FULLTEXT01

Small Among Giants
Television Broadcasting
in Smaller Countries
Gregory Ferrell Lowe & Christian S. Nissen (eds.)
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Small among Giants
Small among Giants
Television Broadcasting in Smaller Countries
NORDICOM
Small among Giants
Television Broadcasting in Smaller Countries
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Contents
Gregory Ferrell Lowe & Christian S. Nissen

Preface 7
Gregory Ferrell Lowe, Christian Edelvold Berg & Christian S. Nissen

Size Matters for TV Broadcasting Policy 21
Robert G. Picard
Broadcast Economics, Challenges of Scale, and Country Size 43
Christian Edelvold Berg

Sizing Up Size on TV Markets. Why David would Lose to Goliath 57
John D. Jackson
with Yon Hsu (on Taiwan), Geoffrey Lealand (on New Zealand), Brian
O’Neill & Michael Foley (on Ireland) & Christian Steininger (on Austria)
The Socio-Cultural Context of Broadcasting Markets 89
Josef Trappel
Structure and Dynamics.
The Television Broadcasting Industry in Smaller Countries 109
Erik Nordahl Svendsen

From Sovereignty to Liberalisation.
Media Policy in Small European Countries 129
Chris Hanretty
The Governance of Broadcasters in Small Countries 161
Tom Moring & Sebastian Godenhjelm

Broadcasting for Minorities in Big and Small Countries 177
Annette Hill & Jeanette Steemers

Big Formats, Small Nations. Does Size Matter? 201
Author Biographies 217
Bibliography 2__
Preface
In September 2007 the BBC rounded up an international group of ‘the usual

suspects’ for a conference. Public broadcasters, policy makers and media
researchers from Britain and beyond deliberated Repositioning Public Service
Broadcasting: The BBC Charter Renewal and its Global Aftermath. Emphasis-
ing the ‘global aftermath’ hints at an important strand of conference discourse:
The BBC experience can be a model for public broadcasters in other countries.
Although a subtext initially, this became an explicit line of discussion when
the premise was challenged by participants representing smaller countries in
Europe.
There is within the continental broadcasting community a long and frequently
fruitful tradition of looking across the Channel for inspiration. That is evident
when governments and regulators (domestic as well as EU) are designing
policies related to industry structures and the governance of public service
broadcasting [PSB]. It is also evident when executive managers in both sectors
of the broadcasting industry seek fresh possibilities for organisational restructur-
ing or strategic renewal. As with many traditions this has often passed without
critique. It is simply taken for granted that big countries with big markets and
big operators are suitable for modelling, and that it is desirable to do this. This
book questions that assumption and tries to answer a range of relevant ques-
tions on the basis of empirical research.
Can one realistically expect a media market in a country with a few mil-
lion people to have the same opportunities as countries with many times the
population? How reasonable is it to assume that a country with a GDP that is
less than several trillions, or a per capita income that is half or less of a big,
rich country’s average, to have the same possibilities – or even all of the same
needs? Is it rational to expect a public broadcaster in a small country operat-
ing with a fraction of the revenue and workforce of Britain’s BBC, Germany’s
ZDF or America’s major networks to even be able to copy their way of doing
things? Is it wise to uncritically apply the same logic with the same structural
7
expectations for media regulation and strategising to small countries with small
populations, markets and languages? When conditions differ, best solutions
will differ in turn.
The need for clarification is urgent because broadcasters and policymakers
are increasingly stipulating that how things are organised and handled in the
biggest media markets provide generalisable models for all markets. This carries
the risk of false comfort by those seeking to devise some template with which
to steer decision-making, both among broadcasters struggling with uncertainty
in turbulent markets and regulators who want to reduce the arduous demands
for adjudicating complaints about PSB causing market distortion. Although
their pursuit is understandable, it risks false comfort because it relies mainly
on an untested belief that broadcasting is broadcasting – that ‘one size fits all’.
The Research Project

These concerns was the catalyst for an international gathering of media re-
searchers tasked with qualifying the hypothesis this book interrogates: Size is of
fundamental importance for understanding how broadcasting works, and why.
Our collaborators, each represented by a chapter, employ varying theoretical
perspectives and methodological approaches to examine the complex nature of
relevant phenomena. Despite diversity, which in our view enriches the results,
we have all worked collaboratively to diagnose characteristic challenges and
opportunities for television broadcasting in smaller countries.
The research and analyses presented in this book confronts the one-size-
fits-all presumption. In the main, we conclude that in crucial respects this pre-
sumption is not valid – one-size policies do not fit all countries anymore than
one-size strategies fit all companies. There are important differences between
countries that hinge on dimensions related to size that affect how broadcasting
companies, both public and private, are organised and operated, indeed that
establish real limits in how they can be organised and operated. These practi-
cal realities deserve close attention when policymakers contemplate remits,
remedies and regulations.
As so often in scientific research, a complex picture emerged from the ex-
amination of diverse strands of evidence. The resulting diagnosis points not
only at differences between bigger and smaller countries, a core concern, but
also at differences between smaller countries and between regions in Europe.
Further complicating the picture is the increasingly transnational architecture
of media industries and industry trade, along with comparatively enormous
differences in the scale of operations in companies operating across several
countries. The various conclusions reached by respective contributors point to
a range of crucial factors, not all of which confirm the general hypothesis that
8
Preface
governs this book – or at least not directly, although there is room for potential
indirect effects, as some authors note.
Despite caveats, the body of research reported here does confirm the de-
terminant importance of size in both population and economy in affecting the
structure and health of television markets. We should expect a wealthy small
country like Luxembourg to have a lot more going on than a poor small coun-
try like Moldavia. The complexity becomes still greater as one moves beyond
exclusively market-oriented criteria to consider those political and cultural
factors that inscribe the character of a media system in a particular socially and
historically situated context. This is especially evident in comparing western
and eastern Europe, but also northern and southern Europe – tasks that various
authors undertake in this volume.
In the east commercial broadcasting wasn’t even possible until after 1989,
and then was embraced with such enthusiasm that in many cases there was
a complete failure to exercise due diligence regarding regulations and licens-
ing. Public broadcasting was not easily accommodated due to its association,
or perhaps better to say disassociation, with state broadcasting. As a result,
corporate transnationalisation in media industries had a field day. In compari-
son, northern Europe with its heritage rooted in the Nordic welfare state and
strong protestant roots, has typically organised and funded the most dominant
PSB systems anywhere in the world. Southern Europe, on the other hand, has
been poorer and less convinced of this approach. In three of these countries a
history of dictatorship (Greece, Portugal and Spain) has encouraged perspec-
tives more akin to those in eastern Europe.
Language is another significant factor that must be factored in for analyses.
Its affects can be beneficial or a liability, and in many case one finds some
combination of the two. The relative strength of the television business in
the Scandinavian countries is arguably explained to a large extent by the fact
that they share a similar language, making it easier to cooperate for instance
in exchanging television programmes and participating in joint development
projects. Other examples are not as benign, however, as evident in the inter-
relation between neighbouring small and big countries that share a language,
as is the case with Austria-Germany, Belgium-France, Ireland-UK, and Canada-
USA – or Switzerland with France-Italy-Germany.
Finally, as hinted earlier, it should be noted that the operations of wealthy
transnational media corporations affect media markets everywhere, and can’t
be usefully assessed only by looking at the population or market size of their
home countries. One of the biggest and most successful companies in the format
trade, Endemol, is legally of Dutch origin. This ‘home address’ allows it to be
considered as a company based in a small country. But in fact Mediaset, the
Italian conglomerate, owns Endemol today, which obviously changes the picture.
Transnational media corporations require analysis beyond country size, which
9
may be of only minor importance of its self but is keenly relevant when smaller
countries can be bundled to create a regional or global market for these firms.
This more complex and nuanced treatment of size can be regarded as refuting
our general hypothesis that country size is of general importance for devising
appropriate media policies. As a matter of fact several chapters in this volume
highlight variables that indicate the way television broadcasting is regulated is
not primarily size-related. The ‘maturity’ of a country’s political culture and its
overall economic wealth are certainly crucial factors in categorising European
countries in north-south as well as east-west comparisons.
On the other hand this more complex treatment confirms our warrant for
counselling policymakers and media managers that trying to adopt templates
from bigger countries may not only be unsuitable, but can be damaging. There
is quite a lot that deserves deeper consideration when crafting domestic media
policies, especially when the objective is to ensure not only that mandates
are doable but also appropriate. The gloss often put on these matters when
mandates are decided does an injustice to many. At the least one ought to dig
into the evidence to ascertain the extent to which common assumptions that
ground trends in media policy and corporate strategy are legitimate.
No one in this volume is arguing that policymakers or broadcast manag-
ers shouldn’t look abroad for inspiration. They should, and very often must.
In today’s increasingly globalised media industries and cultures not doing so
would be another variant of failing to exercise due diligence. But the research
and analyses reported in this volume suggests there are many good reasons to
interrogate whether it is reasonable to assume that any country can conform
to dynamics that do not characterise its own internal conditions. This seems a
sore spot among EU policymakers, and sometimes also domestic policymakers.
Of course it is difficult to craft policies that accommodate diversity, complex-
ity and variance. A key problem is that the outliers – the few comparatively
big, rich and powerful countries – are seen as the preferred models precisely
because they are big, rich and powerful. In scientific terms, however, they are
in fact atypical – they are the aberrant cases and exceptions to the rule, rather
than the norm. In that light seizing on these cases as exemplars can certainly
distort the picture and skew analyses. One really has to wonder why there
should be such evident surprise when whatever was being modelled on such a
basis ends in failure? That is rather inevitable when “the differences that make
a difference” are too often not understood – or actually even considered (to
use a phrase popularised by the sociologist Gregory Bateson).
What’s needed is analyses of empirical evidence that tries to answer a variety
of questions that are obviously consequential for drafting policy and crafting
strategy. How does the scale and scope of national economies influence opera-
tional conditions? How does the size and composition of a population establish
parameters for audience formation? What are the practical effects on a smaller
10
Preface
media market when there are competitive pressures from media situated in a
larger neighbouring country, especially when the smaller country shares the
language (or a close dialect) and even some cultural heritage? Are media markets
in smaller countries impacted disproportionately by international media firms
and contents, financial conditions and systemic requirements, or cost structures?
How does the comparatively limited capacity of in-house production play
out on TV screens in smaller markets compared with bigger markets? In what
ways and to what extent do programme profiles in smaller market companies
differ from larger market broadcasters? Are there generalisable characteristics
concerning relations with governments and audiences when comparing smaller
to bigger countries? Of course we can’t hope to answer all of these questions
in a single volume, and probably only a few with high certainty. But these
are the kinds of questions we are trying to interrogate, to the extent possible
within our own limitations.
While not wanting to downplay the usefulness of studying how things are
handled among market leaders, especially given the state of flux and general
uncertainty characteristic of media industries today, the research documented
in this book strongly suggests that caution is warranted. A model is only valid
to the extent that the conditions accounting for its construction are compara-
tively similar in those other contexts where it is to be applied. In broadcasting,
such applicability is very often not the case. It is therefore highly problematic
to assume that conditions and dynamics characterising countries with bigger
populations and wealthier media markets are inherently appropriate patterns
for countries with smaller populations and less wealthy media markets.
Sizing up size
Conceptually one can distinguish between various facets of size. Facets
that are typically important include territorial mass1, industry size2, military
strength and/or presence, population size and/or density, market size and
economy size3. Omitting the military4 facet, most of the others can be argued
1. Territory can be measured as square miles or kilometers, but also or in combination with population density.
Both have principle effect on the media system due to infrastructure requirements.
2. This is more problematic than at first glance because there are actually several media markets (radio, TV,
web, content production, newspapers, magazines, etc), which in some ways overlap, or can be handled as
an aggregate for analytical purposes, but in many respects can be discrete. We think the general point made
in the paragraph is valid, however.
3. Economy can be measured in different ways, as well. The usual way is gross domestic product (GDP). But
it is also measured in per-capita income and productivity, and sometimes according to household dispos-
able income. It can also be adjusted for parity, as in the chapter by Robert G. Picard in this volume. Our
purpose is not to discuss economic theory or dig into the nuances of measurement, although some of that
is handled in the book to enhance clarity.
4. This is not to indicate that a military cannot influence the media – in many cases they are strongly influential.
Rather our point is to argue that continuous effects on media are relatively limited to a few most widespread
and typically fundamental national characteristics.
11
to have some continuous and fundamental influences on a country’s media

