Figure 2. Funding models for broadcastingMany of us have come across the English proverb “He who pays the piper calls the tune”. The essence of this saying is that paying for something entitles the donor to decide in detail how the money is used.
Figure 1. Devices and distribution networks for television (2006)
Figure 1. Devices and distribution networks for television (2006)
The metaphor of a piper can also be applied to public service broadcasters (PSBs).
It provides a useful framework to explore three important issues concerning the role of PSBs:
1. Folk melodies or the latest hits? Is public service broadcasting a question of maintaining its focus on radio and television, or does public service broadcasting in the 21st century require that the PSB offer new universal media and services on the Internet and on hand-held devices in order to comply with its remit?
2. Who pays the piper? There are many funding models for public service around the world. Some PSBs are funded directly by the state. Others are funded by some kind of broadcast licence collected independently of the taxation system. There are also PSBs that generate revenue from television advertising. How does funding impact the governance and editorial independence of PSBs?
3. Should he who pays the piper call the tune? What are the arguments for and against the editorial independence of PSBs?
1. Folk melodies or the latest hits?
European PSBs emerged in the 1920s as champions of a kind of radio free from commercial sponsorship and direct government control.
Thirty years later, public service television emerged in a variety of forms. In the United States, public service TV was unashamedly high-brow television free of advertising. In countries around the Mediterranean, a mix of government funding and advertising lead to channels very similar to their commercial competitors. In the north-west of Europe, the result was a mainstream offering with distinctive programming characterised by greater diversity and independence.
The latter half of the 1990s brought with it the Internet and mobile communications, both of which have had an impact on conventional broadcasting and required a strategic response by PSBs. In some cases, a given PSB had to restrict itself to using the Web as a new information platform to promote its “core products” – radio and TV channels and to allow for participation in programmes through the use of SMS. Others chose to use the Internet both as a new medium and to distribute their traditional programming, and both the Web and the mobile were considered an integral part of being able to host communities and promote civic dialogue.
The interest and excitement that surrounded the Web in particular has triggered uncertainties in the minds of broadcasters: is the existence of broadcasting in its traditional form threatened with extinction? A rapid look at the audience figures around the world indicates that radio and television per se are reaching more people around the globe for more hours per week than ever before. If you are a broadcaster using traditional metrics for assessing the success of radio and television, all would seem to be well. But when one takes a closer look at the numbers, a different picture emerges. Our narrow focus on measuring audience share and reach for individual media such as radio and television has blunted awareness of the big picture, the overall use of media by citizens; we cannot see the wood for the trees.
While significant change in media habits normally takes decades, there are indications that listening and viewing behaviours among the young are changing more rapidly than this. “Old” media are being delivered through new non-broadcast distribution systems such as the Internet, 3G and IP Datacast. They are being accessed on the computer and a range of handheld devices. New digital media such as electronic games, DVD and the Web have also emerged and account for an increasing share of the overall media consumption of the young.
There is also a shift from consuming media to sharing and even making them. Personal pocket media on the mobile phone or an MP3 player such as the I-Pod have made it easy to acquire, rate and share music and video clips. Communities of people have sprung up around sites such as Flickr (photos) and YouTube (videos) where users create and describe content, and provide mechanisms for rating and sharing it on their terms, not on the terms of the established media industry.
At this point I would like to review public service in relation to new media. Public service broadcasting typically encompasses the following purposes:
· To further social, political and cultural cohesion (informing and increasing citizens’ understanding of the world they live in and stimulating an interest in and knowledge of a wide range of content domains through accessible content that promotes informal learning)
· To sustain national and regional culture and democracy (creating an awareness of different cultures and alternative viewpoints, through content that reflect the lives of other people and other communities, both within one’s own country and elsewhere)
· To serve not only society as such but also minority groups and individual citizens
In order to comply with these purposes, public service media are usually characterised by:
1. Universality (being available and accessible to all)
2. Being engaging (content that is accessible and enjoyed by viewers)
3. Diversity (something for everyone)
4. Plurality of expression (catering for minorities regardless of age, gender, race or creed)
5. Identity (concern for national and regional identity and community, cultural and linguistic diversity, capable of building social cohesion)
6. Editorial independence (freedom from vested interests and government interference)
7. Quality (both content and high production values)
8. Originality (new content, rather than repeats or acquisitions of ”commodity content”)
9. Innovative (breaking new ground or offering new approaches)
10. Challenging (making viewers think)
Universality (being available and accessible to all)
For media such as analogue radio and television, universality was a relatively easy requirement to meet. Terrestrial broadcasting provided a coverage approaching 100% of homes in most European countries. Buying a receiver was relatively inexpensive within a decade or so of the launch of these media and they were easy to use. You had to turn on the set, tune to a frequency, adjust the volume – and that was it.
