following figure illustrates this rationale:

Figure 2. Rationale for public service broadcasting in the early period of the dual system

Economic rationale Public interest rationale

- correcting market - social, political,

failure cultural, edu-

- wider economic cational tasks

benefits [1]

Provision of

an alternative

to commercial

broadcasting

PUBLIC SERVICE BROADCASTING

Adapted from: Public Service Television..., 1991.

This argument is bolstered by the fact that 2nd generation broadcasters can be shown to be producing less new programming, thus offering audiences less content deriving from its own social and cultural context, and produced with that particular audience in mind. This is an enduring phenomenon, as shown in the figure below.

Figure 3. TV Programme Expenditure, Western Europe (ECU Billions, 1996 prices)

Source: The Impact of Digital Television …, 1998.

Arrival of 3rd-Generation Broadcasters

Benefits to consumers arising out of the arrival of the third generation of broadcasters can be summed up in the following way:

Figure 4. Benefits to consumers from different digital services

Type of service

/ Platforms / Benefit to consumer / Appeal
More channels / DCable, DSat, DTT / Adds to range of programming available / Broad
Time-shifting (NVOD) / DCable, DSat / Convenience, removes linkages of most popular programming and prime-time / Broad
Side channels / DCable, DSat, DTT / Enhanced service / Niche
Interactive services / DCable, DSat, DTT / Convenience of shopping and banking from home. Provision of on-line type services for those without a computer / Broad
VOD / Integrated / Convenience, freedom from schedulers / Broad

Source: The Impact of digital television …, 1998: 76.

Due to digitization, among other factors, there is now a growing “ economy of abundance” in multichannel broadcasting. This has led to the emergence of 3rd generation cable and satellite channels which are mainly genre or thematic. As commercial broadcasters seek to occupy niche markets, they have entered areas of programming hitherto reserved mostly for public sector broadcasters and deprived them of their monopoly on “PSB content” or genres, though it is true that in the UK, at least arts, education, multi-cultural programmes, investigative current affairs programming, natural history programmes and the like continue to be under-supplied by commercial broadcasters, as they are “generally commercially unattractive to produce” (ITC Consultation …, 2000: 4). It is also the case, adds the ITC document, that, apart from sport, there is little first run programming on multi-channel television which was made specifically for a UK audience.

Much of the content which once was the exclusive domain of PSB is now provided also by “third-generation” broadcasters of thematic channels (often offered on a pay-TV basis), even if they usually have an insignificant market share. Thus, it is available piecemeal from specialized channels (many of them pay-tv ones), requiring audiences to undertake additional effort and incur considerable expense to access content from many sources comparable to that available from public service broadcasters. In any case, specialized channels attract only receivers who seek out the content they have to offer, whereas it is an important function of public service broadcasting to extend audience’s tastes and interests.

Still, the argument of no or little overlap between their programme offer and that of PSB no longer holds to the same degree as before. What, then, are the arguments for and against the continued existence of public service broadcasting?

One frequently used argument has been advanced by M. Souchon:

In producing the same type of broadcasts as others, it [PSB – K.J.], it will have to try to produce them better, with stricter standards and more precision, and with more marked concern for professional ethics. Public television must broadcast the genres tht the public at large expects of television (information, fiction, entertainment), but the quality must be higher than that of commercial television channels (cited after Atkinson, 1997: 47).

Still, these are relatively lame arguments (PSB can do the same things, as the private sector, but better). Different arguments are provided in an ITC consultation document: in an age of growing international competition on the television market, neither Channel 3 nor Channel 5 in the UK would probably be able to “deliver PSB in the longer term, well beyond digital switchover”:

If its market position erodes significantly, ITV's commitment to fund the less popular programmes in the PSB mix may diminish and some support from other sources may be necessary. … Its output is already closer to that of other non-PSB channels than is Channel 4's, and in the longer term the gap is likely to narrow further … The case for Channel 5 to remain part of PSB is perhaps less strong [than in the case of Channel 4 – K.J.]. Unlike ITV and Channel 4, Channel 5 does not have universal terrestrial coverage although this may change after digital switch-over. …It has now established an audience base which offers the prospect of future revenue growth and profitability (…) One option would be to require Channel 5 to continue as a free to air channel but with different requirements. For example the requirements for arts, religion and current affairs could be removed or replaced with different requirements … If government were to remove all PSB requirements from Channel 5, this would make it a far stronger competitor to the other PSB channels and its tender payments would need to reflect its new status ((ITC Consultation …, 2000: 8-9)

Thus competitive pressures may leave the British audience, and even more so audiences in other countries, with a much narrower range of sources of “PSB content” than so far, at least so far as generally accessible generalist channels are concerned, boiling down to all intents and purposes to the BBC and Channel 4 (though the ITC says in its consultation document that Channel 4's long term viability as a self-funded channel based on advertising cannot be guaranteed).

