OCTOBER 2023

Joint statement by the Association of Commercial Television, the Association of Private Broadcasters, the Internet Development Association, the Union of Publishers, and the Association of Online Publishers

Media market appeals to the Minister of Culture: a discussion on the definition of public service is necessary before making any change in the funding of public service media

Media associations representing the most important media houses, television and radio broadcasters, online and press publishers have united forces in a joint appeal to Culture Minister Martin Baxa. He introduced the “major media amendment” regulating the financing of the public media, Česká televize (Czech Television) and Český rozhlas (Czech Radio). However, during the preparation of the draft, there was no discussion about the potential impact on the media market as a whole.

The planned changes have not been consulted with media representatives in any way, nor have any of the documents that the Ministry of Culture has put into the legislative process addressed the impact on the commercial market. We consider this to be a fundamental error. Public service media do not operate separately and apart from commercial entities but are part of the same ecosystem. It is therefore necessary to assess any possible intervention from the point of view of all the entities that are part of the media sector and contribute to maintaining media pluralism in the Czech Republic.

The proposal of the Ministry of Culture has also been much criticised by ministries and other institutions. The amendment is considered to be ill-conceived and does not fully reflect the current situation. In a situation where the state, companies and citizens of the Czech Republic are facing high inflation and are forced to adopt many austerity measures, Czech Television (ČT) and Czech Radio (ČRo) seem to be the only ones who do not have to save money and strive to operate more efficiently.

The argument that this will only make up the fair value of the budgets of ČT and ČRo for the period when the licence fee was not increased is not justified. The commercial media have been fundamentally affected by the economic crisis and the one-third drop in the advertising market in 2009 or the recent coronavirus crisis, while the public media have managed a stable budget throughout the whole period.

In our opinion, such a significant change in the financing of public service media should be preceded primarily by an expert discussion, which will open up the question of the form and scope of public service in the 21st century, and which will then reveal what budget public service media really need to fulfil their role. The procedure chosen by the Minister of Culture reverses this process and, on the contrary, writes a blank cheque for a service that nobody can define at the moment and that nobody can evaluate and control in the future.

We are therefore once again asking Culture Minister Martin Baxa to completely revise the draft of the major media amendment in the light of the wave of justified criticism the draft has provoked.

 “The proposed amendment will fundamentally disrupt the commercial media market on several levels. For TV broadcasters, for example, there is a risk of depleting production capacity and making original content more expensive,” says Daniel Grunt, CEO of Nova Group.

“Czech Television has repeatedly said that it lacks CZK 300 to 500 million a year in its budget to maintain its current functioning. However, the proposal adds up to CZK 1.5 billion irrespective of the fact that there is still a question whether the current scope of ČT’s services continues to meet the definition of a public service,” adds Marek Singer, CEO of FTV Prima.

“The entire commercial radio market operates with half the budget of Czech Radio. Yet we operate twice as many radio stations and reach three times more audience than public radio. Increasing licence fees and introducing an across-the-board ‘mobile phone tax’ or unjustified fees for legal entities as proposed in the amendment by the Ministry of Culture is therefore out of place in our opinion. It rather seems that the Ministry of Culture has failed to take a comprehensive consideration of the proposal and has primarily tried to find as much money as possible, regardless of what it will be used for,” says Jiří Hrabák, Chairman of the Association of Private Broadcasters (APSV) and CEO of Rádio Impuls.

“The additional hundreds of millions of crowns for Czech Radio, while retaining advertising, will seriously shift the balance on the radio market and dramatically affect competition. In terms of the composition of their broadcasts and music, what Czech Radio stations offer licence fee payers for their money is content that is in fact no different from private stations for most of the day, and that private stations have to produce at a fraction of the cost of ČRo,” warns Daniel Sedláček, Chairman of the Board of Directors of Media Bohemia. “This amendment will only strengthen Czech Radio’s dominant position in terms of finance in direct competition with private operators for the same listeners without improving the public service in any way,” Sedláček adds.

“The public media have already been online competitors to our news projects. We are competing in the same field not only for readers but also for employees or advertising revenue. Increasing the budgets of ČT and ČRo without resolving the relationship between public and private media has unquestionable and significant consequences for economic competition. The submitted proposal does not specify for what purposes the increased funds are to be used, and furthermore, it extends the exemptions from the placement of online advertising,” said Michal Hanák, Chairman of the Executive Board of the Internet Development Association (SPIR) and Vice-Chairman of the Board of Directors of MAFRA.

“We are in a situation where a number of activities are moving online but where neither the limits nor the specific objectives of the public service are clear for public service media. At the same time, the implications for the online environment have not been assessed. It should go without saying that public service institutions do not seek to compete with commercial entities in the online market. Public service media should focus on fulfilling their public service mission and present concepts of how they want to achieve it,” adds Libuše Šmuclerová, Chairwoman of the Board of Directors of the Union of Publishers (UV) and Chairwoman of the Board of Directors of the Czech News Center.

“Our organisation represents smaller and medium-sized publishers operating mainly on the internet. We are very concerned about the expansion of public media into new platforms in the online space. Beyond that, public service media on new internet platforms are not just distributing content that originally appeared on TV or radio airwaves but are adding new content. Given that the new European Media Freedom Act, the final wording of which is expected to be approved in the coming months, will, among other things, establish a new right of citizens to pluralistic and independent news, it will be the duty of Member States to create the conditions for a pluralistic media market. To preserve plurality, it is essential that fair conditions of competition are set, especially in the online environment,” concludes Ondřej Neumann, Vice-Chairman of the Board of Directors of the Association of Online Publishers (AOV) and founder of HlídacíPes.org.