in systemic terms.
When conducting comparative research we must define when a country
is considered large or small – i.e. establish criteria for categorising. We could
use a criterion that focuses on population size, as for example in a recent
special issue of the journal Gazette (Puppis et al 2009). In that issue research-
ers considered a country to be small if it has less than 15 million inhabitants.
We could instead rely on a definition of smaller as those countries with less
than 5 million inhabitants, the criterion selected by the Commonwealth Sec-
retariat (2008). Some have even proposed that a population above 5 million
should be considered large and only whose below 1,5 million as small – with
everything in between considered medium (Ott 2000). There is no universally
agreed criteria or definitions. Criteria used by different analysts vary according
to which kinds of relationships are of primary research interest, and the cases
they are scrutinising. Some have also critiqued the very notion that popula-
tion size is a useful variable (e.g. Hallin 2009). But in general most agree
that it is useful (Puppis et al 2009). Bon the research results reported in this
book, we conclude that size is very relevant for media policy – particularly
for broadcasting.
We have chosen 20 million inhabitants as our dividing line to distinguish
between bigger and smaller countries. As discussed by Robert G. Picard in his
contribution, we chose this figure because of requirements to achieve critical
mass in TV as a medium and because this is in line with analysis conducted
by the European Commission (2009). It is also proximate to recent research in
comparative media policy (Puppis 2009). But we certainly agree that popula-
tion size is but one of several size-related facets of importance. As mentioned
already, two others that are especially treated are market size and general
economic conditions. So although size is an admittedly ambiguous concept and
can only usefully be applied in relative terms, it is most fruitful when applied
systematically – as we attempt in this book.
In the literature on ‘small and big’ one also finds considerable variety in
terminology describing the unit of analysis. In political science and studies
about international politics, ‘state’ is most often used because that is the rel-
evant actor for discussion about alliances, negotiations and conflicts. In cultural
and linguistic studies ‘nation’ is generally considered more relevant because it
focuses better on the complexion and interaction of factors that have a bear-
ing on national identities. We have chosen ‘countries’ as our principal term
because it is best for encompassing the broadest range of relevant variables
under analyses across chapters, which look at varied dimensions of television
broadcasting (media regulation, plus population size and market size, plus
issues of language and culture, etc). But there are exceptions in this volume,
as well, where one or another of the alternative terms is a better fit for a topic
12
Preface
being treated by the respective author/s. When that makes the most sense for
analysis and meaning, we of course approved the choice.
Caveats
Although seemingly self-explanatory due to everyone’s familiarity with radio
and television, a recurrent complication in discussions about broadcasting is
that each observer mainly understands what that is, and explains what it means,
on the basis of lived experience in one or a very limited number of societies.
This is of course pertinent for the researchers and editors of this book, as well.
Throughout the project the editors and authors have taken pains to remind
each other of the idiosyncratic nature of our perceptions, and worked to remain
self-critical. Of course some of our various dispositions are apparent, especially
in treating public sector broadcasting. Most of our contributors have been in-
volved with PSB in one way or another, sometimes for decades. Most are also
from smaller countries and see the world from this vantage point. Both factors
must colour our perspectives. On the other hand, considering that the book is
mainly written in the European context and for an audience familiar with the
role of public service broadcasting, and given the typical size and importance
of PSB in many of our case countries, we could expect readers to take this
into account when sifting through the results and considering the implications.
We have chosen to focus mainly on television. We acknowledge the vital
role that radio plays in daily life for millions. Indeed, one editor and some
contributors ‘cut their teeth’ in radio at the start of their careers. The issue was
debated, and we agreed it is best here to focus on television because that is
the locus of policy attention and thus the most pertinent area of study for this
project. We concluded that radio deserves its own treatment and could not be
fairly handled in a book of this size. Similarly, we have not focused primarily
on so-called ‘new media’, which hasn’t been new for quite some time, and
again because broadcast television is a far more dominant factor in electronic
media markets both in economic terms and as the focal point for policy and
regulation. That said, our contributors were not ‘forbidden’ to discuss radio or
the internet whenever these media were important for their respective analyses
or argumentation.
Although the inspiration for the book grew out of discussions among various
members of our research team in response to the BBC conference highlighted
at the beginning, another important editorial decision was to expand the focus
of analysis to both incorporate and juxtapose the two sectors that comprise
the European dual television market. Thirty odd years after the dissolution of
public monopoly in European television it is no longer useful to analyse, and
is impossible to understand, what’s happening in either the public service or
13
the private commercial sectors without looking at their interaction. That is the
essential dynamic governing developments in European broadcasting.
Overview of the book

