Public broadcasters learn a new word: austerity

Michael Hedges June 24, 2009 Follow on Twitter

Governments expect public broadcasters to do everything possible, and then some. When the money flows, everybody grows. When it slows, it’s time to go.

Swiss public broadcasting (SSR-SRG) Board President Jean-Bernard Münch and General Director Armin Walpen met with the press gaggle (June 23) to spell out the word of the day: austerity. Without “federal contributions, higher fees or enhanced commercial revenues,” said Walpen, times for SSR-SRG will be very tough. Projected debt by 2014 would be CHF 780 million (about €500 million), more than double the statuary limit.

Immediate debt reducing measures include a salary and wage freeze on all workers in 2010. Certain real estate not essential to radio and TV operations will be put on the block. News service Swissinfo will be “examined” as will the Swiss Italian Radio (RSI) orchestra.

Without more revenue about 100 jobs could be lost in the termination of two radio services in the Swiss German region and one in the Swiss Italian region. Other, more painful reductions have been mentioned, including pulling out of Euronews and TV5 Monde.

The SSR-SRG is funded by the standard radio and TV license fee, advertising on television and small change from ancillary businesses. When the Swiss Federal Council approved a new Law on Radio and TV (LRTV) in 2006 SSR-SRG was forced to divest most of its side-ventures. The license fee is – more or less – fixed for the foreseeable future. More money from advertising – more ad breaks and ending the current restriction on online advertising – is highly contentious; powerful Swiss publishers vowing a major fight.

On the cost side, SSR-SRG produces a lot. Each of the three main linguistic zones – German, French and Italian – get at least two television channels and three radio channels. Current law requires all of the SSR-SRG channels be made available in all of the linguistic zones. That’s a lot of frequencies, towers, transmitters, electricity, engineers…you get the picture. And, too, SSR-SRG has a sizeable investment in DAB radio channels and a multiplex. Reducing services requires permission from the Federal Council.

And it is to the Federal Council that Münch and Walpen are appealing. Unfortunately, they’ve been to that well before. When provisions in the 2006 LRTV threatened SSR-SRG revenues Walpen played the sports card, threatening to give up a few favorite sports broadcasts.

Dismal economics is playing havoc with all media operators. Public sector broadcasters, thought to be immune from commercial economic cycles with guaranteed tax income, are finding revenues not keeping up with the demand for mandated public services. Aging populations and lower household formation yield declining license fee revenues. Forcing retirees and fixed income households to pay the license fee, even without increases, is politically difficult.

Those public broadcasters operating with mixed models, augmented by advertising or direct State funding, seem particularly vulnerable. Irish public broadcaster RTE benefited from the boom times bringing in 50% of its revenue from advertising. With the bust upon them services are being cut. Latvia’s government is toying with the idea of selling one or more radio channels.

Walpen took advantage of the press gaggle in Bern to make public his retirement. He will step down as General Director at the end of 2010. His 13 year tenure started with expansiveness and ends in retreat. His deputy, Daniel Eckmann, will also leave SSR-SRG “for personal reasons” at the end of January 2011.

Next month Switzerland celebrates, if that's the right word, the 500th anniversary of John 'no singing, no dancing' Calvin's birth.