EFFECTS OF EUROPEAN UNION LIBERAL MARKET POLICIES ON

EUROPEAN BROADCASTING MEDIA SYSTEMS

By Austen Uche UwosomahAn Essay Paper on Feb – March 2008 Course:

Transformations in European Media, Journalism & GovernanceUniversity of Amsterdam, Netherlands

Introduction:

The debunking of autocratic regimes in occident nations of the West and the successive globalization of

democratic governance seem to have harness unprecedented spread of political liberalization in Europe.

European media systems (EMS) have thus become more favored with liberation from overt political control

and subsequently become favored with participation of governing socio-political actors as market, state and

civil societies. In recent times, market has largely become a dominant governing factor. The reason for this

may be attributed to the suggestions from Cuilenburg and McQuail (2003) that the media is making a policy

paradigm shift from their component values of ‘public interest to economic welfare’ (see Rolland 2008).

The foregoing implies that contemporary media practice is governed by inputs of liberal policies that favor

economic derivations than those of public interest priorities (where “public interest” refers to media social

and professional functions). Europe’s media industry particularly broadcasting media was deregulated

accordingly via European Union's Television Without Frontiers (TWF) Directives. This deregulation among

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TABLE OF CONTENT

Introduction

European Media and Liberal Policies

Liberal Policies in the National Broadcasting Domains

Development of Liberal Market Policies in European Broadcasting Media:

The EU Single Market Regulatory Competition Policy

Effects of Liberal Market Policies on European Broadcasting Media

Journalistic Performance of European Broadcasting Media

Conclusion

Bibliography:

other things created a common European market for broadcast signals to easily cross borders. This allowed

broadcasting companies to take advantage of more favorable regulatory environments and profit from target

markets. TWF’s deregulation facilitated a framework for transnational broadcasting to be liberated from

regulatory authorities of the recipient country. This made cross border broadcasting well-suited for market-

driven competition and ensured a perfect competitive market for the industry. As corollary, there has been

adoption of varying liberal market policies at national levels to commemorate with the present market-

driven objective of European audiovisual industry. Does this have any consequence on the overall

productions and journalistic performance of European broadcasting media? If it does, what are the effects of

such consequences? This paper seeks to answer those questions. That, being achieved, I will conclude with

offer of a tentative suggestion on how the situation can be improved.

European Media and Liberal Policies:

European media landscape is undergoing rapid changes. There is a new climate for media freedom,

openness and opportunities throughout the region. This, to a large extent, is due to the deregulation of the

media sector. Liberalities such as ejection of state censorship, constitutional guarantee of media freedom of

expression and appropriation, promotion of perfect competition market, development of independent

professional journalistic standards and emergence of active media literate civil societies have become

apparent in the European media landscape. The interplay of these liberal variables has induced European

media practices towards harmonious regional conduct but not at national levels. Within the past decades,

there has been further deregulation and “re-regulation” of media policies by policy makers at national and

regional levels to harness push toward the realities brought by the liberalized market now inherent in the

European media sector.

The push toward the foregoing occurred due to the influx of cumulative factors such as technology,

liberalization and commercialization. Of the trio, technological dynamism played the prior enabling role.

The availability and supply of new digital technologies in the electronic media of cable and satellite (radio

and TV) and the Internet catapulted transmission of programs and advertisements over nationally regulated

broadcasting spectrums thereby putting increased strain on policy makers to deregulate media policy to

permit media liberalization (Dyson et al, 1988, cited in Hardy 2008:59). Thus, the challenge brought about

by the electronic communication technologies impacted deregulatory measures from both national and

supranational political quarters to liberalize European media productions and structures.

