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Public Service Broadcasting Financial and Administrative Issues

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Public Service Broadcasting

Financial and Administrative Issues

Sucharita Eashwar

What is public service broadcasting?

Public Service Broadcasting is a service that provides radio and television programmes for the public and is financed by the public. “Public” defines the entire population of the country or region which the public broadcaster is responsible for serving and covering all sections and interest groups of the population. The target is to achieve universal coverage – every household in the country or region should have access to the programmes and each section of the population must be catered to with programming relevant to their interests and concerns.

The Public Service Broadcaster (PSB) is distinct from a state broadcaster. A state broadcasting service is one which is owned and operated by the state and which is subservient to the relevant Ministry e.g. the Ministry of Information and Broadcasting. Therefore, the state broadcaster is often seen as the mouthpiece of the ruling government, rather than as a broadcaster who caters to and is answerable to the public i.e. the audience.

The defining characteristics of a PSB are :

  1. independence – financial and editorial

  1. accountability to the audience and not to the state

Administrative structure for PSB

A PSB is an autonomous organisation

  • set up by legal provision

  • subject to a separate regulatory authority

  • accountable to Parliament

Example: Prasar Bharati in India

Pre-requisites for an effective PSB

  • clear vision and strategy

  • strong leadership and good corporate governance

  • professionally equipped and motivated employees

Options for PSB Financing

Financial autonomy is a key indicator of a true PSB.

Sources of revenue available to the PSB

  • licence fees and levies

  • taxes and government grants

  • commercial revenues: sponsorship, advertising, etc

1. The receiver Licence Fee is acknowledged to be the ideal source of revenue. The advantages are :

  1. it is not dependent on taxes levied and granted by government which may vary from year to year and be vulnerable to government control

  2. it is not sourced from the private sector which could again lead to influence and abuse by the corporate sector

  3. it establishes a direct link between the revenue payer, who is also the audience, and the PSB; this is important in getting the involvement and support of citizens for PSB.

At the same there are some problems at the implementation level, especially in developing countries :

  1. collection is cumbersome and expensive

  2. capacity to pay is an issue in developing countries, where a big percentage of audiences are below the poverty line

  3. With digital technology and convergence, broadcast programmes can be accessed through new media like mobile phones and Palmtops. It is difficult to track and collect fees from such users.

India has experimented with an annual licence fee and had to discontinue it, finding it unwieldy and expensive to collect. Presently, we have a one-time levy collected at the point of sale of TV and radio receivers. However, with saturation levels being reached with sales of these products, revenues can be expected to decline in the future.

Perhaps we can explore innovative ways of collecting fees from citizens e.g. piggybacking the levy to the electricity bill?

^ 2. Taxes and Government Grants

This is the most common source of revenue for most PSBs. However, as we all know, total dependence on this often leads to undue control and interference by the government in the administration and programming of PSBs, particularly in pressure to project and promote the “government of the day”.

Some of the European Union nations have met this challenge by creating separate and autonomous structures for financial planning/control and administration of PSB institutions. For example, the German Broadcasting Law expressly forbids the government’s involvement in the running and programme decisions of PSBs. The grant is voted by the elected body and the government has no control over the allocation and expenditure.

In India the PSB is the Prasar Bharati Corporation, set up by an Act of Parliament, which runs the public television and radio networks. Prasar Bharati is accountable directly to Parliament.

^ 3. Commercial Revenues

Commercial revenues are the third major source of financing. PSBs are increasingly being forced to raise revenues from the market, in different ways; for example :

* Advertising – selling airtime for commercial breaks

* Pay-per-view/pay channels

* Leasing – of hardware, frequency spectrum, facilities

* Marketing rights

The Australian Broadcasting Corporation has been doing some very innovative marketing and merchandising to raise revenues e.g. the ABC stores which sell consumer items branded with popular characters from their radio programmes.

Only a few countries are funded almost purely by licence fees (Japan, BBC in UK, Norway, Sweden and Denmark) or almost purely by government grants (Canada, China). The USA follows an almost purely commercial broadcasting system with a state-funded public service channel which has limited resources and reach. Exclusive dependence on either grants or commercial revenues leads to danger of being controlled by either the government or the advertiser.

^ What is a workable solution?

The majority of PSBs have traditionally been owned, operated and financed by the state. While that is still the dominant model in Asia, the economic pressures resulting from globalisation and liberalisation are forcing governments and broadcasters to look to the market to raise funding for public service broadcasting. We are seeing a rapid trend towards commercialization and privatization of the hitherto state-run and state-funded PSBs – an about-turn from one extreme to the other. In the near future, it is inevitable that PSBs would have to raise at least a part of their revenues from the market in order to survive.

While many PSBs are worried about how to survive in the highly competitive scenario that is emerging in the globalising economy, this can also be taken as an opportunity to put in place a revenue model for PSBs to ensure that they retain their public service mission and the independence to carry out their mission while, at the same time, be responsive to audience preferences, creative in programme content and presentation and cost-effective in operation.

Consequently, most countries today are working out revenue models that combine all these three sources - licence fee or levy, government grants, and commercial income – in different permutations, depending on each country’s priorities. We can examine the BBC model, the South African model, the European examples and the experience of India, learn from their successes and failures, then mix and match to create a good model for Kazakstan and the other Central Asian republics.

Challenges before PSBs today

1.Fulfil public interest obligations


2. Be independent


3. Have financial autonomy

This is the tough challenge that most PSBs are facing the world over.

A pragmatic solution which provides legislation for an independent organisation and strikes a balance between all three types of revenue would ensure the checks and balances that are necessary for the PSB to fulfil its obligations. What is important to recognise is that there no one perfect formula for the financial and administrative structure for a PSB. Each country’s own solution will depend on its economic, political and cultural agenda and the awareness and collective power of its civil society groups to influence that national agenda.

Ms Sucharita Eashwar is a communication professional with more than 20 years’ experience spanning both the corporate and development sectors, particularly in planning media and communication projects and training.

Almaty 3-4 Feb, 2003


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