Policy debate

Public broadcasters and innovation: a contested combination in Flanders

Karen Donders
Senior Researcher, IBBT-SMIT (Center for Studies on Media Information and Telecommunication), Vrije Universiteit, and Postdoctoral Fellow, Research Foundation Flanders (FWO), Brussels, Belgium

Heritiana Ranaivoson
Senior Researcher, IBBT-SMIT (Center for Studies on Media Information and Telecommunication), Vrije Universiteit, Brussels, Belgium

Sven Lindmark
Senior Researcher, IBBT-SMIT (Center for Studies on Media Information and Telecommunication), Vrije Universiteit, Brussels, Belgium

Pieter Ballon
Head, Market Innovation and Sector Transitions Unit, IBBT-SMIT, Vrije Universiteit, Brussels, Belgium

PP: 276 - 288

Abstract

For long, Western European governments considered public broadcasters propellers of innovation in the media sector. Pointing at the decline of spectrum scarcity and other technological evolutions, private media companies and some scholars argue that innovation is not a public service task any longer. This article investigates whether government rhetorics and regulatory actions indeed follow these opinions. Is there a shift away from relying on public broadcasters for triggering innovation in the media sector towards innovation programs that depend more on private sector investments? Focus is on Flanders (the Northern part of Belgium) where government has made new agreements with the public broadcaster VRT about its tasks. The article, which is based on a literature study, document analysis and expert interviews, concludes that politicians  in spite of some improvements at the level of overcoming fragmentation, are making few policy choices, leaving things somewhere 'in the middle' as they assign innovation tasks and fragmented budgets to all players in the media market.

Keywords

innovation policy, media innovation, public broadcasting, media policy

Article Text

For long, Western European governments considered public broadcasters to be propellers of innovation in the media sector. For several reasons, public broadcasters were deemed suitable to invest in innovation. They could afford to invest in long-term research tracks, collaborated through the European Broadcasting Union[i] with other public broadcasters, and were aiming at innovations going beyond the implementation of mere market-oriented inventions. What is more, governments, in foreseeing necessary funds, could control public broadcasters' innovation programs, assign specific tasks, enforce particular focal points and require cooperation with private actors as well. This approach was not unique to broadcasting. Also in other sectors, there was a tendency to concentrate innovation efforts within large companies, integrating in a very much centralized way everything that had to do with research and development. The Bell Labs is a notorious example. Essentially, public broadcasters were deeply vertically integrated (covering in most countries content production, aggregation and even distribution) which was a key characteristic of innovation in general in the post WWII era (Chesbrough, 2003: 29).

Gradually, the innovatory role of public broadcasters became criticized. With the entrance of private television in the 1980s, the logic of State intervention was abandoned to the benefit of private initiative. In fact, there was a crisis of State intervention, which was - quoting Garnham (1990: 127-128) "part of a wider political crisis, namely a profound shift in people's attitudes to the State and to the State's proper role in social time". Concepts like market failure and consumer sovereignty inspired policy-makers and narrowed down the room for government interventions. The change of political ideology was soon accompanied with de-regulatory actions and budget cuts with public broadcasters. The latter, part of fierce competitive processes with private companies, were also not always eager to continue their commitment towards innovation as other priorities, as serving 'his majesty, the viewer' (Van Roe, 1999)[ii] were considerably more pressing. Nevertheless, most public broadcasters in practice maintained their investments in innovation - probably because of the rise of innovation policies as key elements of national, regional and supranational information society actions.

Nowadays public broadcasters' role with regard to innovation is under severe pressure. Criticism is more carefully framed within an overall attack on public broadcasters' role in new media. Opponents of public service broadcasting will in theory agree with a technology neutral vision, allowing public broadcasters to be active on all platforms provided they offer public service content. In practice, however, they are very critical of public broadcasters becoming active on the Internet, mobile platforms and the like (Biggam, 2009; ACT et al, 2004). A pro-active role of public broadcasters in new media markets is allegedly not justified in the absence of market failure on new platforms (Armstrong and Weeds, 2007). Private media companies extend this rationale to innovation in general, arguing that developments in new media should be triggered by private actors on the basis of actual consumer needs. In addition, they maintain that innovation requires flexibility and adaptiveness - criteria public broadcasters (which are often characterized by high numbers of employees and bureaucratic structures) are said not to comply with (e.g., Interview, 24 January 2011; Interview, 8 February 2011).