Initially, not all political hegemonies in Europe were willing at national levels to liberalize their media

policies. This is because European states differ in political typology and the media system was determined

by this factor. All of Europe, including Eastern, Northern, Southern and Western Europe, have segmented

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typologies in their political and media models. To explain European political and media systems, pertinent

to recall Hallin and Mancini's three model comparison of media and political system. Hallin and Mancini

identify three different media systems peculiar to Northern, Western and Southern Europe: ‘the

North/Central European or democratic corporatist model; the Mediterranean or polarized pluralist model and

the North Atlantic or liberal model. The North/Central, democratic corporatist media system is the dominant

one in the Scandinavian states, the Low Countries and German-speaking Europe (i.e. Germany, Austria and

Switzerland). Portugal, Spain, Italy, Greece and France belong to the Mediterranean or polarized pluralist

media system, and the North-Atlantic, liberal system holds sway in UK and Ireland’ (Hallin and Mancini

2004: 90).

However, Hallin and Mancini's explanation does not include Eastern European states models. Describing the

model of Eastern European media systems, Örnebring (2007) with support from (Aumente, 1999; Gross,

1996; Malovic and Selnow, 2001; Splichal, 1994; Vihalemm, 2002) avers that an appropriate way to

describe the Eastern Europe’s media systems is “transition”. That is transition from an authoritarian,

Communist to democratic (capitalist) open, liberal, free-market media system (Örnebring 2007). Örnebring

means that Eastern European states are the least to embark on successive transition from (communist)

authoritarianism to (capitalist) democracy. As a result, their democracy is not yet consolidated enough

(though they can no longer be described as communist/authoritarianism) to make them well defined liberal

media models that could fit aptly into Hallin and Mancini's comparative models.

Liberal Policies in the National Broadcasting Domains:

Deregulation of media industries at national levels was prompted by advancements in media technologies

coupled with the EU’s Directives of the late 1980s. Later, market liberalization resulted apparently due to

the establishment of commercial stations and privatization/enterprising of public broadcast companies. Due

to enormous financial outlay required to upgrade to new technologies available for broadcasting, media

companies engaged in mergers and acquisitions to amass the necessary resources for consolidation and

national governments aided the mergers by relaxing media ownership rules. Further, in an attempt to

improve their market positions, media companies combined merger and acquisition strategies with those of

internationalization and diversification by eventually liberalizing the laws restricting cross media ownership

(Harcourt 2005).

The deregulation of media ownership led media companies to expanding into adjacent broadcasting markets.

The volume of media merger decisions became overly, consequently, a debate about legislating specifically

for media ownership emerged within the European Commission (EC). Harcourt (2005) affirms that EC’s

‘position has ranged from the harmonization of national media ownership laws (designed to protect

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pluralism and public interests from multi-media concentration) to the encouragement of a natural emergence

of a competitive European media market’. The rational for this liberalization from the EC’s stance is to push

national political authorities towards complete homogenized deregulation of media markets at the various

levels under an initiative on convergence (Humphreys, 2007; Harcourt 2005). The EC's inordinate quest to

harmonize deregulations at national levels was to provide a consolidated liberal market to project Europe as

culturist despite its diversity and pluralist nature. So far, ‘liberalization, re-regulation and deregulation have

been employed by states at national levels. Countries like Germany, Luxembourg, Italy, France, Spain,

Denmark, Sweden, the UK, and Netherlands among others have the majority of media policy dynamics

since the late 1980s. The EU's Single European Act of 1986 contained modules that influenced the fore

liberalization and deregulation of national broadcast media policies.

The 1986 Single European Act, contained format for the introduction of private operators in terrestrial,

cable, satellite television and radio broadcasting. National regulatory measures accompanying liberalization

particularly those in European countries with the largest liberalized markets as the UK, France, Netherlands

and Germany, attempted to restrict media ownership in the interests of retaining pluralism (Harcourt 2005)

but their regulatory efforts were truncated by calls for further liberalization due to technological

advancements, lobbying from domestic media operators, transnational activities of national media operators

and initiatives by the EC (Harcourt 2005). After 1989, following EU’s TWF directive, and the revised TWF

in 1997, national media policies were liberalized to favor subsequent consolidation of ownership of national

mono-media to European multimedia sectors. This harnessed horizontal and vertical concentration across

media sectors as well as cross media ownership. According to Harcourt (2007), ‘the present-day map of the

national media markets … shows high levels of concentration in mono-media sectors and increasing

concentration in cross-media ownership’.

