September 2023 - The Association of Commercial Television

THE PROPOSAL TO INCREASE MONEY FOR ČT IS SHOCKING AND UNACCEPTABLE WITHOUT DISCUSSION

The proposed major media amendment to provide more funding for ČT (Czech Television) and ČRO (Czech Radio) cannot be adopted without a discussion on the role of the public service. the discussion should have been held at the beginning of the preparation of the new legislation, says president of AKTV, Klára Brachtlová.

The Ministry of Culture has prepared a draft amendment to the Czech Television Act, the Czech Radio Act and the Radio and Television Fees Act (the “major media amendment”) without defining the tasks and content of the public service. This is unacceptable according to Klára Brachtlová, President of the Association of Commercial Television (AKTV), which brings together the largest commercial television groups Nova, Prima and Óčko TV. Without this step, it is impossible to quantify the amount the public service media should receive, she adds. She also says that the commercial TV companies were shocked by the draft of the major media amendment, which would lead to an increase in fees for ČT to CZK 160 per month and for ČRo to CZK 55 per month, because they were not invited to discuss its wording.

In its statement, the Association of Commercial Television has given several reasons why it does not agree with the major media amendment. One of the reasons you gave was that the bill should have been preceded by a discussion on what the public service should contain. Does AKTV have an idea of what the public service should look like in respect of television broadcasting?

The question of the design of public service broadcasting has no simple answer. The definition, which exists in some form, is one thing but its codification is another and more difficult one. We take our inspiration from Western countries, e.g. from the BBC, which defines the public service through the pillars of strategic priorities. I would prefer a more specific definition including commitments on the number of hours devoted to specific content formats. However, what we are facing is that there has been no discussion on this topic in our country. It should take place with the participation of media experts and should be at the beginning of the preparation of legislative changes.

AKTV is not the only one talking about the need for such a discussion. Who should organise it and where should it take place? Are the Chamber of Deputies or the Senate suitable institutions for such a debate?

We can draw on the recent experience we have with the discussion of the amendment to the Audiovisual Act. To discuss the amendment, the Ministry of Culture organised a working group comprising all the entities concerned. We think that the discussion on the amendment to the Act on Czech Television requires the same. This is an important change affecting the entire media market and it is absolutely necessary to hold such a discussion.

On the other hand, Culture Minister Martin Baxa said at a press conference where he presented the major media amendment that the proposal is the result of a year of preparation. So, there must have been some discussions.

Our belief was based on the fact that Minister Baxa publicly stated in July 2022 that the government would not increase the licence fees during its term of office. This made the resulting proposal all the more shocking to us. We were not invited to any group or informed of the text of the bill. Nor is it true that the Minister of Culture has been in close contact with the commercial TV broadcasters in respect of the draft amendment as he claimed at the press conference.

So, until the last moment, by which I mean the public press conference on 5 September, you had no idea what the amendment contained.

Exactly. We learned about it only from the press conference and then from the documents that the ministry put into the inter-ministerial comment procedure, i.e. directly into the legislative process.

It is right that the state is concerned about sustainable funding for public service media, but it must start from the other end. It must be known in detail what Czech Television uses the money for, the strategic priorities of the public service must be defined, and only on the basis of these steps should it be quantified how much Czech Television and Czech Radio need for this service.

What was the biggest surprise for you? The proposed amount of the TV fee or the expanded definition of a payer?

We understand that the Czech Television Act is thirty years old and that at the time of its preparation it did not take into account the possibilities of viewing media content that are offered by new technologies. From this perspective, the extension of the definition of a payer is understandable. However, we find the proposed amount of the TV licence fee shocking. The Ministry expects Czech Television to collect an extra CZK 1.4 billion in fees from households. This is an extra-large amount of money, and in such a case it must be defined what Czech Television will use these funds for. Otherwise, they may be invested in activities that may not be related to the public service. It is right that the state is concerned about sustainable funding for public service media, but it must start from the other end. It must be known in detail what Czech Television uses the money for, the strategic priorities of the public service must be defined, and only on the basis of these steps should it be quantified how much Czech Television and Czech Radio need for this service. And I am leaving aside the fact that there is an ongoing debate throughout Western Europe about whether licence fees are the right way to finance public service media (see the box at the end of the text, Ed.). In addition, the bill includes changes to the collection of fees from corporate payers, which is an additional CZK 400 million. This brings the total to just under CZK 2 billion for ČT.

