31 August 2015

Public broadcasting in Germany: PayTV for everyone


If you thought the BBC licence fee was an internationally exceptional anachronism, you are in for a surprise. It is not UK but rather German public broadcasting that is the most expensive in the world. Currently the 23 TV and 63 radio stations have an annual budget of about €8.4 billion at their disposal. Per capita, every single German pays €94 a year, more than any other country except for Norway and Switzerland. Britons pay €70, French €52and New Zealanders just €16.

On top of being expensive the broadcasting fee of 17.50 € per month is also highly unfair. Unlike in the UK, where only those who watch or record TV programmes in real time are liable to pay the licence fee,  in Germany all households have to cough up regardless of whether they own a TV or radio set.  No income or age distinctions are made – everybody pays the same. Viewer figures, on the other hand, vary considerably across age groups: about 50 percent of the viewers are older than 65 years, with only about 5 percent younger than 30. About 60,000 enforcement orders against non-payers are taken out every month. Other than in Britain, fortunately, you will not face criminal charges, but still a foreclosure will be initiated and in the consequence you will find yourself in trouble when renting a flat, taking out a loan or looking for a job.

What is more, German viewers are hardly getting value for money. Public TV stations air talk shows of poor quality, folk music shows, and slushy love films. They spend hundreds of millions on broadcasting rights for sporting events when these could perfectly be provided by private networks. There is a reason why German TV productions – unlike French or British, let alone US productions – are not widely known internationally. They simply cannot compete.

Most of the 23 TV stations have their own advisory boards that are filled with representatives from all kinds of special-interest groups (over 500 in total). Of course, the political parties are represented – but also trade unions, employers’ associations, churches, environmental groups, farmers’ associations, sports groups, and more. Since all possible vested interests benefit from the existing system, there is no organized opposition to it. Individual taxpayers are left out to dry but they have limited ability to make their complaints heard.

While there is widespread animosity towards the existing system among the wider population, no major political party addresses the issue and even the private TV stations and most of the newspapers do not dare to attack the current system. At the same time, technological progress and the internet offer more and more alternatives to traditional television: Sky, Netflix, Amazon Prime and others are increasingly making public broadcasting redundant.  The rationale for public TV and radio is becoming less and less relevant as broadcasting costs fall and barriers to entry are lowered by new technologies.

This is why “Prometheus – Das Freiheitsinstitut,” a new independent classical liberal and pro-market think tank in Germany, has  launched a campaign to remove the compulsory broadcasting fee once and for all  The campaign aims at giving a voice to the growing number of people who do not make use of public broadcasting and cannot see why they are still forced to pay.

A core element of the campaign is a recent paper by the well-known economist Prof. Justus Haucap, who served as head of the powerful German monopoly commission for several years. Prof. Haucap dismisses the notion pushed by TV officials that the broadcasting fee were a “contribution to democracy”. Plurality of opinions and free speech do not by any means depend on the efforts of public broadcasting. Not only can private broadcasting stations provide news and opinions. Above all, the internet offers a broadness of opinions that could never be provided by public broadcasters. Haucap’s paper also shows that in light of these developments no situation of market failure can be observed in the broadcasting market.

Haucap recommends the privatization of the public TV and radio stations in Germany. His reform proposal is influenced by the example of New Zealand, which in 1988 sold its public broadcaster to the private sector Haucap suggests that the privatization proceeds should be deposited into a foundation that would be in charge of buying selected programs of public interest and the required airtime.

For the moment, it looks like public broadcasting will be with us for a while. Politicians have no real incentive to change the system, but rather face many pressures to keep it. But time will probably play into the hands of its opponents, as does the arrogant state of denial of its management and its political patrons.  At any rate, it is worth fighting for the end of a system that is as crony unnecessary and unfair as this one – not only in Germany but also in many other countries.

Clemens Schneider is the Managing Director of Prometheus, a liberal German think tank