Funding Models for Public Service Media

A variety of funding models employed by public service media (PSM) worldwide, are highlighting the challenges and considerations involved in ensuring their financial stability and independence:

• License Fees: This traditional model, exemplified by the BBC and Japan's NHK, involves a fee levied on households or individuals who own television or radio receivers. However, this model is increasingly considered outdated in the digital age, as it struggles to encompass online platforms and streaming services. Many organizations that rely on license fees, like Ireland’s RTÉ, operate mixed models, supplementing the fee with commercial revenue.

• Direct Public Media Tax: This model, gaining traction in countries like Finland and Sweden, involves an income-dependent tax collected alongside income tax, with the proceeds directed to a dedicated fund separate from the state budget. This approach ensures greater financial stability and independence compared to direct government funding, shielding PSM from political interference and budgetary fluctuations. The sources note that this model is seen as future-proof as it is not dependent on ownership of specific devices, and allows PSM to be directly accountable to taxpayers. Denmark’s DR adopted this funding model in 2022.

• Government or Federal Funding: This model, employed by organizations like Radio New Zealand (RNZ) and Estonia’s ERR, involves direct funding from the state budget. While this approach carries risks of government interference, many organizations implement safeguards, such as arm's length funding mechanisms and independent oversight bodies, to protect editorial independence. The sources acknowledge that this model can sometimes lead to the perception of PSM as state media, as seen with China Media Group (CMG).

• External Taxes: Some countries, such as Spain, utilize taxes levied on private broadcasters, telecommunications companies, and other industries to fund PSM. This approach, while providing an independent funding route, can face legal challenges and may not always guarantee consistent financial stability.

• Mixed Models: Many PSMs, recognizing the limitations of relying on a single funding source, employ mixed models that combine different funding mechanisms to ensure greater financial stability and independence. This approach allows organizations to mitigate risks associated with political instability, market fluctuations, or changes in media consumption habits.

The sources highlight the following considerations when evaluating different funding models:

• Independence: The chosen model should guarantee editorial and financial independence from government or political influence. Mechanisms like arm's length funding bodies, multi-year funding arrangements, and clear regulations can help safeguard PSM from undue pressure.

• Financial Stability: The model should provide predictable and sustainable funding to allow PSM to fulfill its public service remit, invest in quality content, and adapt to technological advancements. License fees and direct taxes, especially when income-dependent and separated from the state budget, offer greater financial stability compared to government funding or external taxes.

• Value for Money: The model should ensure that public funds are used efficiently and effectively to deliver high-quality programming and services that meet the needs and interests of diverse audiences.

• Future-Proofing: The model should be adaptable to the rapidly evolving media landscape, encompassing online platforms, streaming services, and changing media consumption habits. License fees, tied to specific devices, are struggling to keep pace with these changes, while direct media taxes and mixed models offer greater flexibility.

• Progressivity and Public Connection: The model should be fair and equitable, ensuring that all citizens contribute to funding PSM while not disproportionately burdening lower-income households. Income-dependent taxes and license fees that offer exemptions or discounts for vulnerable groups can address this concern.

The sources emphasize that the choice of funding model is not a one-size-fits-all solution. It depends on the specific context, including the media landscape, political environment, and cultural attitudes towards PSM in a given country. However, the overall goal remains the same: to establish funding mechanisms that ensure the financial stability and independence of PSM, enabling them to fulfill their vital role in providing quality, diverse, and impartial information to the public.