COMMERCIAL TV STATIONS PROPOSE MORE RESTRICTIONS ON SPONSORSHIP AND ADVERTISING ON ČT
Sponsorship of only longer programmes, limited number and length of sponsorship messages, limitations on product placement and advertising on ČT sport, and zero advertising online are some of the ideas of commercial broadcasters about changes in the placement of commercial messages on Česká televize (Czech Television, ČT).
Pavel Kubina, a long-time media lawyer, is a member of the Board of Directors of the Association of Commercial Television (AKTV), which brings together the most important domestic commercial television stations. He has moved from the position of Director of the Legal Department of FTV Prima to the position of Director for Media Law Issues as of February 2024. He focuses on legislation related to television broadcasting, media content and the advertising market and also deals with the issues of copyright, personality protection, anti-piracy, and artificial intelligence.
Much has been happening in the field of media legislation in recent months. We therefore talked to Pavel Kubina about the upcoming amendments to the Czech Television Act and the Radio and Television Fees Act, the upcoming new amendments to the Audiovisual Act and the new European media regulation EMFA. We also touched on how the big commercial TV groups are progressing in the fight against pirated content.
Probably the biggest current legislative topic is the preparation of the so-called major media amendment, which includes changes to the Czech Television Act, the Czech Radio Act and the Radio and TV Fees Act. After the Ministry of Culture submitted a proposal last year to increase the TV fee by CZK 25 to CZK 160 and the radio fee by CZK 10 to CZK 55 and to extend the basis for collecting the TV fee to mobile phone and computer owners, the entire commercial media market responded with rejection. Based on this reaction, working groups were established in which both public service and private media were represented. However, whether they agreed on anything and what the revised draft of the major media amendment might look like is not known at the moment.
Since the beginning of January, working groups have been meeting at the Ministry of Culture to discuss possible proposals for amendments to the Czech Television Act, the Czech Radio Act and the Radio and TV Fees Act. However, it is unclear at this point how the preparations are progressing. Has there been any consensus within the groups?
At the moment, we have been informed that a solution will be created based on minimalist amendments to the Czech Television Act and the Czech Radio Act and a memorandum where the tasks of the public service are to be described in more detail. We had the impression that the draft wording of the amendments to the two Acts would result from the discussions within the working groups but a separate dialogue between the Ministry of Culture and Czech Television and coalition negotiations were going on in parallel. We will see what the outcome will be.
Earlier statements by representatives of the commercial market and information leaked out regarding the preparation of the new draft version of the laws showed that the commercial market had brought its proposal for changes to the amendments to the laws. Can you mention any specific proposals that you think the amendments should contain?
Yes, we have provided the Ministry of Culture with our proposals. Our premise is that we want to preserve the dual system, i.e. the coexistence of the public service broadcaster and private broadcasters, to ensure media pluralism. However, in order to set up the dual system correctly, we consider it crucial to define the public service as precisely as possible. In our view, it is important that someone on behalf of the state articulates what is considered to be the public service. European law requires the definition of a public service to be as precise as possible to determine what a public service is and what is not. It is entirely up to the Member State to determine what it wants and does not want as a public service. The definition of public service should certainly not be as all-encompassing and flexible as it is now, the state should not be passive and public service broadcasters should not de facto define their role themselves.
Is defining the role of the public service primarily a task for the Ministry of Culture in your opinion? Or who should define it for the state?
We believe that this is primarily the responsibility of the Ministry of Culture. Someone has to formulate the state demand. That is the core. Unfortunately, in our country, it started the other way round: it was said what the fees should be but it was not specified what the public service was. The debate on the definition of a public service has never been completed. That is why we are not saying that the proposed amount of increase or extension of the fee is correct because we still do not know what a public service is. The requirement for a precise definition of the rules on public service aid is also justified by the protection of competition and the position of the commercial media in that competition. The current Czech Television Act describes public service only vaguely. It uses examples to list the main tasks, which means that there are some other tasks but it is not clear which ones. There are terms such as multimedia services, additional services... It is hard to imagine what all these terms actually mean.
How should this be treated in legislation? By extending the existing definition in the Czech Television Act or by adopting a special document or charter Minister of Culture Baxa talked about?