A book of this kind could be organised in various ways. A typical option in
media studies is to arrange each contribution as a case study of one country
and conclude with a chapter that attempts to summarise all the cases as a col-
lective. That approach is less useful here because our purpose is to encourage
comparative analyses to grasp at underlying dynamics. Of course none of the
contributors are able to deal with any totality of the relevant universe of cases;
each had to focus on some limited scope for analysis. But we all agreed to
focus on issues rather than countries because that is more conducive to unravel-
ling complexities and identifying dynamics, and we hope thereby to generate
deeper than usual insights. To the extent that we have succeeded our readers
should come away with a richer appreciation of nuances and with potentially
higher degrees of generalisability.
The substance of this book treats the following issues:
1. The character of the market as a societal context
2. Financial conditions and resource availability
3. Contending supranational, national and regional interests
4. Content production and acquisition characteristics
5. Pivotal issues in media policy and regulation
6. The structure and dynamics of the market as an industrial system
We considered also a chapter on broadcast use and audience trends. It is a
pertinent dimension and should be addressed, but every book has its limits
and we decided to leave this area for others to develop, perhaps supported
by some steps taken in this volume.
The research conducted in the production of the chapters was framed by
two steering questions:
• How does a country remain in control of its own audiovisual destiny?
• How does it deal with challenges brought on by external media influ-
ences?
Each chapter investigates priority challenges in the respective areas of topical
focus, working to summarise identified patterns. Of course no single collec-
tion of this size can provide comprehensive, definitive answers. But we think
14
Preface
readers will come away with a firmer grasp of the issues and better possibilities
for arriving at useful answers.
This book demonstrates a shared interest to support deliberations in media
policy and strategic planning. Our effort has been focused on generating in-
sights on the basis of evidence rather than making arguments on the basis of
normative ideals. There is nothing wrong with normative ideals, indeed such
are essential to properly consider the role and functions of media – i.e., their
‘remit’. But that is not what this book sets out to be mainly about. For this
reason we do not stipulate what media policy ought to be. Deciding that is a
normative exercise best left to those responsible for directing and managing
broadcast operations in each society. We think, however, that the contents of
this book will be helpful to improved understanding of some practical reasons
why and how size matters to broadcasting policy, for proposing and declin-
ing options in systemic modelling, and in considering options for operational
development in every society grappling with these issues. Our collective goal
is to make some useful contribution to the thinking that grounds policymaking
and steers strategic planning among responsible agents working in each context
to create a broadcasting system that is optimal for its distinctive conditions,
while also recognising diverse needs and intentions.
Although many of our contributors, and the editors as well, have a shared
history of involvement in PSB, we want to avoid taking any partisan stand. This
book is neither for nor against PSB or commercial broadcasting; it does not
promote a specific arrangement. The contents present evidence and pertinent
discussion about what television broadcasting is, how it works as a function
of its nature as a medium and variables keyed to size-related dimensions, and
why that matters for those who must deliberate on the normative dimensions
that are outside the focus of our investigations.
The editors and authors support all good faith efforts to craft the very best
broadcasting system for each country’s respective goals and needs, and rec-
ognise that what that means must be decided by those who are entrusted to
make these decisions. Our work succeeds to the extent that readers come away
agreeing that size must be accommodated in deliberations about how things are
done, and with greater caution in presuming how they are done in one context
may be suitable for modelling in other contexts. Of course resource limitations
bound every decision and every responsible agent must legitimate how scarce
resources will be used, and why in a particular configuration. We hope this
book is helpful in efforts to manage that well by contributing to greater clarify
about what is essential in media regulation today. This is especially important
as a great deal of attention in this volume is devoted to explaining why some
form of intervention in broadcasting is typical rather than exceptional. This is
primarily because TV is a public good and has never only been about content;
it has always been at least as much about context. This book works to establish
15
more clearly than before why and how size matters for policy-making and in
strategic planning. Content might be king; but context is the kingdom.
Chapter summaries
In the introductory chapter, Size Matters for TV Broadcasting Policy by Gregory
Ferrell Lowe, Christian Edelvold Berg and Christian S. Nissen, the authors set
the scene by relating the perspective of this volume to earlier studies on small
countries in varied social science disciplines. The special features of media
markets are underscored, especially for television, both as a field of study
and as an area for business strategy and regulation. The core variables (size
of population, general economic conditions, and the character of television
markets) are clarified and related to other important factors variously treated
elsewhere in the book. These include, for example, the maturity of political
systems, more general cultural value systems, and issues related to degrees of
vulnerability and dependency. The chapter argues that size certainly matters
in television broadcasting, but acknowledges good reasons to take other vari-
ables into account when looking at specific markets and working to explain
the policies of particular actors.
In chapter two, Broadcast Economics, Challenges of Scale, and Country
Size, Robert G. Picard explores how country size and the economics of broad-
casting are related. He shows why scale issues create different conditions for
broadcasters and how these affect structures, operations, and costs. He stud-
ies 31 European nations to demonstrate how size, financial resources, market
structures and services, and content provision are related, and in consequence
strengthening the conviction that for television broadcasting operations, size
really matters.
In chapter three, titled Sizing Up Size on TV Markets: Why David would Lose
to Goliath, Christian Edelvold Berg argues that every size of television market
has characteristic dynamics that are more or less applicable everywhere, and
that the explanation of key difference lies in “relative market leverage”, concep-
tualised as an expression of a market’s inability to allocate resources efficiently.
He shows how this is the case due to conditions of imperfect competition and
high potential for market failure in media goods. Quantitative analysis clarifies
the availability of revenues in European television markets and investigates the
relationship between population size and economy size to demonstrate how
size influences market volume. He examines the relationship between size and
the level of investment in originated TV content programming, and concludes
with discussion about the importance of size to how TV markets are structured
and how TV systems work.
Chapter four is a group effort steered by John D. Jackson with contributions
from Yon Hsu, Geoffrey Lealand, Brian O’Neill, Michael Foley and Christian
16
Preface
Steininger. The chapter provides a good overview of The Socio-Cultural Context