Development of Liberal Market Policies in European Broadcasting Media:

Before late 1980s in European, audiovisual media regulatory policies for media markets were subject to the

domain of the states. In many states, public service broadcasters held national monopolies. Later, with the

emergence of private markets, spectrum scarcity restricted the market to a small number of broadcasters

which were strictly regulated by the state. By then, regulatory procedures were similar in most European

states based on principles discussed and established within the EU Council. Regulatory instructions such as

rules on advertising, content and the protection of minors were designed to protect the public interest. The

regulation of television was seen to aid the functioning of a democratic system through the guarantee of a `

plurality of voices' (Harcourt 2005). European states (with exception of Luxemburg that never had public

service broadcasting) shared common models of dual system of public and private broadcasting. Though

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there existed clear differences between European regulations on general media practice, their overlay

commonality however, is that they stressed the provision for public service broadcasting (PSB).

The main ‘rationale for the maintenance of PSBs was meant to contribute to the quality of public discourse,

promote societal integration, and emphasize news and education, as opposed to entertainment’ (Voltmer

2000) and advertisements purveying of commercial media. The first real disordering of the monopolies of

the state to maintain media deregulation to desired pace was the ability of digital technologies as satellite

and cable radios/TVs to penetrate from abroad putting an end to states’ political control on spectrum

regulation. This set the dawn for possible competitive market for existing private and public broadcasters

within the states. In the light of this, it was seen as an opportunity by the European Commission of EU to

break in and create a genuine level playing ground by issuing the Directive to facilitate cross-border

broadcasting (Harcourt, 2005, 2007; Humphreys, 2007; Corner, 2004; Ward, 2006).

The EU initiated a number of media regulations to order media productions within Europe. The most

updated policy of EU is the Audiovisual Directive (AVD) 2007. The Directive was amended from the earlier

TWF Directives of 1989 and 1997 (Biltereyst and Pauwels 2007:27). The AVD (2007) focus not only

creates and gives room for healthy economic coexistence with regards to competition between European

media industries, taking into account ‘the impact of structural change, the spread of information and

communication technologies (ICT) and technological developments on business models, especially the

financing of commercial broadcasting, and to ensure optimal conditions of competitiveness and legal

certainty for Europe’s information technologies and its media industries and services, as well as respect for

cultural and linguistic diversity (AVD 2007). Specifically, ADV (2007) reiterates the former and latter

TWF (1989 and 1997) directives which lay down modalities and rules on broadcast content vis-à-vis airtime

duration for news, documentary and advertising; the promotion of European and national content; protection

of minors; non projection of hate speech and anti racial programming, among others. However, so far, EU

directives regulating media practice have concentrated on broadcasting more than the press. Regulations for

press seem to be left more to national authorities.

The AVD (2007) reiterates EU’s moral suasion hold over member states’ to comply with the directive while

also leaving lacuna to national sovereignty in their method of application. This has inordinately open

grounds for states to become actively involved in shaping national media policy to gain domestic

comparative economic advantages. It is now evident that various states in Europe adopt different media

policies within the context of EU directive to suit national political and economic priorities. However, as

economic liberalization is associated with commerce, both the rationale for state regulations and the

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productions of media actors are moving towards more a capitalist business or commercial models. Thus, the

market is becoming a dominant element in the media governance factors.

The EU Single Market Regulatory Competition Policy:

The European Union (EU) revised TWF Directive (1997) in concrete terms created the preconditions for

single market regulatory competition between EU member states. It created an internal market and lay down

competition modalities for states to deregulate accordingly. Member states initially resisted deregulating.

