Right now, we'll move to the television is an industry issue.
And this is not a very simple question.
When exactly television became an industry,
and when exactly television became a commercial?
Just because in the majority of European countries,
until the end of 1980s television was included into this system of state broadcasting.
So, commercial market didn't exist before this period.
So, and partly on the radio.
So, from this point of view,
especially on European markets,
this is a relatively new industrial player.
Before, it was just the state service or if you want, the public good.
So, and these strong state monopoly for their broadcasting was will say
guaranteed that their number of available frequency for broadcasting was very limited.
That's why state said that state will own this monopoly,
the state monopoly for their broadcasting just because the number of
frequencies which you can use for
television broadcasts especially terrestrial television broadcasts was very limited.
So, television and radio,
therefore, was probably corporations, under state control.
And they're sometimes with it directly subordinated to
the Ministry of the telecommunication and some others.
So, it was a public goods,
funded by tax models,
directly by the state.
And in some states,
the tax or license fee was introduced.
But the industry was absolutely free from commercial principles.
No commercial broadcasters was allowed to broadcast,
because all frequencies was under control of the state.
But in 1980s, 1970s,
we can observe the common phenomenon in the majority of European countries,
the phenomenon of deregulation.
So, proliferation of alternative way of
distribution especially satellite cable distributions,
which created this phenomenon of deregulation when
the states started to
introduce the commercial broadcasters to the market.
And some channels has been even privatized in particular countries.
Such as in France for example,
the first television channel was privatized.
So, from this point of view,
some channels was privatized and some other channels remained the public service.
And even in some countries
there was strong pressure over this public broadcaster to be more effective,
to be commercially more effective, et cetera, et cetera.
And in some countries,
the advertising has been introduced on public TV or even restricted.
But it created especially in Europe,
there what we call the double system,
the system of their coexistence of their commercial broadcasters,
with their so-called public broadcasters.
Why such coexistence needed,
why it was developed,
now will try to answer this question here,
in the very simple manner.
The problem of commercial TV is that commercial TV provide a permanent market failure.
Why? Because if you will take an example of the television channel X,
or television channel Y,
you will see that the television channel,
if these television channel is making their entertainment program.
Entertainment program attract much more audience than any other television channels,
if these television channels make the political content.
For example, political talk show or political debate.
So, from this point of view,
television channel which broadcasts entertainment always will be much more popular,
and much more effective in terms of attracting audience,
than the television channel which will be educational channel
or which will be political content channel, et cetera, et cetera.
Which means that finally from commercial point of view, the television channel,
entertainment television channel will have
much more money than that television channel with the political content.
So, from this point of view media tends to maximize the audience that can be
sold to the advertiser as
a commodity and it gives that privilege to entertainment content,
but not to the socially important content
for the whole society such a political content or educational content on some part.
And in order to balance the system,
in order to be able to produce the content which is not
dependent from the number of audiences but important for a whole society,
the European model creates such kind of support until now this principle of public TV.
Public TV means that society
via our particular representative institution that could be Trust,
it could be particular council as CSA France,
et cetera, are forming the board of broadcaster.
And these board is managing the broadcaster,
and produces the programs devoted to support the public interest.
The main question with which money produced it?
Mainly, there are a few principles but
majority of them is not linked with the amount of audience.
First idea is the idea of the commercial broadcaster.
So, the public broadcaster spend their money coming from commercial broadcasters.
For example, all commercial broadcasters should pay particular tax, tax for revenue.
It means that the part of their revenue coming from the commercial broadcaster
are collected in this special fund and this fund
is used then to finance their public television.
Or it could be the direct model where you have a licence fee as in Great Britain,
where you should every people possessing
the Tele TV set should pay annually a sort of tax.
It's their sort of tax just because you can opt not to pay it.
It's like they're all tax,
it's like a lot of other tax.
You should pay it. Even if you don't watch this television
because this is for all the people, for whole society.
And they're using also some institutional restrictions for such kind of television.
For example, amount of advertising in some countries,
the advertising could be prohibited or
even the amount of advertising in public channels is restricted.
The time slot for advertising could be limited.
It could be some kind of limits for in-house production.
So, you can not broadcast more than 40 percent of,
for example, programs produced by this television network,
which force this television network to invest into
the independent television productions producers which finally,
of course, create their particular market or competition in field of quality of programs.
And a particular fixed licence fee also.
This is a model of BBC.
Instead of growing up each year the price for their licence fee,
the state for the next five years fix their licence fee rate,
which means that they broadcast on the stand perfectly that it
will be able to increase each year the amount of money coming from tax pay.
Which means that he will try to optimize the Broadcasting to find their way
to finding an economy with these production, et cetera, et cetera.
So, of course, all these principles but the main idea is
to provide the society of
particular programs devoted to the public interest such as debate,
political debate, even some particular programs which are important for all.
Such as educational, for example,
program or program about the culture,
or program for minorities.
You cannot commercialize the program for minorities
because they're initially have a very short,
very a shrink to audiences.
Iliya KiriaProfessor