of Media Markets. Here ‘size’ is explicitly treated in relational terms. Considering
the cases of Austria, Canada, Ireland, New Zealand and Taiwan, the authors
explore media systems and their market components in relation to the broader
social, political and cultural frameworks in which each case is located. They
focus on the implications of size for dependency relations with their large
neighbours (respectively Germany, the USA, the UK, Australia and China).
In chapter five, Josef Trappel examines Structure and Dynamics: The
Broadcasting Industry in Smaller Countries. This chapter examines structural
conditions and the performance of television broadcasters in smaller countries,
arguing that television broadcasters in smaller countries have fewer business
options than their counterparts in larger countries. He demonstrates how
these restrictions affect their resources in terms of finances and personnel,
and restrict their room of manoeuvre with regard to programming options. In
smaller countries the TV industry is significantly similar to characteristics that
describe highly concentrated media markets. The argument follows from the
essential fact that smaller television broadcasters are confronted with economies
of scale problems and, as a consequence, with conditions of vulnerability and
dependency. The chapter ends in proposing areas of television governance in
which smaller countries require different rules than those generally considered
appropriate in larger countries.
Erik Nordahl Svendsen titles his contribution From Sovereignty to Liberalisa-
tion: Media Policy in Small European Countries. In chapter six he argues that
in the early 20th century countries had cultural, sovereign goals when starting
television, which account for a strong public service tradition in western Europe
and state broadcasting in the east. With advances in the EU single market and
the collapse of the USSR after 1989, all markets were liberalised and televi-
sion became an increasingly transnational industry. This chapter interrogates
performance in fulfilling EU demands for European Origination works (i.e.
the 50% quota), concluding that it has not been legally respected or enforced.
At the same time, it’s clear that EU competition policy has been effectively
used by private sector companies to raise the pressure on public broadcast-
ers, which are of relatively great importance especially in small countries. The
chapter demonstrates how European TV policy works against the interests of
small countries.
The seventh chapter by Chris Hanretty investigates patterns in governance.
Titled The Governance of Broadcasters in Small Countries, he assesses patterns
in governance for both sectors in television broadcasting, public and private.
He concludes that although issues of governance and control have often
seemed more salient for public broadcasters, both sectors have issues with
independence – from the government of the day in the case of PSB firms and
from dominant shareholders in the case of private broadcasters. The chapter
17
demonstrates tight links between the de jure (legal) independence that pub-
lic broadcasters have, and de facto independence they enjoy. Hanretty finds
that smallness is unrelated to either de jure or de facto independence. Rather,
smallness affects the potential sources of attacks upon independence – and the
experiences broadcasters can draw upon to defend themselves.
In chapter eight, Broadcasting for Minorities in Big and Small Countries, Tom
Moring and Sebastian Godenhjelm conduct analysis around the idea that media
production is shaped by society’s general culture. In this chapter we find that
media products not only have informational and ‘consolidational’ functions, but
also confirm in each case some relatively peculiar and variable social and cultural
order – a society’s so-called general culture – where production practices are
carried out. The authors present their findings under the rubric of a ‘restitutional’
function for TV broadcasting. Understanding the import of social and cultural
order is among the biggest challenges that policy makers must face today.
In our final chapter, Big Formats, Small Nations: Does Size Matter?, Annette
Hill and Jeanette Steemers combine political economy with audience analysis
to generate insights about production in and between broadcast markets of
varying size. The results deepen understanding of the relationship between
media production and reception in bigger and smaller nations. The analysis
indicates small countries are limited by the size of their domestic markets, the
lack of sufficient resources to sustain more expensive entertainment shows,
and the cheapness of overseas products such as reality entertainment formats
(e.g. X Factor and the Got Talent franchise). Even for those successful small
producers, consolidation and integration within a globalised marketplace as
part of a ‘big country company’ seems to be the destiny for the few who break
out internationally.
Acknowledgements
The editors would like to thank the authors for their patience in working on
what has often been a moving target. Despite a clear orientation and agreed
objectives from the beginning, the development of this book has been organic
by necessity. As various chapters have gotten closer to completion we’ve needed
to go back to earlier chapters and request further revision or reorientation. The
authors have done good work and we deeply appreciate their commitment to
the quality of results. We have also enjoyed this collaboration.
Editors and authors alike wish to thank the Media Management and Trans-
formation Centre at the Jönköping International Business School for the funding
and support that made the project possible. We especially thank Barbara Eklöf
and Danielle Tarnhamn for handling the arrangements for our international
meetings.
18
Preface
Finlly, we want to express our appreciation to NORDICOM for publishing

the book, and moreover for being both highly professional and easy to work
with in the editorial process.
Tampere, Finland and Copenhagen, Denmark, December 2010
Gregory Ferrell Lowe Christian S. Nissen

19
Size Matters for TV Broadcasting Policy
Gregory Ferrell Lowe, Christian Edelvold Berg

& Christian S. Nissen
As discussed in the preface, we consider country size a key determinant for any
explanation of how television broadcasting is organised and works in compara-
tive contexts. In this introduction we offer more detail to understand why we
hold this view. This discussion has implications for media policy and company
strategy. We begin with an overview of ‘small state’ theory, which grew to promi-
nence during the Cold War. We then elaborate important features of particular
relevance to the media environment, which need to be accounted for any useful
articulation of policy pertaining to broadcasting systems. This chapter offers a
close focus on elements of research reported in this volume found most important
for defining “smallness” as having a decisive bearing on television broadcasting.
Small countries as a specialised area of study

Today’s interest in the particular, perhaps peculiar, dynamics of small countries
is not new. Rather this can be understood as a reinvigoration of specialised
studies that first bloomed during the Cold War. Interest at that time was rooted
in political economy research and the concern was keyed to policy develop-
ment in the era of sharpening bipolarity. Researchers wanted to understand
the required conditions for smaller states to maintain independence in the epic
struggle between the USA and the USSR. Various small states tilted more or
less strongly towards one or the other side, with a significant group demand-
ing recognition as “non-aligned” states. Consequently the focus of attention
in discussions about size hinged on questions pertaining to power, or lack
thereof, characterising small states when compared with the Superpowers and
their cornerstone allies – typically also larger countries.
Although often measured as military capacity and economic resources, i.e.
in things that could be quantified and counted (Morgenthau 1967), it became
increasingly obvious that smallness was not an objective parameter. Analysts
21
began to also take account a country’s capability to apply its resources. The
variable influences of proximate as well as historic cultural and social relations
became increasingly pertinent, as well. Deepening understanding encouraged
differentiation on the basis of weaker and stronger states as it was evident that
size is relative, not absolute. As Rothstein observed (1968: 21):
The question then is what characterises small powers as unique entities, as
something other than merely weaker states? The answer, one presumes, must
rest on an analysis of patterns of behaviour which remain the same for small
powers, despite basic shifts in the international system.
His articulation was a fresh point of departure. The study of small states diver-
sified into a broad range of variables and behavioural characteristics reported
in a burgeoning collection of studies on international politics (Koehane 1969;
Dosenrode 1993 &1997), political economy (Katzenstein 1985; Pedersen and
Campbell 2006) and economics (Robinson 1960; Alesina and Spolaore 2003).
Fast-forwarding to the present day, we are by now faced with so many per-
tinent variables that the sheer complexity makes it difficult to achieve a man-
ageable solution, and manageability is certainly necessary for achieve anything
useful in comparative research. The Cold War ended long before the challenges
inherent in settling this matter. Deciding the key variables is a work of on-going
refinement and remains an enormous conceptual challenge, certainly one this
book can’t hope to resolve. Candidate variables especially include size of popula-
tion, economic wealth measured in GNP or GDP, and territorial size. These must
be weighted against less easily quantifiable factors, especially political culture,
language, domestic social relations, and international influences.
Moreover, the structural context within which small states operate still has
considerable influence on their relative status. That was evident earlier in military
alliances such as NATO and the Warsw Pact, and equally today in economic
systems that are pivotal in regulating trade such as the WTO and the EU Com-
petition Authority. Small states aligning with larger ‘powers’ can gain a degree of
influence or affluence disproportionate to their objective characteristics in isola-
tion. Of course the opposite is also possible, and could be said about less highly
developed countries in former colonies. The interrelations and permutations
characterise one important school of developmental studies that conceptualise
relations as a matter of “centre–periphery” dependencies. For example, Amin
(1970) and Emmanuel (1972) argued that relatively small European countries
continued to dominate most former colonies due to structural dependencies
despite the fact that these countries often have larger geographical territories,
bigger populations and more natural resources.
Thus any effort to categorise countries as small and large is devilishly dif-
ficult. The path taken is mainly determined by the focus of study. That is the
case here, as well.
22
Hybrids and intervention