But as deregulation and regulatory competition were core objective of the EU, they were compelled to

deregulate following a series of European Court of Justice Decisions (ECJ) which reinforced compliance

pressures on domestic legislations. The dismantling of national restrictions was sustained through the ECJ

rulings in the 1990s and 2000s which reinforced the TWF principle that broadcasting be governed by the

laws stemming from the state of transmission and not the state of reception (Harcourt 2007). Thus, national

deregulation was not a natural response to the preference of state or media actors, but governed by the EU

institutions (Harcourt 2007).

The European institutions particularly the European Commission (EC), made active contributions to

accordingly use regulatory competition instance to promote “regulatory arbitrage” for the broadcast markets.

Those who redrafted TWF of 1997 saw deregulation as leading to the establishment of a level playing field,

increased competitiveness, and the consolidation of broadcast markets (Booz-Allen and Hamilton 1992;

Sanchez-Tabernero 1993; Vittet-Philip 1996, cited in Harcourt 2007). Following economic logic, the TWF

Directive (1997) followed two theoretical suppositions of the ‘race-to-the-bottom’ (Cary 1974) or ‘race-to-

the-top' (Vogel (1995) assumptions. These theories assume that governments will engage in regulatory

competition when capital is mobile and economic actors are able to engage in regulatory arbitrage (where

regulatory arbitrage implies that companies can choose to relocate to a country with the most favorable

regulatory environment away from its home jurisdiction). Then competition will lead states to either relax

regulatory standards resulting in a `race-to-the-bottom' or increase them commencing in a `race-to-the-top'

(Harcourt, 2007).

The glaring consequence as Vogel (1995) argues is that single market integration ‘can lead to the

strengthening of state product standards due to domestic industry pressure for protection’. In this case, states

can crave domestic economic bonus and maximize economically from regulatory competition. On the other

hand, Cary (1974) and Romano (2005) rather argue that regulatory competition between companies aid

market efficiency. They view competition as emerging naturally as a result of capital mobility in an

integrated market. In this way, regulatory competition is seen to be a natural process driven by market actors

who take advantage of the liberal conditions of the market. Perhaps this is why market liberalization at the

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national level has resulted in the appearance of numerous new commercial broadcasting operators. And in an

attempt to improve their market positions, the media companies combine merger and acquisition strategies

with those of internationalization and diversification accordingly as the domestic market has now become a

European one (Humphreys 2007). The main players in the media sector now operate at the European level

and define their media policies to take advantage of the integrated market conditions. Suffice to say

therefore, that regulatory competition which is a format of the EU and a consequence of the actions of state-

led deregulations led media companies into regulatory arbitrage preferences.

Effects of Liberal Market Policies on European Broadcasting Media:

Political and economic factors are two underlying stats that have consistently effected changes in media

systems across Europe. This is evident from how transformations have occurred over the years due to liberal

political deregulation of the media sector. Hardy (2008:57) remarks that the most significant harbinger of

liberal political deregulation in European media, not undermining technology are economic benefits and

political concerns. The economic benefits are in terms of commercialism and profit maximization incentive

and political concerns are in term of ‘protection of culture diversity and respect for nationalistic values’

(Örnebring 2007). For instance, the abolition of the public service broadcasting monopolies and the

expansion of commercial television to become an integral and dominant part of national media systems and

the commercialization of the activities of public and private audiovisual media was empowered by the

enabling environment created by deregulation, a consequence of liberalization, and which led to

privatization and further led to a frenzied national and transnational media competition and marketization

across European media systems.

The softening of media policy by several national governments to allow private ownership in broadcasting,

the sale of public communication asset to private investors, the deregulation of PSBs ownership from

statutory corporations to public enterprises and subsequent commercializing of PSBs allowed these media

outlets act more liberally with regards to content formation and dissemination initiated the business

incentive objective for the media in most European countries. This allowed rapid influx of commercial

programming in the content and brought rapid diversification of business activities into the media industry

paving way for the intervention of market forces and competition among media operatives.