The definition of public service should certainly be legally binding. We think that the most basic definition should be in the law. It would be good to provide further clarification in a document that we refer to as the Binding Public Service Rules. We have the idea that these rules would be updated every five years and that they would be approved in a way similar to the Czech Television Code, i.e. in the Parliament. There should also be a procedure in the law for approving new or substantially changing the existing services. This follows from European law. We propose that the services should be approved by an institution other than Czech Television - for example, the Council for Radio and Television Broadcasting (RRTV) or the Czech Television Council. The institution would assess the adequacy of costs, the impact of such a service on the media market and a number of other things.
The definition of public service should certainly not be as all-encompassing and flexible as it is now, the state should not be passive and public service broadcasters should not de facto define their role themselves.
So what do you think is the key to maintaining the dual system? The specification of the public service?
We see as a priority the refinement of the definition and tasks of the public service, the introduction of binding rules for the performance of the public service and the introduction of a process for the approval of new services. Until this is in place, fees should not be addressed. We know that the Ministry of Culture is working more with the idea of a memorandum that the public service broadcaster would draft, then negotiate with the Council of the Czech Television or the Council of the Czech Radio and then the Minister of Culture would sign it. We feel that the approach to the process of developing the memorandum is rather unfortunate because there is no space for the state to actively articulate its demand. If the conclusion is that there is a memorandum that is adopted in this way, we would certainly want the fee increase to be conditional on the memorandum having already been concluded, and on the commercial media having an institutionalised opportunity to participate in negotiations on its content.
Advertising limits for commercial and public service broadcasters are an essential part of the dual system setup. Commercial broadcasters are allowed higher limits for the placement of advertising and other commercial messages. Czech Television is also allowed to include a certain volume of commercial messages, albeit much lower. Do you call for higher limits on commercial messages or do you have an idea of a completely ad-free Czech Television?
We see sponsorship as the main problem because it has developed into a form on ČT that, in our opinion, the legislator did not intend. Sponsorship on ČT is largely interchangeable with advertising for sponsors and viewers, and although it complies with the current legislation, its form obliterates the original idea of limiting the scope of ČT’s commercial activities. The legislator intended to introduce lower limits on commercial communications for public service media than for private TV. We therefore propose that ČT should only be allowed to sponsor longer programmes, of 30 minutes or more, with a maximum of two sponsors and a sponsorship message of no more than 5 seconds. As far as advertising is concerned, i.e. classic spots, we believe that the ČT sport programme should operate in the same regime as other ČT programmes; advertising could thus be included only if its placement is a condition for obtaining broadcasting rights to a given sports competition. We believe that product placement should also be reduced. It could remain for sports programmes, but for others we see no reason to do so. There should be no online advertising - neither on the internet nor in on-demand services. However, we acknowledge that it would be necessary to retain online sponsorship of production that took place within a TV show.
Sponsorship on ČT is largely interchangeable with advertising for sponsors and viewers, and although it complies with the current legislation, its form obliterates the original idea of limiting the scope of ČT’s commercial activities.
Given the time lag, there is growing uncertainty as to whether the amendments will make it through the Chamber of Deputies in time to enter into force in 2025. What are your ideas about the timing of the next steps?
As commercial broadcasters, we need legal certainty, which we don’t have now. We want to get the amendments sorted out as quickly as possible, but until there is a more precise specification of what constitutes public service broadcasting, the preparations cannot move forward. Otherwise, we agree that it would be good to get the amendment through as quickly as possible. This means that the revised texts of the amendments should be submitted to the government by the summer so that they can begin to be debated in the Chamber of Deputies.
Discussions were also held on the form of the amendment to the Audiovisual Act. According to the July 2023 agreement, the fees for the Czech Film Fund or Audiovisual Fund are to be increased to 2% for all audiovisual market participants, including video-on-demand services. How has the drafting of the amendment progressed?
The level of the fee was just one of the topics, a number of other topics were debated, and not everything was reflected in the proposal that has already gone to the government. We hope that our comments will be included in the text, at least in the form of amendments.
What are the specific requirements?
The draft amendment retains the supplement to the TV advertising revenue fee, which amounts to 2% of the annual advertising revenue. It ensures that the Fund collects at least CZK 150 million from TV stations. However, in our opinion, in times of media convergence and changes in viewing behaviour, this surcharge of up to CZK 150 million is no longer justified.