It is clear that size is both a relative and a contested concept. There is a com-
mon sense understanding that size matters and that bigger often means more
powerful. But there is only limited comparative empirical research about media
systems and operations as a function of country size (Siegert 2006). Despite
its evident importance for policy and strategy, size has been largely neglected
here, seemingly due to the formidable conceptual difficulties in clarifying what
it means for research purposes, and difficulty in agreeing on a standardised
meaning also for policy purposes. As the chapter by Chris Hanretty demon-
strates, most often we find non-significant differences between countries with
regard to the affect of size considerations on policy formulation. New effort
in recent years does address this lack, especially the work of Alesina and
Spolaore (2003), and Puppis et al (2009). But the conundrum is not resolved.
Our purpose here is not to treat size per se but to investigate how variables
pertinent to size matter for operational conditions and practical requirements
in TV broadcasting. Our interest is in how size equates both with opportuni-
ties and limitations in systemic terms – a specific matter of research interest.
This issue needs to be studied empirically to establish its importance for
achieving systematic comparative study that can include countries of every size,
as well as those with and without a same-language neighbour, especially where
that neighbour is bigger and also, often, wealthier. This was a highlighted con-
clusion in the aforementioned recent journal issue devoted to research about
small nations (Puppis, d’Haenens, Steinmaurer & Künzler 2009). According to
the authors there, “Only systematic cross-country research, considering big and
small states with and without giant neighbours sharing the same language, will
help us answer the question of how size matters” (ibid: 110). We agree, but
would add that such a framework is also needed for useful analysis between
smaller countries.
When surveying the policy domain it’s clear that even when size is accom-
modated as an important variable it is not typically treated on any empirical
basis. That broadcasting markets are incapable of independently securing all the
services needed by everyone is a well-rehearsed feature of policy discourse. The
thesis of market failure grounds the legitimacy of state intervention in electronic
media markets (see Peacock 1986; UNESCO 2005; and EP Motion 2009). This
is evident in the 1997 Amsterdam Protocol on Public Service Broadcasting for
EU Member States, which accords domestic government the competence to
“confer, define and organise” the provision of public services in media for the
nation. The Protocol legitimates principles that ground the 2009 Communication
on Broadcasting issued by the European Commission regarding the application
of state-aid rules to PSB firms. It is specifically noted in point 42 of the Com-
munication that small member states have unique difficulties financing public
23
service media [PSM] because the cost per inhabitant is higher than in countries
with bigger populations, at least for comparatively wealthy member states.
Even in the United States, the largest and wealthiest commercial media market,
there is renewed debate about subsidising the newspaper industry in light of
economic difficulties keyed to the recent recession (Downie & Schudson 2009).
Smaller European countries are especially important because they react dis-
tinctively to economic change, using flexible adjustment policies for industrial
development that combine a general preference for liberalisation with a ten-
dency to provide compensation. Christian Berg discusses this at some length in
his chapter. Sometimes referred to as the ‘Nordic model’, but actually indicative
of other countries to varying degrees as well, the objective is on the one hand
to avoid protectionist policies (that often characterise policy in large liberal
countries) and, on the other, to encourage structural transformation of statist
traditions. This distributes market dependencies widely instead of focusing such
on discrete markets. Rather than going full sail in one go, the smaller countries
of Europe evidence a political will to preserve continuity through incremental
adjustment to wider trends via ad hoc measures, improvisation and intervention.
This is not done to constrain liberalisation, which on the contrary is generally
preferred today as it is understood to be an essential pre-condition for rising
prosperity. Rather the reason is to govern dynamics inherent in liberalisation,
which needs to accommodate variable needs under local conditions.
In his work on the political economy of nations, Peter J. Katzenstein sug-
gested that country size affects both degrees of economic openness and the
character of political administration. Systematic differences should be expected
when comparing bigger and smaller countries. But even among smaller coun-
tries, Katzenstein identified comparative differences between ‘liberal corpo-
ratism’ in Switzerland, Belgium and the Netherlands and ‘social corporatism’
in Austria, Norway and Denmark. In his analysis, Sweden represented some
combination of the two (and we could probably add Finland, as well)1. At heart,
the difference is reflected in where and how small European states adapt to
economic change. His contrast hinged on the global adaptation and private
compensation of liberal corporatism, compared with the national adaption and
public compensation characteristic of social corporatism. Katzenstein (1985:
134-135) concluded:
Flexible industrial adjustments are not a uni-dimensional response to chang-
ing market conditions or political pressures. Instead, as I have shown,
democratic corporatism has two variants, one liberal and the other social.
Both variants respond to the economic as well as the political requirements
of adjustment. Liberal corporatism accepts market-driven change but makes
political gestures necessary to keep disadvantaged industry segments, firms,
1. For a useful introduction to Katzenstein’s thinking on liberal corporatism and social corporatism, see http://
www.tidsskrift.dk/visning.jsp?markup=&print=no&id=95546. See also Katzenstein 1985: 105.
24
or regions integrated in an overarching consensus. Social corporatism seeks

to cushion change within the limits that markets permit…. Although liberal
corporatism prizes efficiency more highly than equity, and social corporatism
prefers equity to efficiency, both preferences are constrained by the shackles
of democratic corporatism and the logic of markets.
One consequence when applied to media markets, especially TV broadcasting,

is that smaller European countries have typically created hybrid arrangements
in efforts to slow the speed of growth in competition with international com-
mercial television channels. They have not actually tried to stem such growth
per se. This was first evident in efforts to manage the speed of competition
growth in radio markets through adjustment by incremental experimentation
and developing regulation that unfolded in steps. In our view this is a reason-
able approach. It is also understandable given fears of growing instability in
domestic media systems, especially the potential erosion of domestic production
subsequent to the Television without Frontiers directive that was issued by the
European Commission in the late 1989. That directive required harmonising
national laws regarding broadcast licensing. Although the declared objective
was to “ensure the free movement of broadcasting services within the internal
market”, the practical impact has been dramatic grown in commercial TV opera-
tions in Europe – and growth rather than decline in the presence of American
origination content (see the chapter by Erik Nordahl Svendsen).
EU member states have complied with the directive, but in smaller countries
measures were often taken to ensure viability in the domestic programme sup-
ply. In Finland, as a typical example in this case, it was understood that trans-
national commercial corporations would not produce much programming in
Finnish. Even Swedish is a bit of a stretch, and mainly viable when viewed as a
regional language that quite a few speak in neighbouring countries. Moreover,
even Finnish commercial television companies, mainly owned today by inter-
national firms largely based in Sweden, have acquired the lion’s share of their
programming from international trade originating in the USA and the UK. Only
the national public service broadcaster, YLE, has consistently programmed the
bulk of output in Finnish and about matters of specific local importance (i.e.
current affairs). This explains the hybrid approach more generally in smaller
countries, and should be recognised as a significant attribute of Europe’s dual
market structure in broadcasting.
It is equally important to observe that patterns in system development are
different in southern Europe, historically characterised by higher acceptance
of commercial funding even for PSB and with less concern about potentially
negative affects of private competition on domestic supply. This may be
changing, as first evident in France2 and now Spain, with similar discussions
2. The effort to eliminate advertising from French PSB may not succeed as envisioned by the government of
President Sarkozy. See the report by Whitehead 2010.
25
underway in Norway and Portugal (EBU 2009). At any rate, the historic pat-
tern makes sense when remembering that some countries in the west (Spain,
Portugal and Greece) have recent histories of state broadcasting associated
with dictatorships, as typically also the case in much of Eastern Europe. In
such contexts the private sector has been viewed as an antidote to oppressive
legacies in broadcasting.
Meanwhile, the financial situation for public broadcasting in some Western
European countries that depend on license fee revenue has become increas-
ingly uncertain. Political complications have ended, for now at least, efforts
to pass a proposed change from a TV-based fee to a more comprehensive
media-based fee in Finland, for example (for a useful overview see Ala-Fossi
& Hujanen 2010). Recent reports indicate the BBC was forced to compromise
its financial situation to protect income generated by the fee from viewers age
75+. To keep that share of income the government is requiring the BBC to take
added financial responsibilities for the World Service as well as S4C in Wales,
and to achieve reductions amounting to about 16% of their budget over the
next four years (Martinson 2010). Moreover, the growing popularity of various
mechanisms for regulating PSB is, in affect, hobbling efforts to develop these
companies into PSM firms, as evident in the drive for ex ante mechanisms (e.g.
the 2005 Public Value Test in the UK and the 2008 Three-Step Model in Ger-
many). Demands for similar procedures are percolating in an increasing number
of EU member states. Instability in European TV broadcasting is evident in the
financial status of broadcasters in the private commercial sector, as well. In this
sector margins have declined as a result of over-leveraging during the boom
years, and since 2008 to under performing advertising markets as companies
drew down in the face of declining sales and growing deficits.
Protective measures for domestic markets have not only been taken in smaller
countries; many bigger European countries have similarly acted to protect
or nurture (depending on one’s perspective) domestic production. That has
been characteristic in France where language and culture are always the stuff
of politics. But in fact most states have made varying arrangements to cope
with the impact of deregulation, convergence, consolidation and digitalisation,
which are together fuelling globalization in media industries. It is important to
understand that as markets, all states are not equal. The degree of competition
varies, and also the degree of attractiveness for investment. The main point
argued here is that size has policy implications as a relative feature for most
countries, at least in Europe, as a function of being larger and/or smaller in
comparative terms. Commercial broadcasting can’t accommodate the ample
provision of some desired services, and this is what legitimates state interven-
tion3. This is the generalisable conclusion of two influential reports, as important
3. There is a theoretical line of argument concerning this based on the attributes of programmes as public
goods and merit goods.
26
examples, despite their respective assessments of different scales of analysis