The adoption of liberal market policies which was initiated by EU directives has had two consequential

behaviors on the State authorities and on the media operatives. Firstly, it made the State authorities to

deregulate their media policies in general with EU’s directives but in particular to their economic

comparative advantages. For instance states had deregulated in consonance wit EU’s regulatory competition

law to take advantage of the economic benefits as with UK and Luxemburg. Secondly, it acted as catalyst

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for the media industries to engage in roughneck competition. That is ‘competition for audience between a

substantial numbers of channels; direct inter-channel competition for advertising; aggressive competitive

programming; progressive competition in airtime duration and audience patronage (Tunstall and Palmer,

1991, cited in Hardy 2008: 58).

Noticeably, there is emergence of concentration on advertisement content by the communication/media

sectors and multimedia conglomerates (Weymouth and Lamizet, 1996, cited in Hardy 2008: 58). The influx

of increased advertising programming in European among all media firms is evident from the way media

companies sited and relocated stations to find possible locations where they could bypass national

regulations that restricted activities of transnational broadcasting. For instance, several companies sited

stations in Luxemburg and UK because of the countries’ liberal policy for satellite broadcasters.

Luxembourg Media Law allowed companies based in Luxembourg to broadcast abroad with very few

restrictions. This policy sparked regulatory arbitrage in favor of the 1989 TWF Directive Consequently,

large national players in France (Canalsatellite), Germany (DF1), the Netherlands (NetHold), Spain

(Sogecable) and the UK (BSkyB) chose to launch satellite platforms from Luxembourg (Harcourt 2007).

CLT, a Luxembourg satellite broadcaster hosts a lot of foreign broadcasters’’ stations that beam signal back

home via CLT. Luxembourg’s liberal policy proved lucrative for the broadcasting sector in terms of tax

contributions. In the UK, though domestic political dispute over media ownership were key to regulatory

change, overtime, the UK broadcasting policy allowed the UK to issue licenses to any company (domestic

or foreign) that wanted to broadcast abroad via satellite. This catapulted European and non European

companies to set up stations.

Clearly, regulatory arbitrage was favored again. However, UK’s policy became controversial for reasons

that licenses were provided to a number of broadcasters that had been denied licenses in their home

countries. In particular, a number of US groups (e.g. UPC and CME) with multiChannel packages applied

for UK licenses in order to gain a foothold in the European market (Harcourt 2007). Thus, many companies

were able to evade national advertising restrictions in this way. For example, satellite channels were

sponsoring alcohol and tobacco products in France, bypassing advertising rules in Germany, and inserting

advertising spots into children's programming hours in Sweden and Norway contrary to those states'

broadcasting rules.

In a study conducted by Williams (2002), he observed that over 40 European satellite media companies

broadcasting from the UK did not observe TWF provisions on advertising in 2002. The US channels

broadcasting from the UK to the rest of Europe, used digital visual formats that have advertising windows

dedicated to specific national markets (Harcourt 2007). For example, children watching the Disney Channel

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in France will watch advertising targeted towards the French market, whereas children watching the same

program in Germany and other European states will see different advertisement relevant to them. Moreover,

Harcourt (2007) notes ‘there are channels broadcasting in one language, but which divide advertising for

different national markets. For example, Sky News, SAT1, RTL, Pro7 and Kabel1 momentarily show

different advertisements relevant to their counties of reception when they have commercials breaks in their

programming. . Then there Europe channels which have physically relocated their headquarters to the UK,

to bypass national restrictions now copy the American advertising formats. What this implies is that

regulatory arbitrage which is a consequence of EU’s regulatory competition has created more disorder than

standards in the broadcasting terrain of Europe.

Sun and Pelkmans (1995) argue that, so far EU mandates did not find the most efficient solutions to

regulatory problems and are been ineffective to sustain standardization in European Broadcasting.