Furthermore, we do not consider it good that on-demand services that are funded only by advertising are also subject to the on-demand service charge. This is because they compete with on-demand content-sharing platforms, which are not subject to the fee. This puts Czech operators at a disadvantage. We also believe that specialised on-demand services, such as sports, music or news and journalism, should not be subject to the fee.
In our opinion, the proposal should have been refined so that one service could not be charged twice.
We also find it problematic that the proposal significantly favours independent producers when it comes to TV production. It is good that the range of supported formats has been extended to include small-screen formats. However, the proposal is designed in such a way that only independent producers can apply for the incentive and they still have to prove a share of the rights corresponding to the support drawn. Sometimes, however, these companies are in the position of being just producers, and the creative part is up to the television. Or the TV station finances the creative part. So the law effectively extorts the wealth of one type of market entity at the expense of another. In our view, contractual freedom should work in this respect.
In our opinion, the proposal should have been refined so that one service could not be charged twice.
The European Parliament has recently approved the European Media Freedom Act (EMFA), which will be incorporated into national legislation in the coming months. What is your assessment of the text of the EMFA?
As representatives of the commercial market, we are in favour of the lowest possible regulation. We do not see the EMFA as indispensable. On the other hand, there are some positive elements. These include the guarantee of non-interference by politicians in editorial activities. The EMFA also introduces a new European Board for Media Services to oversee the implementation of the legislation. The question is who will represent the Czech Republic in this body and which authority will have which competences. We will have to wait for a decision.
The EMFA also relates to the ability of media operators to resist the deletion of content by major internet platforms. How much weight do you attach to this regulation and what can it realistically cause?
It is good that such a procedure exists. The important thing will be who is to be the media service operator that can use such a procedure. We do not want state, and certainly not private, lists of good and bad media to decide which media deserve protection.
AKTV has long been supporting the protection of copyright on the internet. Several recent court decisions, as well as the adoption of the European Digital Services Act, give hope for more effective action against pirated content. Do you see the situation changing?
Previous legislation already had the potential to solve the problem, but legislation alone is never enough and there must be a workable decision-making mechanism. Moreover, in the case of pirated content, it is important that decisions are taken quickly. The fact that the DSA was adopted had no immediate impact on our cases.
We were successful at court several times in the past, and as a consequence, we have entered into a number of agreements with platform operators to put in place anti-piracy measures that have so far proved effective. But unfortunately, there are still some platforms that keep applying piracy practices and are fighting back by dragging out the court proceedings. Unfortunately, the courts do not always understand the true nature of the pirate platforms’ business, which is competitive with the media or legal services. Sometimes this leads to results such that we have success in litigation but it comes so late that it does not matter anymore.
In our view, in the first round, the pirated content should be made unavailable on the relevant platform at the request of the rights holder, and if this is not done, the entire service should be made unavailable in an administrative procedure.
What measures would help speed up the effective prevention of the dissemination of pirated content?
We have found the unfair competition route to be more viable and much more understandable to the courts than copyright law. What is effective is the issuance of a preliminary injunction. Possible non-compliance leads to fines, the amount of which may be significant for these platforms, at which point they become interested in settling the situation.
But it is time for a radical cut because the level of internet piracy in the Czech Republic is still high compared to developed European countries. It is not only investors, authors or artists who are losing money due to piracy but also the Czech Film Fund and the National Film Archive.
We believe that these matters should be decided in an administrative procedure with fixed time limits for decision-making. In our view, in the first round, the pirated content should be made unavailable on the relevant platform at the request of the rights holder, and if this is not done, the entire service should be made unavailable in an administrative procedure. It is very important that the protection is also applicable for the future, e.g. for future episodes of an ongoing series.
Such an administrative process exists in Greece, and we consider it to be quite transferable to the Czech legal environment. A similar administrative process also exists in Italy. We are convinced that such a solution is cheap and can bring a lot of money to the state and the institutions mentioned.
It would be appropriate to include such a provision in the amendment to the Audiovisual Act or to the forthcoming Digital Economy Act.
Pavel Kubina is the Director of Media Law Issues at FTV Prima and since February 2024, a member of the Board of Directors of the Association of Commercial Television (AKTV). He has been working in media law since 2001 when he joined the management of the Legal Department of FTV Prima. Since February 2024, he has been appointed Director of Media Law Issues.
Source: mediaguru.cz