and bookending a twenty-year period of operational practice (Peacock 1986;
UNESCO 2005). Key conclusions suggest:
1. The market cannot be expected to provide a wide variety of programmes,
especially domestic informational and educational programmes, because
they are unprofitable for commercial business;
2. The cost of establishing and maintaining a system of universal coverage is
unattractive for commercially funded media because it is more profitable
to focus on highly urbanised areas where population is dense;
3. Regional and local services, especially news, are expensive to provision
and very often have been loss leaders in commercial broadcasting;
4. Minority services are often too expensive to provision, especially in small
countries, either because the population is not big enough in absolute
terms to attract advertisers, or because the population doesn’t have suf-
ficient disposable income to make advertising to them worthwhile;
5. Domestic media are necessary not only for strengthening national cultures
and identities, but moreover for encouraging their on-going development.
Thus, intervention in broadcasting markets continues in most countries, a pref-
erence rooted in perceptions that it is in the ‘public interest’ to provide specific
goods and services that benefit society as a whole and beyond the narrower
self-interests of individual consumers (McQuail 1992). In this way policymak-
ers take the effects of size into account, even if mainly perceived in terms of
market conditions. It is widely understood that market size influences conditions
and the conduct of companies by establishing parameters for profitability. The
kinds of regulation and the comparative degree of public investment in media
vary as an affect of size. If left unregulated the market will act differently than
when regulated, as has been clearly evident in the United States in the period
since the Reagan presidency launched a deregulatory drive that was cemented
during the Clinton presidency. It has been similarly clear that wherever there is
a strong public broadcaster the market behaves differently than under condi-
tions where there is a weak PSB presence, or none at all.
Grappling with similarities and distinctions in broadcasting

Broadcasting has general characteristics that are a function of the platform
as a technology and in its financial parameters (see the chapter by Robert G.
Picard). For example, terrestrial broadcasting requires the use of frequency
spectrum, which is a limited resource. Even with increased efficiency there
27
is not yet, and never well be, enough spectrum space for everyone to have
a personal TV channel. This is the central reason that a licence is required to
have a TV channel, and why television operators have typically been mandated
with more obligations than newspapers. That example suffices to illustrate the
technological dimension. Regarding financial parameters, the digitalisation of
broadcasting technology requires a scale of investment that accounts for many
countries deciding the costs must be at least partly covered by the state or by
telecom operators, and in quite a few European countries for stipulations that
PSB operators are obligated to make significant investments.
One should also consider the relationship between content and finance.
All programmes feature some format structure. The rights to use a successful
format are expensive in today’s highly competitive markets. Moreover, different
genres have distinctive cost structures and production process requirements.
Producing news programmes is different from producing drama programmes,
even though both are expensive. It is easier, however, to offset the cost of
successful drama production than daily news production because there is
only the most limited after-market for news while drama products can enjoy
long shelf lives and benefit from windowing strategies. The means of fund-
ing the two types of content also vary, and more or less in the same ways
in most countries. Co-production is increasingly characteristic to spread the
risk and maintain quality as costs rise, and importing formats that have been
successful elsewhere is common practice today – another way of reducing
risk, as well as cost (see the chapter by Annette Hill and Jeanette Steemers).
Most news organisations, however, bear high internal costs for coverage and
it is more difficult to co-produce, although collaboration and content shar-
ing agreements are on the increase – again, mainly for economic reasons.
Despite differences, all genres of television programming have comparatively
high degrees of demand uncertainty. This means broadcasters can’t know for
certain how successful anything they offer will be in a competitive market,
and moreover that something which is popular today may not be popular
tomorrow (DeFillippi 2009).
General similarities in the medium as such should not blur crucial distinc-
tions. How broadcasting is organised, funded and mandated is quite varied for
both practical and intentional reasons, a point recognised by the Amsterdam
Protocol for PSB, but really applicable more generally to the regulation and
operation of broadcasting systems. To use an obvious example, the structure of
broadcasting in the United States and Europe feature fundamental differences
both in ideas about media and in the intentions that are considered essential.
The American market is an overwhelmingly commercialised system that is, for
the most part, privately owned, locally licensed and highly networked. Public
broadcasting came to the USA only in the 1960s. Contrast this with Europe
where a TV ‘market’ was non-existent (except in Luxembourg) until quite re-
28
cently. Until the mid to late 1980s broadcasting (also in radio) was organised
as a PSB monopoly in most of Western Europe and as state broadcasting in
the former Soviet countries – as well as those under dictatorships in the West.
Today, the European media system is a competitive market featuring a dual
structure, and in that alone still provides a stark contrast with the rest of the
world. How media markets are organised, managed, mandated and operated
differs in ways that are fundamental (for example license fee funding versus
advertising revenue) and proportionate (for example how many channels can
be funded by the available resource base). To assume that one policy fits all,
or one model is suitable everywhere, is simple minded.
Contextual history must also be kept in mind when discussing what broad-
casting means and how it is organised in different countries. In the early
days of radio no one was sure how to regard its potential (Barnouw 1966).
Economic and social conditions in Europe encouraged a public service orien-
tation and television was built on the foundation earlier laid in radio. In just
the same way American TV was built on the foundation laid in radio there,
and with very different systemic properties. The expense later involved with
launching TV in Europe accounts in part for early development in European
commercial broadcasting (in the UK and Finland in the mid-1950s). This is
not to imply that developing television was easy even for the companies that
were experienced in radio. It required significant investments in new technol-
ogy and building bigger and more complex facilities, developing new skills
and talents (for example set design and lighting), and the reorganisation of
company structures and routines. But television everywhere enjoyed a ‘path
dependency’ in that it was mainly built on the chassis of existent systems in
terms of production (companies), reception (audiences) and in methods for
its financing.
Similarly, and more or less everywhere in the early days, governments were
unsure how to regard the potential of radio. There was great interest in its
potential social impact and effects, for good and ill. Contextual factors played
a significant role in channelling regulatory and systemic preferences – in de-
termining the path that would account for dependencies. The rise of fascism
in the West and communism in the East, both of which featured imperial de-
signs, encouraged European policy-makers to consider radio broadcasting too
influential to treat as an ordinary consumer good. Americans essentially agreed
that radio had an extraordinary capacity for shaping social life and percep-
tions, but given characteristic distrust for government control they thought it
better to assign radio to the private sector. Thus, contradictory trends account
for different orientations, but indicate as well that social, political and cultural
tensions everywhere played a decisive role in the determination of systems,
arrangements and relations. Decisions taken have never only been practical,
but always also ideological (see the chapter by Jackson et al).
29
Systemic, contextual, unique, commodified and variable

There are important understandings about broadcasting that thread through
the chapters that follow, even when not always treated explicitly. First, we all
agree that broadcasting must be understood in systemic terms. Broadcasting
is, above all, a mass medium and it has social affects. Second, we all agree
that how it has been organised and for which essential purposes are contex-
tual. There is little practical value in treating broadcasting as though it were
somehow independent either from the larger industrial context and co-related
infrastructure, or from the socio-cultural context that accounts for how its roles
and functions are defined. The systemic character of broadcasting explains
important commonalities, especially economies of scale and sunk costs, while
contextual features explain much of the variability and even peculiarities in
comparative cases.
Third, we all agree that broadcasting is in crucial respects a unique industry.
Of course there is much that is not unique. Broadcasting is a professionalised
practice producing goods for markets, and every company must decide how
to invest limited resources to at least maintain and also hopefully grow market
share. Broadcasting is an increasingly globalized industry with transnational
conglomerates impacting how things are done, and what is made available,
more or less everywhere. In many respects broadcasting is no different from
any other industry, and certainly its management and operation have much in
common with other media industries. But that is only half the story and not
always the most important half. Broadcasting is unique in being among the
handful of industries that typically enjoy constitutional protections in democratic
states. Moreover, broadcasting is subject to licensing agreements, typically for
restricted periods that require review and renewal, because it is entrusted with
social obligations that are considered important at the broadest levels – often
as a ‘universal’ right for citizens. A TV programme is not a toaster.
Moreover, it has long been understood that broadcasting has great potential
for social and cultural impact – that mediated effects are associated with con-
suming its products. Even though causality is difficult to prove, few would argue
that television content doesn’t shape perspectives and shade perceptions. Until
the 1980s it was generally agreed that broadcasting has social responsibilities
as a result, even in the United States where regulatory policy had long held
that broadcasting should serve “the public interest, convenience and neces-
sity” – a requirement that was dumped during the Reagan presidency where
faith in “the magic of the marketplace” became the new orthodoxy. In Europe
the social responsibility requirements for broadcasting continue for the public
service sector, but are much weaker and more variable for the private com-
mercial sector. This hints at a fourth aspect we all agree on: how broadcasting
is organised, handled and mandated is at least as variable as it is uniform.
30
Finally, everyone agrees that wherever television has a commercial role and
its programming functions as a commodity. This is determinant in establishing
the way programmes are conceptualised, prioritised, produced, distributed and
consumed, as a factor of how programming is financed (Lowe 2009). The cost
of producing and distributing a programme is independent of the number of
viewers that watch it. Holding geography constant, this means that it costs as
much to broadcast to five million, five thousand or five. But of course the size
of viewership has a direct bearing on per capita costs, and thus on systemic
potential. There is less revenue available from five people than five million. The
number of viewers establishes market parameters that are decisive for calculating
the profit potential of programmes as commodities, which in turn has a decisive
bearing on what is produced, and how much (see the chapter by Trappel).
These features collectively challenge the ambitions of smaller countries in
producing domestic programming. Taken together with the historic argument
of market failure for public goods, it’s clear why states intervene in media
markets – especially smaller states. Not doing so results in forms of distortion
that are less often recognised and discussed than market distortion today. It is
arguably the case that smaller states must take approaches to regulating and
legislating TV markets that are quite different from their larger counterparts –
even in some ways oppositional to how things are done in bigger countries or
wealthier economies (see the chapter by Christian Berg).
Degrees of Vulnerability and Dependency