From the perspective of Czech Television and Czech Radio, however, the argument of price increases since the last adjustment of the TV and radio fees 15 and 18 years ago, respectively, is logical. In that time, prices have risen more than the proposed fee increase. Thus, according to ČT’s estimate, the fair value of the fee this year is CZK 97, not CZK 135, i.e. 40% lower.

Yes, but if we compare the budgets of all Czech TV stations and see that the costs of ČT in production are two billion crowns, which means that ČT invests this amount of money in content every year, this is an incredibly high amount of money. We must therefore ask again why there is no audit of what ČT is spending money on and whether the investment is being directed towards public service activities and why the audit is not followed by the calculation of the amount for which the investment in ČT needs to be increased.

Czech Television has introduced a savings plan for 2023 and 2024, which intends to save a total of CZK 910 million for these two years. On average, this is more than CZK 450 million per year.

ČT’s CEO, Petr Dvořák, said that CZK 2 billion would be in Czech Television’s accounts this year. The source of this money is the aforementioned savings and the VAT refund from 2011 and 2012 in the amount of CZK 460 million (higher VAT deductions can be used by ČT and ČRo until 2024, Ed.). In our opinion, ČT has sufficient reserves to continue operating under the current financing scheme for at least two more years. This means that the discussion about the role of the public service and its form can take place without putting ČT’s operation at risk.

ČT has sufficient reserves; the discussion about the role of the public service and its form can take place without putting ČT’s operation at risk.

In its statement, AKTV also noted that the draft amendment provides for an increase in the TV fee but maintains advertising on ČT. The volume of advertising on ČT is currently limited to 0.5% of daily broadcasting time. In addition, ČT can only use two of its channels for advertising. The remark may suggest that AKTV would be in favour of removing advertising from ČT altogether. Is that right?

Yes, it is. We are not just talking about traditional TV advertising but also about sponsorship, which is also advertising from the TV viewer’s perspective. But the law distinguishes between the two types of commercial communication. ČT receives around CZK 250 million a year from sponsorship alone, which is money that belongs to the commercial market. Our position is therefore clear: public service media should not compete with commercial media in the way they finance their operations.

But if we take into account the current situation on the TV advertising market, which is basically dominated by two entities – TV Nova and Media Club – they are reaching the limits of their advertising capacity. Would the commercial TV market be able to absorb this money?

The point is that sponsorship has a different legal definition and is not subject to the legal limits of traditional advertising. Commercial TV stations have room to absorb this money.

Public service media should not compete with commercial media in the way they finance their operations.

Your statement also mentioned the connection between the amendment to the Audiovisual Act and the amendment aimed at increasing fees for ČT, which was Minister Baxa’s argument according to your communication. Could you elaborate on that?

There is no connection between the preparation of these two amendments, although the Minister suggested otherwise. In the light of the media amendment, however, it should be recalled that the amendment to the Audiovisual Act obliges commercial entities to pay 2% of their annual income from streaming services, plus it introduces a new obligation to invest directly in Czech audiovisual production. The amended law is expected to enter into force in 2025, which will subsequently bring a significant amount of money into the market. Combined with the increase in money for ČT, the volume of funds on the audiovisual market will increase significantly. Therefore, we are seriously concerned about market volatility and high input price inflation. We are a small market, with limited capacity, and we are already encountering this in many cases. Now imagine that in one year there will be an extra two billion crowns on the market.

PUBLIC SERVICE MEDIA FUNDING IN EUROPE

• Funding through a FEE PAID BY INDIVIDUALS. Countries where licence fees are collected include: Czech Republic, Croatia, Ireland, Germany, Poland, Austria, Slovenia and Great Britain.

• Public service media funding from a BUDGET prevails in Belgium, Bulgaria, Estonia, Cyprus, Lithuania, Latvia, Luxembourg, Hungary, Malta, Netherlands, Romania, Spain, and Slovakia.

• A less frequent way of public service media funding includes payments made TOGETHER WITH ELECTRICITY as is done in Italy, Portugal and Greece or collecting fees through special tax on public service broadcasting as in Finland, France and Sweeden.

• NORDIC COUNTRIES: broadcasting tax instead of licence fees (Norway, Island, Finland, Sweeden).

EXAMPLES OF CHANGES IN CERTAIN COUNTRIES

• NETHERLANDS: licence fees were abolished in 2000; since then, the Dutch public service broadcaster Nederlandse Publieke Omroep (NPO) is essentially financed by annual state subsidies.