In a convergent world approaching analogue shut-off for television between 2007 and 2012, and some years later for radio, things are not so clear-cut. First of all, in a digital world there are far more distribution networks for, say, television and a number of new devices on which television can be received. Figure 1 shows many of the distribution channels and their accompanying devices. While analogue terrestrial broadcasting had almost 100% coverage, only digital satellite and digital terrestrial transmission have – or will have – a coverage anywhere near analogue transmission.
The other distribution networks such as digital cable or fixed line Internet (xDSL or Fibre To The Home, FTTH) in countries like Denmark tend to be available to those in urban areas, and do not reach subscribers more than 6-10 kilometres from a telephone exchange or fibre node. Hong Kong has this problem, too. Those living on islands like Lantau still have dial-up connections.
Figure 1 Devices and distribution networks for television (2006)
As analogue shut-off approaches in the next two to seven years, public service broadcasters, dependent as they are on maintaining a high reach in order to assure the legitimacy of their activities, will be forced to put together a patchwork quilt of distribution networks to maintain geographical coverage and thus reach to demonstrate universality. They will also have to plan carefully so that their distribution costs from non-broadcast networks do not escalate and eat into content production.
Unfortunately, geographical coverage is not enough. For an individual or a household to be able to make full and effective use of one of these digital platforms, not only is there a need for adequate network coverage but also for devices that are affordable, reliable and easy to use.
Digital decoders for free-to-air digital transmissions are now quite cheap. They can be had for as little as USD 40 –100 and can be connected to a conventional television receiver. From this perspective, as long as free-to-air broadcasting can maintain its attractiveness to the population in competition with pay-TV, there does not seem to be a significant danger of a digital divide.
But there may well be a more subtle kind of digital divide. A study by Stallard  on the accessibility of digital television by people with disabilities including the elderly indicate that significant numbers of viewers are effectively prevented from making use of DTT due to the complexities of set-top installation, set-up and use, compared with analogue television and integrated digital television sets.
The Ofcom  report on the digital switchover technical trial at Ferryside and Llansteffan in the UK also makes mention of the need for automatic and intelligent retuning of set-top boxes when changes are made, and the need for simpler remote controls with a few, large buttons that do not require the user to point directly at the device in order to work. The report does, however, argue that that, given appropriate information campaigns and consumer support, such problems are surmountable.
A final aspect of accessibility is the trend towards convenience and the ”anything, anytime, anywhere and on any platform” paradigm. If high-quality and potentially engaging programmes are only aired once or twice, the chances are that they will not reach all of their potential audiences. In an on-demand world, if you cannot find a programme, for all intents and purposes it does not exist. PSBs will have to increase content accessibility through user-centric programme descriptions powering time-shift and on-demand services.
Being engaging (content that is accessible and enjoyed by viewers)
Changes in the use of electronic media show that the under 30 year-olds increasingly turn to other media such as electronic games, the DVD and the computer, eroding the dominant position of television for this age group. Hess and Madansky  in a recent study document that “traditional media [such as radio and TV], still heavily used by this generation, serve vital but perhaps increasingly niche functions, often pushed to background status in the media-meshing hierarchy.”
Something similar began in the news industry a decade ago and has spread widely in the industrialised world. In his speech to the American Society of Newspaper Editors on April 13, 2005 Rupert Murdoch suggested that “too many of us editors and reporters are out of touch with our readers. Too often, the question we ask is ‘Do we have the story?’ rather than ‘Does anyone want the story?’”