Size is of central importance to a useful understanding of how conditions and
structures differ between countries. One of the most important size factors
distinguishing most smaller countries, if not all, is the degree to which it is
vulnerable, as well as dependent, on other countries as a function of popula-
tion size, and that as a key determinant of market size (the other being gross
domestic product, i.e. the general economic condition).
Assessing the literature in both general studies about small states and the
work related specifically to media, five factors have the strongest influence
in distinguishing media arrangements in bigger versus smaller countries: a)
Vulnerability, b) Dependency, c) Adaption, d) Competitiveness and e) Cohe-
sion4 (Azar 1975; Alapuro 1985; Alesina & Spolaore 1997, 2003 & 2005, with
Wacziarg 2004; Katzenstein 1985). Our specific interest in this volume lies in
an effort to cultivate better understandings of how and why smaller countries
are different in comparison with bigger countries, and by implication why big-
ger countries may not furnish appropriate models for smaller countries. The
4. An imprecise term, but generally alluding to conditions of homogeneity or heterogeneity that are important
for maintaining that degree of unity that is necessary for peace and prosperity, while also respecting the
value of diversity.
31
two factors of particular importance with regard to the subject of this book are
vulnerability and dependency because these relate directly to market size and
resource limitations (Trappel & Meier 1992; Puppis 2009).
We have some problems with the semantic implications because both of
these terms have a negative orientation in the sense that few today would
consider being vulnerable a positive thing, and dependence is associated with
addictions. We debated using other terms, for example ‘permeability’ and ‘ac-
commodation’. In the end we decided to continue with the commonly used
for the sake of clarity as a function of familiarity and because these terms are
used by the authors.
Smaller countries have smaller markets but, as mentioned earlier, the costs
for operation and programming tend to be as high as in bigger countries (less
the number of operators, obviously, and also depending on the volume of origi-
nal versus imported programming). There are less people to pay for broadcast
services and so the cost per capita can only be higher. This condition poses a
unique dilemma for smaller countries. On the one hand smaller countries must
be more flexible and adapt to international conditions, while on the other they
must be more steadfast in the will to support domestic production.
Smaller markets only rarely determine the tide of affairs. They are most of-
ten on the ‘receiving end’ of international pressures. So they must adapt even
while resisting pressures to adopt. They are compelled to tailor responses to
supranational trends in policy or transitional forms of incorporation, especially
conglomeration. Accommodation very often requires striking a balance between
competitive fairness to address international requirements and operational neces-
sities to contextualise for domestic conditions. If a smaller country isn’t able to
adjust to broad trends it risks undermining its own international competitiveness,
but if rendered unable to support domestic interests it risks much more than that.
Large markets are better able to withstand international pressures, indeed
they are positioned in many cases to have direct influence on what becomes an
international pressure in the first place. They are not invulnerable, but certainly
far less vulnerable to external pressures and shocks (Katzenstein 1985; Jensen
& Campbell 2006). Bigger countries with large markets are more often the
source rather than the recipient of international content in media. It has long
been noted that American television and radio channels feature small amounts
of programming originating elsewhere, and that what is broadcast from abroad
is mainly from other English-speaking countries. It will be interesting to see if
growth in programming from Latin America may change the pattern given the
growing Spanish-language minority that is positioned to become a majority in
the future (Reshaping Politics 2010).
The twin characteristics of higher vulnerability and dependency can be traced
to 1) lack of self-sufficiency in media content provision and 2) adherence to
an open economy. The same does not apply in smaller countries with closed
32
economies. State intervention via regulation of media markets is justified on

grounds that are usually some mixture of media’s centrality today in the provi-
sion of services considered crucial to a society’s cultural, social and democratic
functions, and therefore as a variety of ‘self-defence’ to correct market failures
How to understand ‘content’

In market terms, broadcast content are public goods. This means they are
non-rival in consumption and, when free-to-air, non-excludable. One person’s
use of some content does not limit another person’s use of the same content.
Thus, media content is not ‘consumed’ as that notion is generally understood
because its use is not depleted – in fact ‘network effects’ can mean that it grows
value the more widely and often it used (accessed, viewed, read, heard, etc).
The problem from a small market perspective is that the cost for first-copy
production is the same as in large markets, but without the same potential for
the rate of returns-to-scale enjoyed there because the population is smaller.
Electronic media content, as with many other types of media content including
books and films, are characterised by increasing return to scale as a function
of market size in space or time, or both. Thus, a programme (or series) may
produce increasing profits by reaching more people across space at the time
of broadcast (via higher revenues from advertising or subscription, or both), or
by reaching more people over time (via syndication and windowing strategies).
The characteristic difficulty with electronic media content, in fact with nearly
all media content, is that margin can’t be guaranteed. These are typically ‘hit
industries’ where one or two blockbusters not only cover the losses incurred
by many failures, but account for the lion’s share of profits. Like book publish-
ing, cinema and recording industries, TV is based on economies of failure. The
costs for making professional broadcast content have high sunk costs (there-
fore not including homemade content broadcast via YouTube and the like).
A broadcasting company in a larger market with a turnover of several billion
euros obviously has far greater capacity to produce many drama series that
can create at least one hit than a broadcasting company in a smaller market
with a turnover of several million euros, which may be able to produce only
a handful when all the other genres must also be produced concurrently. Of
course one must also account for the fact that the cost for production tends to
be greater in bigger markets due to more competition for scarce resource and
with higher stakes. An example might be helpful.
When Christian Nissen (the third author of this chapter) was Director General
of DR, the cost to acquire broadcasting rights for one hour of the American
series Beverly Hills 90210 was roughly $14,000 USD. Compare this with the
cost to produce one hour of domestic Danish drama at a similar level of prod-
uct quality: $550,000 USD, roughly 40 times higher. Although the example is
33
dated, the practice is as true today; if anything the cost differential can be even
higher as a function of rising prices due to increasing scarcity of content given
growth in the number of channels and hours of broadcasting to be filled. The
point, however, is that the cost to produce a programme or series is all in the
first copy. The revenues from international sales is “new money” on top of
whatever is generated in the domestic market, and often used to finance new
production. But for a Scandinavian series produced in the national language
of one home market, international sales are obviously very limited and even
when possible would only cover a fraction of the costs.
Because audiovisual products are not only economic goods but also cultural
products, their export market varies considerably. Smaller countries suffer much
higher limitations on average, with the exception of those that have been able
to successfully specialise in formats where the concept is sold for reproduction
with versioning to fit the local context (e.g. Endemol). Bigger countries enjoy
a two-fold advantage: they have the capacity to produce a higher volume of
original production, and they have a larger market in which to sell it – in many
cases also enormous, even global, secondary international markets. All of this
explains why it is important to accommodate differences in public expenditure on
broadcast media as a function of size in view of available revenue. Purism in free
market philosophy does neither science nor society fair service in these matters.
Smaller countries tend to be smaller markets and cannot support as many
companies. This accounts for higher concentration in smaller markets, which
can again legitimate increased levels of regulatory intervention. Without that
it can easily be the case that conglomerated companies with broader markets,
deeper pockets, and greater inventory could inundate a small country market.
Of course high quality programming is costly wherever it is produced,
and by whichever company. And guarantees of quality are no guarantee of
profitability. Bigger market companies nonetheless have greater opportunities
to spread costs, lower risks, and increase revenue streams. This happens in
part internally when a company can produce more products and expect that
at least one will be a hit, and also because foreign direct investment is more
likely for bigger market firms. This is not to imply that business is easier for
bigger market firms. Although market size might be larger and total resource
availability higher, this typically also entails more competitors fighting for share.
Business is not necessarily easier, but it is different – and that is the central
point we are driving at here.
Implications of language
As briefly noted, smaller markets have lower potential to attract commercial
funding than bigger markets, especially when broadcasting in smaller countries
accommodates a distinctive national language. Production of programming for
34
a minority audience in a specific language and cultural setting, whether a mi-