• DENMARK: transition from licence fees to state budget funding. In Denmark, the licence fee was paid from 2018 until the end of 2021, replaced by state funding from 2022.

• FRANCE: In July 2022, the French Parliament approved the end of the payment of licence fees; the abandoned model is replaced by a minimum VAT increase.

• AUSTRIA: In the first half of 2023, it was decided that ORF would change its funding system. The new model will reduce the licence fee: it will now be EUR 15.30 per month (per household) instead of GIS (linked to the device).

• SWITZERLAND: TV and radio fees make up 81 percent of the budget of the non-profit public corporation SRG SSR. Following a referendum held several years ago, the fee structure was changed. Instead of CHF 451 per year, CHF 365 per year were paid from January 2019. In January 2021, the fees have dropped to CHF 335.

• NORWAY: Until 2019, NRK was financed through a licence fee linked to the ownership of a television set, but this model has been abandoned. Since 2020, NRK has been financed from the state budget. Anyone with a certain income must pay an amount to fund NRK through taxes. In practice, an ordinary household pays roughly the same amount in NRK tax as it used to pay in broadcasting tax, but the tax is no longer linked to the ownership of a TV set.

• GREAT BRITAIN: Discussions have been ongoing since last year about how the BBC will be funded in its next cycle of operation, from 2027. Different options for future BBC funding are being considered.

KLÁRA BRACHTLOVÁ, PRESIDENT OF AKTV: She has been President of AKTV since the start of 2023, in January she was appointed Chief External Affairs of CME, the parent company of TV Nova. She was working in the finance section of Nova Group from 2007. She gradually held positions in reporting, financial planning, and analyses, she was Deputy CFO from 2012, CFO from 2014, later statutory executive, and in 2019, she became CEO of TV Nova.

Source: mediaguru.cz

COMMERCIAL RADIO COMPANIES: THE DRAFT AMENDMENT POSES A THREAT TO THE DUAL MEDIA SYSTEM

Commercial radio networks organised in the Association of Private Broadcasters (APSV) reject the draft of a major media amendment and consider it a threat to the dual media system.

Commercial radio companies that are members of the Association of Private Broadcasters have also spoken out against the so-called “major media amendment”, which is supposed to bring more money to Česká televize (Czech Television) and Český rozhlas (Czech Radio) by increasing the television and radio fees. In their statement, they claim that they were not consulted in any way on the draft amendment, that they were bypassed by the Minister of Culture and that “no government in power since November 1989 has shown such a lack of dialogue”. The commercial radios are concerned that the ministry has not justified the “real need” for the fee increase and that the proposal contributes to the threat to the dual media system.

“We, therefore, reject the submitted proposal as a whole and call on the Government of the Czech Republic to withdraw the proposal from the inter-ministerial procedure and to initiate a real debate on the role of public service media in a technologically and socially changing media environment,” calls APSV.

According to APSV, the submitted draft media amendment demonstrates a “profound misunderstanding of the media environment and the development and direction of the market”. They also point out that there is no definition of public service and that opening up a debate on this topic is a prerequisite for any modification of the current funding of public service media. “In the radio market, it is absolutely clear that, for example, the existing digital stations, which are also financed from licence fees, have not justified their existence from either a technical or a listener perspective, and it is not even clear what public interest they fulfil,” APSV states.

Representatives of the commercial radio market are also bothered by the fact that the bill continues to provide for the presence of advertising and sponsorship in the ČRo broadcasts and on the internet. “The draft thus tilts the balance of the dual system one-sidedly towards the public media,” APSV claims.

The Association of Commercial Television, the Union of Publishers and the Internet Development Association (SPIR) have already expressed their opposition to the draft media amendment.

Czech Culture Minister Martin Baxa (ODS) said during the publication of the draft amendment that the governing coalition wants to ensure the stability of public service media. He argued that the amount of fees had not changed in 15 or 18 years and that commodity prices had risen by tens of percent in that time. Thus, the proposed fee increases would not exceed the rate of inflation over that period according to the Minister.

According to the Ministry of Culture submitting the draft, stakeholders can also comment on the proposal in the ongoing inter-ministerial comment procedure.

“The bill does not contain any provisions that would give rise to concerns about market imbalance, the principle of financing public service media remains the same, i.e. from licence fees. The volume of advertising for public service media does not increase in any way over the current situation,” Petra Hrušová from the Press Department of the Ministry of Culture responded last week.