Private sector criticism has fueled government debates on the innovation tasks of public broadcasters in most Western European countries (Donders, 2012). This article investigates whether government rhetorics and regulatory actions indeed follow suit. Is there a shift away from relying on public broadcasters for triggering innovation in the media sector towards innovation programs that depend more on private sector investments? Research centers on Flanders (the Northern part of Belgium) where discussions on the renewal of the management contract of Flemish public broadcaster VRT (Vlaamse Radio- en Televisieomroep) were finalized in July 2011. The management contract is renewed every five years and contains the most important agreements on the funding and tasks of the VRT. Both the discussions about the new contract and the text of the contract itself provide data on which the analysis rests. In addition, the article is based on over 30 expert interviews conducted with representatives of the public broadcaster, private broadcasters, publishers, universities, public institutions that support innovation, etc. in 2010 and 2011.[iii] Interviews were conducted face-to-face by two interviewers, took one to two hours and were semi-structured. They addressed issues related to the experiences in collaborating with the public broadcaster on innovation, the appreciation of 'success' in achieving innovation and ideas about the most desirable form of support for innovation in the media sector. Data were analyzed four researchers (including the two interviewers and two researchers involved with the document analysis). The interviews made up a stakeholder consultation, used by the Flemish government to re-think its policies in the area. In that sense, the Flemish data set (consisting of new legal acts, various policy documents, press coverage and a formal registration of stakeholders' opinions) was very comprehensive and presented a unique opportunity for an in-depth analysis of this issue which of relevance for regions and countries throughout Europe. Indeed, whereas earlier research in the 1990s convincingly illustrates the role of public broadcasters in national and European innovation programs (e.g. Collins, 1998: 157), current research is much more silent on this topic or merely addresses related topics like, e.g., competition between public broadcasters and private media companies in new media markets (Moe, 2008b; Donders, 2012). This article aims to fil this gap. 

The article consists of five parts. Firstly, the opinions of various stakeholders about the innovation role of the public broadcasters are identified and analyzed against the background of Martin's definition of innovation as a phased process (Martin, 2009). Secondly, a brief explanation on European State aid rules that determine government funding behaviour in the area of innovation to a large extent, is provided. Thirdly, government rhetorics are addressed. Fourthly, the new management contract and the ways in which it deals with innovation are assessed. Finally, some conclusions and recommendations for future policy are outlined. Most importantly, the article aims to illustrate how government authorities in Flanders have indeed opted to decrease the innovation role of the VRT. However, they have not chosen for an exclusive reliance on private sector initiative either. Instead, they have left things in the middle, pushing for cooperation between the public broadcaster and private media companies. Such an approach has advantages (e.g., innovation on a larger scale, concentration of financial means) as well as disadvantages (e.g., less vision, more close-to-market innovations instead of disruptive innovation). Research findings, even though derived from a small political-geographic unit of analysis are relevant in light of European-wide discussions on the role of public broadcasting as the same set of arguments for and against a reliance on public broadcasting innovation programs can be found in other countries as well. Reference can, for example, be made to project Canvas in the United Kingdom. Canvas is a huge innovation scheme designed by the BBC and partners like ITV, Channel 4 and Five to develop a set top box that will enable viewers to access HD, on-demand content from online applications like iPlayer on their television sets (Debrett, 2010: 50). It has been fiercely criticized mainly for being market distortive. The UK government has for that reason asked the BBC to open up the project to pay-television operators as well. After widening the number of companies involved in the Canvas project it has still not reached the phase of implementation. Canvas illustrates, in line with the Flemish example, that government investments in innovation are as such not sufficient to trigger innovation. They need to be accompanied by genuine support, a scheme to overcome problems of market distortion and a commitment to innovation as a process of creativity and entrepreneurship of a selection of companies that seek to advance their products of business processes. 'The more the merrier' does not apply to innovation.

[i] The European Broadcasting Union is an interest group representing European public broadcasters. It is, among others, involved in the joint acquisition of rights (to, for example, big sports events) and operates a huge technical innovation lab in Geneva.

[ii] Van Roe, former Director General of Flemish public broadcaster VRT, referred to the more audience-oriented strategies of public broadcasters as strategies pleasing above all 'his majesty, the viewer'. In other words, at a certain point public broadcasters adopted strategies that were very much concerned with individual consumer needs.

[iii] A first set of interviews was conducted between January and March 2010. These interviews were part of a stakeholder consultation in which respondents were asked after their opinion about various facets of public service broadcasting. New media and innovation was but one of these aspects, but received a lot of attention, certainly in interviews with private media companies. The second set of interviews was conducted between February and April 2011 and focused specifically on the role of public broadcaster VRT in the area of innovation. The study was closely followed-up by the cabinet of media and acted as input for policy development.

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