He went on to argue that the news industry is unaccountably complacent and out of touch, in particular with the young: ”What is happening is, in short, a revolution in the way young people are accessing news. They don’t want to rely on the morning paper for their up-to-date information. They don’t want to rely on a god-like figure from above to tell them what’s important. And to carry the religion analogy a bit further, they certainly don’t want news presented as gospel. Instead, they want their news on demand, when it works for them.”
Given that television in general - and public service television in particular – also has a declining appeal to the young, a lack of action could undermine the social and political legitimacy of public service media, in particular if the reduced consumption of television among these individuals continues as they get older.
There seem to be several strategic responses open to public service broadcasters. Firstly, to examine carefully the nature of television programming targeted at these younger audiences to see whether changes in format and style might improve their ability to engage. Secondly, given the widespread consumption of games and mobile communication leading to “always on”, virtual communities, the systematic use of new media in conjunction with traditional media – cross media – represents an option that could make public service more meaningful. Interactivity to promote participation and a sense of community clearly needs closer attention.
Quality-related issues (Quality, Diversity, Plurality, Originality, Innovativeness and Challenging Content)
Earlier in this paper I mentioned the increase in programming supply (the number and duration of television channels). Economic theory suggests that increased competition leads to improvements in the quality, diversity, plurality of expression, originality, innovativeness and thought-provoking nature of television programming. This assumption is not necessarily correct, given the downward pressure on production costs and the increase in repeats across the many new channels.
Making a radical increase in output for much the same production budget while maintaining the same high editorial standards and production values presumes a major overhaul of production workflows, especially at public service broadcasters. Having had the opportunity to study several leading PSBs at close quarters, change management in all of them is going to be a major challenge. While PSBs should be able to make the necessary adjustments, this will not happen from one day to the next and may well lead to some strife along the way.
Identity – the shift from “traditional flow” to “new flow”
Eight decades of public service media in Europe have constituted a necessary and important counterbalance to commercial media on the one hand and state control, on occasions in extreme forms, on the other. But how well-equipped are public service media to support social, cultural and political cohesion in a day and age where it is increasingly up to the individual to select the norms and values by which he or she is to live?
For the first decades of public service broadcasting, one of the important consequences of having limited media choice was that radio and television could readily act as social catalysts, allowing a large proportion of the population to share what they experienced with their family and peers the same day or the next. Media consumption was synonymous with “flow channels”, where listening or watching programme lead naturally to the programme that followed.
How are public service media to contribute to the promotion of national and regional identities and a sense of community as well as building social cohesion in an age of social, cultural and linguistic diversity? In a post Cold War world coming to terms with globalisation and espousing consumerism as the mainstay of secular life, can we really claim that the tribal nature of watching national athletes or professional sports on television, events like the European Song Contest or the pageantry of a royal wedding in Denmark really binds us together as regions and nations in nation-states? Let us take a closer look at what is involved.
In a world of fragmented media channels, none of which commands the same sort of audience figures as they did 20 or 30 years ago, the viewing of “traditional flow” channels is no longer the norm. Researchers such as Herman Gyr explain changes in terms of several different moods or mental states. One of the most common states is the same as for analogue media, turning on the TV and following the flow. When the viewer encounters a programme of limited interest, one of the new options is “new flow” – viewing a selection of programmes that the viewer has already recorded.
From the viewer’s perspective, the Personal Video Recorder, PVR, can be regarded as a television channel with programming competing with all of the other channels available at the touch of a remote control device (RCD) button.
From the broadcaster’s perspective, however, the PVR can be regarded as a virtual TV channel with a “share” ranging between 5–40%, as studies from Belgium, the Netherlands and the UK indicate a considerable range in time shift viewing.