Regulatory competition could be used as an alternative to harmonization of national rules by the EU

institutions in order to achieve optimal levels of regulation but not for finding ‘optimal sustenance for

maintaining cohesion of European cultural diversity and consolidation in journalistic performance. Though

the EC wants more regulatory competition, as greater competition would give European cultural products

grounds to compete globally and guide against cultural alienation from America, but obviously, this has not

worked because deregulation at national levels has opened vistas for non-European programming including

those of US to infiltrate the region.

Journalistic Performance of European Broadcasting Media:

Regarding to journalistic performance, the promulgation of liberal media policies acted as catalyst for a vir-

ile business model for the broadcasting institution than for a development of journalistic industry. There is

now more emphasis on the entertainment and less of information/educational goals of broadcast media.

Örnebring (2009) affirms that European journalism to a large extent is characterized as ‘having failed Eu-

rope’. He described it in three ways vis-à-vis: ‘failure of representation, failure of production and failure of

participation’. These aspects of failures have been blamed on the existence of ‘national filter hypothesis’ that

is the presence of national actors and values which interplay between national and European values in shap-

ing media programming and content (Krzyzanowski and Wodak, 2006). Örnebring (2009) using (Kopper et

al., 2006; Preston, 2006; Hallin and Mancini 2004) arguments respectively, infer that media representations

and coverage are generally framed in context relating to differences in national cultures and politics. But re-

gardless of whether differences between journalisms are influenced by culture or politics, the focus of all

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European broadcasting (whether domestic or foreign) are ‘localized’ because they have to broadcast to spe-

cific target national audience and not a European one.

Current evidence clearly points that a `European journalism' aimed at a Europe-wide audience will not de-

velop anytime soon of continuing importance of national concerns in news selection and presentation. What

does exist, however, is a small but possibly growing elite European journalism, focused geographically in

Brussels, the administrative centre of the EU, and in media aimed at an elite audience (Blumler and Gure -

vitch, 1995; Franklin, 1997; Humphreys, 1996; Weymouth and Lamizet, 1996, cited in, Örnebring 2009).

Therefore, regardless of EU’s market regulatory competition strategy, broadcasting in Europe is still deter-

mined by national conditions as political, cultural and economic interests, with economic interest now as the

dominant one.

Conclusion

Before the late 1980's ‘European media were predominantly national, public, supply-driven, paternalistic,

and information-oriented’. But since late 1980s, European-media have largely become international, com-

mercial, demand-driven, consumerist and entertainment-oriented’ (Bardoel 2009). These latter transforma-

tions show the economic-driven incentives that are now prevalent in European media landscape. However, I

will point at this juncture that the dominant journalistic culture that is uniform in Europe since the rise of

common European market for media products is priority to satisfy the marketplace and the commercial

needs of owners ‘rather than subscribing to a public service ethos of some kind’ (Örnebring, 2007), McQuail

(1998) opines: that the media ‘market is primarily aimed at owners and shareholders of media companies,

there is danger of concentration and monopolization by operatives, the preference for mainstream audiences

content and consumers are carved out from the citizens for special treatment’. This is contrary to the general

public interest initiative of the media.

Thus, the evidence for the commercialization of journalistic culture is overwhelming as journalism becomes

driven primarily by commercial concerns rather than concerns of independent professionalism. The move by

EU to create a regionalized market to sustain European cultural diversity and media economic products

globally, somewhat gave states and media companies reason to increasingly act toward economic drives

(Humphreys, 2007). In light of the foregoing I will propose that the EU should invite media professional

from member states and have a roundtable dialogue on how to come up with principles for European media

and journalistic practices. And not only be concerned with the economic aspects’ as it has previously been.

If the EU involves media professionals who are more focused on journalism practice rather then economic

media practice in the development of policies for the European media systems, perhaps the European public

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sphere might develop more rapidly as broadcasting media in respective European countries could be given

suasions to place more emphasis on Europe news and issues.

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