The ITC consultation document also seeks to argue the case for spreading PSB material across a range of (PSB and private sector) channels (the distributed public service model). In an age of growing specialization of channels and the audience’s growing freedom and ease of choice, it is highly doubtful, however, that such a concept would be successful. PSB content, implanted into a commercially-funded channel would disrupt the flow and vitiate the concept of programming designed to maximize market share or advertising revenue. There is even less of a possibility of applying this method to pay-tv channels which desperately need to attract subscribers in a highly competitive market.

The UK Independent Review Panel came to the conclusion that “Economic theory suggests that, rather than removing the case for public service broadcasting, the commercial pressures and globalisation that are reinforced by digital technology, could increase the need for such a broadcaster” (Funding the BBC,,, 1999: 204-205).

This, the Panel argues, is due to:

  • The risk of over-concentration in the market and the emergence of private monopoly;
  • Increased audience fragmentation which is likely to increase average costs and discourage commercial broadcasters to provide PSB content;
  • Negative externalities may increase, so with expanding numbers of channels in the digital era, it may be substantially more difficult for regulators to ensure that programming standards are upheld.
  • Programming in a free market: assuming that broadcasters operating in a free market are funded through either Pay TV (subscription or pay per view), advertising or sponsorship, economic theory suggests that not all types of desired programming would be provided. Though theoretically this market failure can be corrected through commercially provided Pay TV, because it enables the profitable production of the types of programme which small audiences value highly and are prepared to pay for. It is likely however, that Pay TV would still fail to produce programmes which have a wide appeal and are valued highly, eg certain sporting events, news programmes and classic serials. This is because it is difficult for the commercial broadcaster to maximise revenue for this type of programme - if a high price is charged, revenue is lost by excluding the large number of people who would pay a moderate price, and if a moderate price is charged a large amount of potential revenue from those people prepared to pay a higher price has been lost.

In short then, public service broadcasting will continue to be needed to:

act as a counterweight to the private concentration of ownership

provide a centre of excellence which both makes and broadcasts programmes

be large enough to influence the market and so act as the guarantor of quality

widen choice both now and in the future by complementing the market through the pursuit of public service purposes.

Moreover, commercial broadcast media, having tried to provide PSB content, are also free to direct their money and energies elsewhere. Thus, PSB is the only guarantee that a certain type and range of content will always be available, no matter what else happens on the market.- all the more so that given expected changes in the business model of commercial broadcasters more and more of their services will be available as Pay-TV.

However, that is by no means the end of the digital revolution. According to one view, it will happen in three stages defined by technology and functionality.

Figure 5. The digital revolution

Phase / Description
Phase 1 / Set-top boxes with over 200 digital channels. Widescreen TV increasingly available. Some near-video-on-demand (NVOD) and other limited interactive services. Downloadable low quality video.
Phase 2 / Second generation set-top boxes, offering storage and a return path. Improved interactive services and improved access to archives. Reasonable quality downloadable video.
Phase 3 / Fully converged digital TV and web devices, with integrated media navigators. Full portability and mobility. Full interactivity and archive access

Source: The Future Funding of the BBC … 1999: 14.

Some features of convergent digital communication are shown in Figure 6.

Figure 6. Features of Convergent Digital Communication

  • Interactivity; interchangeable sender/receive roles; user ability to order or choose content;
  • PULL technology gradually replaces PUSH technology;
  • Asynchronous communication: content can be stored and await the user’s decision to access it;
  • Individualization/personalization, signifying the twin elements of both the sender’s and the user’s ability to guide communication flows in such a way that the sender can address to individual users content suited to their choices and interests, or users can select content from what is on offer for the same purpose.

This leads to convergence between the traditional media system, informatics and telecommunications, as shown in Figure 7.

Figure 7. Effects of Convergence

Mass media
(Public communication) / convergence / Individual media
(Private communication)

Content

regulation /
No content
regulation
Broadcast
distribution / Point-to-point
distribution
Regulatory dilemmas:
  • Universal v. selective service: legislation designed to ensure general availability of content (must-carry rules), as well as basic infrastructure access for all households at a fixed cost is challenged by the multitude of channels and access modes.
  • Licence fee financing v. advertising and pay-per-view: increasing number of channels and delivery systems reduces the viewership and therefore the importance of national public broadcasting service (PBS) channels.
  • Content regulation: directed at mass media. However, as media are individualized, content regulation becomes inapplicable, or has to be adjusted to the medium and its contents.

Adapted from: Ostergaard, 1998: 96.