The shift from traditional flow to new flow has implications for cohesion. In the 21st century, simultaneous viewing for a significant proportion of the population will be limited to specific genres where “liveness” – a term coined by Kjus  is central to their appeal. Events, news, sports and certain kinds of fiction can still unite the nation: indeed in Denmark, recent flagships fiction productions such as Rejseholdet/ Force One, Krøniken/the Chronicle and Ørnen/the Eagle have reached all-time highs. Generally speaking, however, in a world in which traditional and new flow co-exist, the proportion of television programmes with “liveness” that have the ability to trigger widespread discussion is limited.
What new flow and asynchronous listening and viewing deliver instead is the potential of a higher weekly reach for nearly all programmes. Audience figures on radio and programmes that have been podcast or made available on-demand in various European countries suggest that specialist programmes broadcast at inconvenient times can benefit from the long tail phenomenon. The BBC IMP project that was completed in early 2006 reported that all of the programmes available on-demand were used at least once by participants (Deans ). Total listening and viewing figures increase as a function of the number of programmes. The only issue here is that of accountability and governance – can we measure the effect and integrate it into our overall measurements of reach?
While liveness and traditional flow contribute to a sense of belonging, asynchronous listening and viewing offer a more subtle public service benefit of social, cultural and political cohesion as the result of being more efficient in delivering content to those with specific interests and needs.
At this point, cross media (also termed “360 degree delivery”) becomes important. To harvest the benefits of the long tail, broadcasters have to do three main things:
· Change commissioning so that content areas, genre and target group requirements take precedence over channel commissioning
· make effective use of electronic programming guides before the event on a full range of platforms including teletext, digital text, digital television EPGs, the Web and electronic guides on handheld devices and
· make quality programme information available to power their time shift, place shift and on-demand services so citizens can access content after it has been broadcast.
In terms of identity and cohesion, we tend to underplay the growing importance of new media and the contribution they can make by engaging people in the creation of certain kinds of public service media.
Here are a few examples of the social consequences of citizen media:
· harnessing the Internet during an eclipse so that the nation’s schoolchildren can input their observations and in the course or an hour benefit from the collective efforts in tracking the path of such a rare phenomenon
· collecting and collating eye-witness accounts in the form of stills and videos from those who were there when London experienced 4 almost simultaneous bomb incidents in the summer of 2005
· integrating additional and rich layers of metadata about specialist content (amateur archeologists expanding and cross-referencing the descriptions of television programmes in their field of interest)
· PSBs working with citizens to develop wikis in areas such as national sports. (DR entered into an agreement with Wikipedia in june 2006 to do just that. Within months the Danish Wikipedia had the same breadth and depth of coverage as the biggest encyclopedia in Danish and was far more up-to-date).
· acting as a trusted forum for Web and mobile communities hinging on shared interests and needs, such as the youth community built around DR’s cross-media show Boogie that caters for young teenagers.
What does this all mean for the role of a PSB in the 21st century? In much the same way as the piper has to choose between folk melodies or something new to revitalise his repertoire, PSBs have to discuss with regulators the balance between traditional and new media in order to meet the requirements of their public service remit. There is a good case for PSBs taking a proactive stance on change, analysing what is happening and realigning strategies rather than ignoring or shunning change in media consumption. Broadcasters in general – and public service broadcasters in particular - need to accept that digitalisation is not “business as usual”. It is not just a matter of digitising analogue programmes and distributing them as flow channels via new digital transmission systems. Digitalisation represents a differentiation of media use and is a wonderful opportunity to re-examine public service obligations and rethink the balance of power between those who make content and those who use it.
2. Who pays the piper?
The raison d’être of a commercial broadcaster is to provide programming that attracts an audience, allowing the business to generate revenues and make a profit. Whether revenues stem from advertising, a pay-TV subscription, pay per view or sponsorship, he who calls the tune is the shareholder.
In his report on public service media in the information society, Nissen  summarises the various sources of funding for commercial and public service broadcasters and discusses the implications of the various funding models for commercial and public service media. The sources of funding are shown in figure 2. The thick arrows indicate the predominant funding models for each type of media organisation:
Figure 2. Funding models for broadcasting
While commercial broadcasting is about providing shareholders with a return on their investment, the aim of public service media is very different - to provide all citizens in a given society with a public service regardless of the source of funding. What do stakeholders expect of public service? Answers to this can be found in a number of studies including Sancho  which is interesting in that it involves public service commercial broadcasters in the UK.