Source: mediaguru.cz

ACE SHUTS DOWN “MASSIVE-SCALE” FRENCH PIRATE SITES

The Alliance for Creativity and Entertainment (ACE) has shut down Uptobox and Uptostream, two of the digital piracy world’s most notorious illegal video hosts.

According to ACE, the action, conducted in France and the United Arab Emirates, puts an end to a piracy operation that was well known for a decade among distributors of infringing content. The illegal service boasted massive audiences, mainly from France, but also from Indonesia, India and Mexico, with 1.5 billion visits over the last three years. The services hosted a sizable infringing library of film and television titles affecting all ACE members and many other rightsholders, allowing users to stream and download copyright-protected content at no cost or through a paid premium subscription.

The two French nationals who ran the illegal service are based in Dubai, where they amassed illegal gains from selling advertising and premium subscriptions.

Commenting on the shut down, Jan van Voorn, executive VP and global content protection chief of the Motion Picture Association and head of ACE, said: “The action we announced today demonstrates that even the most sophisticated piracy operations are not above the law.

“This case sends a strong message to criminal operators that their illegal actions will be put to an end eventually. They may think their operations are undercover, but ACE has the network, resources and expertise to identify them and shut them down”.

Céline Boyer, head of content protection at Canal+, added: “Canal+ supports swift action when acts of piracy compromise intellectual property rights, which in turn has an impact on our business.

“Our partnership with ACE is essential to ensuring that the creative marketplace continues to thrive by addressing content piracy at its source”.

Nathalie Bobineau, senior VP of international development of French public broadcaster France Televisions, said: “France Televisions has zero tolerance for piracy and illegal distribution of content and channels.

“By collaborating with ACE, we reinforce our commitment to upholding the principles of copyright protection and preserving the value of original content”.

ACE is the world’s leading coalition dedicated to protecting the dynamic legal market and reducing digital piracy.

In some cases involving illegal operations in France, ACE and the MPA collaborate with French anti-piracy association ALPA, who, earlier this year, obtained a blocking order for Uptobox and Uptostream in France.

Source: broadbandtvnews.com

STATEMENT OF PROFESSIONAL PUBLISHING ASSOCIATIONS ON THE PROPOSED “MAJOR MEDIA AMENDMENT”

Czech publishers represented in professional associations SPIR (Association for Internet Development) and UV (Union of Publishers) demand an expert discussion on the financing of public media and their role alongside commercial media. They criticise the fact that the introduction of the amendment to the acts on Czech Television, Czech Radio, and radio and television fees (the so-called major amendment on public service media) was not preceded by any professional discussion with the media sector and that the proposal skews the balance between commercial and public service news publishers.

First and foremost, we regret to say that such a significant increase in the budget of the public media was not preceded by the necessary discussion, which would have included the professional associations representing the providers of news content. These organisations are in permanent competition with the public service media. We fully appreciate the importance of the public service of ČT (Czech Television) and ČRo (Czech Radio) in the democratic organisation of our country and we do not question the importance of their existence by this statement at all. However, in an information environment that is increasingly moving online, there must also be strong private media to ensure the balance. Unlike public service media, private media are subject to market principles and therefore have to compete for their revenues through competitive mechanisms.

In conjunction with the continuous shift of public service media to the internet and the proposed extension of exemptions from online advertising, which is crucial for media funding, we are concerned that the proposed changes could have a very negative impact on private media, which form an essential part of the media and information scene.

The professional publishing associations have therefore jointly addressed the government representatives with a request to hold an expert discussion on the position and evaluation of all models of possible financing of public service media on the Czech media market before submitting the bill.

In our opinion, the submitted draft Amendment to the Act on Czech Television and Czech Radio and the Act on Radio and Television Fees with its current wording is completely inadequate, has not been discussed with the affected entities and would represent a major disruption of the stability of the entire media sector. We therefore categorically disagree with the proposed amendment and request that it be withdrawn from the legislative process and thoroughly revised.

Source: spir.cz

COMMERCIAL TV COMPANIES DEMAND WITHDRAWAL OF MAJOR MEDIA AMENDMENT

The commercial television groups Nova, Prima and Óčko show their displeasure with not being invited to discuss the proposal to increase the fees for ČT (Czech Television).

The commercial television groups that are members of the Association of Commercial Television (AKTV) are demanding the immediate withdrawal of the draft of the major media amendment. It includes, among other things, a proposal to increase the TV and radio fees for Czech Television (to CZK 160) and Czech Radio (to CZK 55), and a new definition of the payer. AKTV finds the proposal “inadequate, not discussed with the entities concerned and fundamentally undermining the stability of the media sector”.

