PRIVATE MEDIA AT ONE TABLE: THE MAJOR AMENDMENT WILL DAMAGE THE WHOLE MARKET

17. October 2023

WHAT WAS SAID AT THE JOINT PRESS CONFERENCE

• It is not true that the commercial television companies were consulted about the amendment. That would have been the correct process. Moreover, there is a successful precedent - the amendment to the Audiovisual Act.


• The proposed amendment will affect all commercial media. It poses a risk in terms of European law. The absolute lack of specification of what the money should be used for may raise concerns about unauthorised public aid.


• We have heard from Petr Dvořák, former CEO of ČT, for many years that he needs about CZK 300 to 500 million more. However, in a few months, this is an extra CZK 1.5 billion, without specifying what the money will be used for. You cannot write a blank cheque and then wait to see what it is spent on. Now is the time to discuss the role of the public service media.

• It is not true that the increase in fees makes up for the situation where there has been no increase in fees since 2008. Commercial television was hit hard by the economic recession in 2009 when the entire advertising market fell by one-third and it has lasted almost until now while ČT has operated with a generous pre-crisis budget.


• The new definition of a licence fee payer introduces a mobile phone tax. This may be addressed more elegantly through a specific approach to the iVysílání online service, which is also something ČT’s new CEO wants to do.


• There is a real fear of destabilising the entire media market. ČT operates with a relatively significant production budget. Any increase in the budget will restrict production capacity, substantially increasing the prices of all production activities.


• We perceive the preservation of advertising and sponsorship on Czech Television as problematic.

• Czech Radio’s revenues are now double those of the entire private radio market, while the reach of listeners attributable to Czech Radio and the private sector is 27% and 73%, respectively. This shows the economic ratio in the whole radio broadcasting.


• We are not declaring war on public radio. It is more of a fight with a certain arrogance of the Ministry of Culture. A year ago, Minister Baxa stated emphatically that the licence fee would not be increased, and after a year he changed his mind without giving any justification. We have not seen any economic analysis or information on what the money is to be used for. The process should have been the other way around.


• In 2023/2024 it is time for the public service debate to begin in the Czech Republic. The public service media has a role to play in our space, but we need to look again at what role it should play, and we need to see if we can specify what public service is. What resources they are supposed to use, and how many programmes they are supposed to have. There is also the issue of competition. In radio, it is manifested in competition for listeners, we also compete for advertising (in limited quantities), and we are together in the labour market, which we have felt more intensively in recent years. We are in the same job market as the public media. With the estimated increase of CZK 600 million in ČRo’s budget, we have no chance to compete for any job position. Secondarily, we also compete in the marketing and media partnership market.

• In terms of overall market share, our media group is similar to Czech Radio; we have 300 to 400 people, half of whom are salespeople, which ČRo does not have. The discussion about the increase should have been preceded by an audit of the financial management system. We achieve the same share as ČRo with 20% of the staff and 20% of the costs. One has to ask, is the service delivered by ČRo so valuable and different from the service we provide?


• The transposition of the German media law also deals with the financial management of public service media and stipulates that the same thing should not be produced at a much higher cost. This should concern us before the question of fee increases is raised.


• For me, the amendment is a call from the public service media: give us money, we don’t know what for yet, but we want to keep our influence. The media market is changing, mobile phones are not involved by chance, but my children have never tuned into ČT or ČRo on them.

• The amendment also fundamentally affects online, which the ministry probably does not think. Licence fees were originally created to help with the dissemination of a specific programme in a limited environment. However, the online environment is not like that at all. In the free market, we find public service media competing with us not only for listeners or viewers but also for staff and advertising revenue.


• We are concerned that the amendment expands exemptions for online advertising and does not attempt to define what the money will be used for. ČT also produces online content that is not delivered in linear broadcasting but is only used on the internet. Unequal competition deserves professional discussion, it is not a philippic against Czech Television and Czech Radio. We wish to have a confident public service media, but presenting bills in secret does not help.

• None of us can remember a lineup across media types coming together at one table. Numerous reasons for this are common to all of us. None of us want to question the role of the public service media in any way but the amendment on the table has a number of flaws. The role of ČT and ČRo is treated very narrowly in the draft amendment but in fact, it has implications in other sectors. It is not just about linear or terrestrial broadcasting but also about online.


• If we want ČT and ČRo to be good managers, there must be a discussion about what the requirements are for public service media in a given media type. As no requirements have been defined, they cannot be specifically fulfilled. What is the concept that we are going to implement? What are the requirements and concepts?


• The third question is what the public service media will use the funding for. The standard lawmaker should look at the whole market, which has not happened. That is why we want there to be a debate and we want limits to be set and basic obligations to be imposed on the public service media.

• The expansion of ČT and ČRo into online platforms is a potential risk and a big warning for the future. On the internet, both public service media are producing specific programming, competing with us and displacing us. There is a need to define what a public service is and how much it is needed on the internet. Media pluralism must be preserved.