The most clear-cut funding model is revenue from a broadcasting licence collected by an independent body. In this case, public service broadcasting is regarded as a common good as is the case for education, police, and other essential services. As a consequence, collective funding is a rational way to do this. Viewers pay collectively and the PSB is answerable to its public – ultimately they call the tune. The broadcast licence funding, however, is not widespread and is largely confined to the UK and the Nordic countries.
More commonly in Europe, PSBs are financed by a combination of and state funding from taxation. Advertising in European PSBs can account for as much as 40% of operating funds. The problem is that advertising as a funding model is under pressure on at least two fronts, changes in media use and from the growth in number of television channels.
As far as changes in viewing behaviour is concerned, viewers are gradually assuming control over what, when and where they watch. Time shifting and on-demand make it more difficult for advertisers and brand owners to get their message across to consumers.
The advertising model is also negatively affected by the mismatch between supply and demand. The huge increase in the number of television channels available in most countries has exacerbated the problem as the overall advertising spend has not kept pace with the increase in programming output (more channels transmitting for more hours per day).
An alternative approach to generate more operational revenue is to define certain activities as having an individual rather than collective focus and to introduce user payments in order to cover marginal distribution costs arising from personalised services. The Norwegian PSB NRK has been authorised to generate at least 10% of its operating revenues in this way. The experience to date is that – with the exception of mobile TV – it is difficult to explain the case for pay-per-use solutions where everything was previously covered by licence fee revenues. A typical consumer response is “We’ve already paid the licence. Why do we have to pay again?”
As was documented in a study a few years ago by the McKinsey consultants [McKinsey (1999)], PSBs funded by a combination of advertising and state funding suffer not only from the vagaries of the advertising market but also from the lack of political continuity and short-termism making medium to long-term planning and investments particularly difficult.
As Nissen (2005) observes in his report, ”In ... a politicised communicative landscape it is no wonder that those in charge of public interests in PSM (i.e. politicians in government and parliament) are sometimes tempted to encroach on public media corporations. “If you can’t prevent the newspapers and commercial radio and TV from disseminating all the wrong stories and cannot force them to communicate your own gospel, the least you can do is to make sure that ‘your own radio and TV’, the public broadcaster, is kept in line”. To cite a politically-appointed member of the governing board of a minor Western European public broadcaster arguing for his right to intervene in programming: ‘He who pays the piper calls the tune’.”
State funding or a hybrid model of advertising and state funding run the risk of compromising good governance of the PSB. Can an acceptable solution to this problem be found?
3. Should he who pays the piper call the tune?
While it is legitimate for a government to ensure that information about its policies and activities are made available to its citizens, this is not necessarily the justification for demanding that PSBs be under direct government control.
As Nissen  observes: ”...editorial independence is not limited to public media. It is a well-established principle in any free press. The editorial policy of a newspaper that lives up to fundamental ideals of journalism should not be decided by outside forces, whether they be politicians or representatives of economic interests. Even the owners of a newspaper should limit their influence to the appointment and dismissal of the editors and not interfere with the content of the daily paper.
The reason behind this principle is very simple and boils down to an issue of “trustworthiness”. Censorship and other limitations of free speech – whether formally enforced or self-imposed, restrictions imposed by governmental or by others – is contrary to the basic principles of an open and pluralistic society.”
He goes on to mention that within Europe there are still citizens with clear memories of being subjected to autocratic rule without any watchdogs to safeguard basic civil rights. ”How can you trust the news bulletins if you suspect the editors of being marionettes hanging from strings guided by the hands of government?”
Striking a balance between the need for accountability and editorial independence can be done. The benefit of maintaining arms-length control over the running of PSBs is the credibility of news coverage and ultimately the credibility of the regime that allows a constructive yet critical view of the workings of society.
So should he who pays the piper call the tune? For both public service and commercial broadcasting there is a case for NOT doing so even if there is a legal framework that would permit it.