“We therefore categorically disagree with the proposed amendment and demand that it be withdrawn from the legislative process and thoroughly revised,”

says AKTV President, Klára Brachtlová.

According to its statement, AKTV was not informed of the text of the proposed amendment, nor was it invited to discuss it. AKTV includes the Nova, Prima and Óčko TV groups. The first two have major shares of the TV advertising market.

AKTV also stated that it has been in intensive contact with representatives of the Ministry of Culture this year as a member of the advisory group on the transformation of the State Cinematography Fund and the related amendment to the Audiovisual Act. The announcement by the Ministry of Culture that the intended increase in funding for Czech Television should be seen as a topic related to the transformation of the Fund came as a surprise to AKTV. According to AKTV, during the several months of work of the advisory group, there was not a single mention of any link between this topic and the financing of public media.

“The submitted draft amendment to the Act on Czech Television and Czech Radio and the Act on Radio and Television Fees primarily aims to increase revenues from licence fees by increasing the fees and expanding the number of payers, while the source of Czech Television’s funding from advertising, sponsorship and other commercial communication is maintained in full. In the current economic situation, we consider it to be completely wrong to start dealing with an increase in fee funding without defining and knowing exactly what the increased funds in Czech Television’s budget are needed for and in what amount. We strongly prefer discussing the role of the public service media and the content of the public service as the first step in the process. Only then will it be possible to determine the cost of the public service and set a budget to fulfil the role effectively,” said AKTV President.

AKTV would support an increase in ČT’s budget if the expert discussion shows its necessity. The current draft media amendment would have a destructive effect on the balance of the Czech media environment, media pluralism and, last but not least, would very likely constitute an illegitimate interference in competition, according to AKTV.

Czech Culture Minister Martin Baxa (ODS) said during the publication of the draft amendment that the governing coalition wants to ensure the stability of public service media. He argued that the amount of fees had not changed in 15 or 18 years and that commodity prices had risen by tens of percent in that time. Thus, the Minister said the proposed fee increases would not exceed the rate of inflation over that period.

Source: mediaguru.cz

TELEVISION REMAINS THE MOST POPULAR FORM OF VIDEO IN THE WORLD

The Global TV Group recently released an updated version of its survey of how television is consumed around the world. The figures show that despite the rise of digital alternatives, traditional television remains attractive and attracts viewers with its diverse range of content.

he survey shows that television is still very popular.

Commentary on the survey was provided by Matt Hill, Director of Research and Planning at Thinkbox:

Resilience and popularity: TV remains the world’s favourite video

85% in Brazil, 75% in Austria, 76% in Germany, 69% in Canada, 75% in France…although the video galaxy is ever more complicated, fragmented, and competitive, TV continues to be its major solar system, usually accounting for at least two thirds of video consumption.

This is a remarkable story of resilience (if you’re feeling defensive) or enduring popularity (if you’re feeling positive).

The video world has seen more change in the last decade than the last half century. The explosion of subscription video-on-demand (SVOD), YouTube’s mainstreaming, and TikTok’s turbo-emergence have created a storm that some predicted TV could not weather.

Now those clouds appear to be dispersing and we have a clearer picture. Although we don’t have similar data for countries around the world, the UK experience is unlikely to be radically different from most other countries – and there are two trends in the UK’s video data which are worth noting.

The first is that, in 2022, collective viewing to SVOD like Netflix and Amazon Prime Video services declined for the first time, dropping from 53 mins a day in 2021 to 45 mins in 2022. The impact of unnaturally high TV viewing in 2021’s pandemic-induced lockdown, coupled with a cost-of-living crisis where SVOD subscriptions are under pressure, is likely responsible.
The second trend is that the gradual decline in broadcaster TV viewing in the UK that we have seen in recent years (it was just over 4 hours a day on average per person in 2015 and just over 3 hours a day on 2022) is now slowing and plateauing.

These two things combined suggest that we are entering a period of stability in terms of viewing patterns as the tumultuous recent years in video settle down. Although the TV viewing cake remains roughly the same size, the SVODs have in recent years taken a slice of time away from broadcaster TV. But that impact now appears to have been largely felt – and the broadcasters’ pedigree and expertise ensures they are well placed to thrive in the future on screens across the globe.

Source: theglobaltvgroup.com