nority internally or in comparative global terms, is proportionately higher due
to less variable sunk costs. It also very often attracts little investment interest
because returns-to-scale are marginal at best. At worst, the costs can never be
recouped. The practical problem is compounded when larger market sources,
particularly America’s robust industries, are able to offer popular program-
ming with high technical quality at significantly lower prices than the cost of
own-production or co-production. This was illustrated in the example earlier.
International after-broadcast markets are the sauce on the pudding for those
firms. This potential is strongly keyed to English as “the language of interna-
tional advantage” (Collins 1990).
Commercial firms will not produce certain goods whenever the market is
too small to generate profits, which is very often the case when dealing with
minority language markets for media – regardless of the type of content (see
the chapter by Moring and Godenhjelm). This was recognised in the 2001 EC
Communication on State Aid for PSB: “Smaller member states may have to collect
the necessary funds, if costs of the public service are, ceteris paribus higher …
similar difficulties may also be encountered when public service broadcasting
is addressed to linguistic minorities or to local needs”.5 Size has policy implica-
tions in broadcasting. Market concentration is a particular difficulty for smaller
markets where domestic capacity can only sustain a few competitors. There is
a certain threshold of required investment to get involved in production, which
is a crucial factor in barriers to entry (Albarran 2002; Gal 2003; Hoshkins et al
2004; Knee et al 2009). Market size is a factor in market strength, and language
is an important variable in determining total market size for media content.
The way small countries react to dependency relations differs, depending
on historic traditions, prevailing values and contemporary conditions (Hallin
2009). Smaller countries with large same-language neighbours are a special
case as they are not able to use all the strategies employed by smaller countries
with different-language neighbours. Thus, smaller countries under relatively
bounded minority language conditions have been able to better guarantee,
to a reasonable degree, domestic production in electronic media markets
through a combination of language and regulatory measures. This has certainly
been the case in the Nordic region (Lund & Berg 2009). When studying share
for countries with same-language large neighbours like Austria, Ireland and
Switzerland we find indications of a much higher degree of foreign television
penetration. To take another example, the smaller countries in Eastern Europe
that share Slavic languages tend to have higher rates of foreign TV penetration.
5. A similar wording is also in the draft for the 2009 Communication on Broadcasting in Article 42: “The Com-
mission will also take into account the difficulty some smaller Member States may have to collect the neces-
sary funds, if costs per inhabitant of the public service are, ceteris paribus, higher while equally considering
potential concerns of other media in these Member States”. The addition of the later clause is a significant
acknowledgement of the economic interests of commercial operators.
35
Smaller countries in shared-language areas thus face unique challenges due to

cross-border audiences and viewing patterns. This makes different strategies
necessary than in less vulnerable nations6, especially when the public service
sector in these countries depend in part on advertisement revenue.7
Clarifying the variables

Testing for patterns begins with clarifying the variables used to measure the
dynamics of whatever is being scrutinised. In our case the patterns we are after
are mainly co-relations rather than causal factors. The result of mass media
research over decades consistently demonstrates that effects are strongly con-
ditional and highly varied. There is too much complexity in social systems, and
the diverse participations of media, to be certain about causality. In this book
we identify three variables related to size that we find most relevant both for
explaining patterns of similarity and accounting for differences when assessing
how broadcasting is organised and operated across countries:
I. Total population. The total population of a country establishes the scope
of its media market in the most comprehensive terms. This, in turn, has
direct implications regarding the scale of available funding, however that is
acquired – e.g. from license fees by individuals or households, advertising
revenue, or various forms of subscription (monthly, pay-per-view, etc).
That, in turn, has a strong bearing on the size and prosperity of media
industries as a function of the volume of what can be produced and on
what basis. In the analyses offered in this volume, total population has
been selected as the primary independent variable. To provide a common
reference, the categorical divide was set at 20 million inhabitants as the
upper limit for smallness.
II. General economic conditions. These conditions largely determine the
volume of revenues available for broadcasting production and distribution.
The importance of this has become glaringly evident since 2008 when
economic recession caused steep declines in advertising revenue and
6. There is no lack in foreign channels penetrating every media market in Western societies, and many others
besides. Even a cursory examination of the MAVISE database from European Audiovisual Observatory shows
this clearly. It applies as much to bigger as smaller country markets, when judged relatively. The difference
is in the choices that respective audiences have regarding the volume and character of domestic provision
and the relative impact of foreign channel offerings. In small country media markets the number of domestic
channels is far less, and the number of foreign channels much higher.
7. Dependence on advertisement revenue for PSB firms has both beneficial and adverse effects. It does help
establish the advertising market and is good for marketing on the whole. But when undertaken, PSB opera-
tors risk crowding out private commercial operators, a cause of cumulative complaints filed with regulatory
authorities. Although companies giving up that revenue stream risk increasing the resources available to
their foreign media competitors in domestic markets, we think the non-commercial profile is still the best
option for securing the social legitimacy of the public service sector and encouraging fair practice in a dual
market structure.
36
consumer expenditures. The general economic conditions of a country,

even in the best of times, has a decisive role in determining the kinds
of programming a broadcaster is able to provide, both in quality and
quantity, how much of which genres are produced in-house and bought
externally, how much co-production is necessary, how many channels
and of what kinds can be offered, and on what basis, and how prosper-
ous broadcasting can be as an industry. In this book, general economic
conditions comprise the secondary independent variable.
III. Television market. Because this book mainly focuses on television, TV
market size is our primary dependent variable. This is an especially im-
portant consideration regarding the distinctive features and dynamics of
television broadcasting in comparative terms.
These three variables form the general ‘equation’ underlying the studies in this
volume. We argue that the character of domestic media markets (their size, the
players and their business models, the public involvement/intervention and so
forth) are dependent – to an important extend – on the size of the countries
(populations) and their general economic conditions. There are distinctions,
however, in respective chapters:
i. The “primary independent variable” (population size) is used as the basic
tool to identify smaller countries. But as discussed in a following section
and in several of the chapters, a number of cases make it necessary to
take into account additional parameters including, especially, national
minorities and language communities. The chapter by Moring and Goden-
hjelm is especially pertintent. Also the relative aspect of population size
must be remembered. A country like Canada is big compared with the
Netherlands but can also be considered small in a television environment
when compared with its US neighbour.
ii. The “secondary independent variable” (general economic conditions) can
be understood as a necessary parameter because it facilitates differentiat-
ing between rich and poor countries, which is imperative for explaining
what’s happening in a particular marketplace. Depending on the focused
area of study, it can likewise be necessary to consider other independ-
ent variables (in whatever order). If for instance public intervention is
the subject (i.e. an element of the dependent variables) one will have to
consider the character of the political system, its maturity, historic back-
ground, traditions and distinctive ways of working. The chapters by Erik
Nordahl Svendsen and by John Jackson and his colleagues are pertinent.
iii. The “primary dependent variable” (television market) needed to be de-
veloped further in some cases. Due to the growing internationalisation
of the television industry – both in terms of ownership and distribution
37
of channels, programmes and formats – media markets are no longer

as directly related to country of origin. Although the size of home mar-
kets still plays a very significant role, their penetration by companies in
neighbouring countries or as transnational operators is by now keenly
important. These considerations are especially important in the chapter
by Annette Hill and Jeanette Steemers.
Although we have worked as editors, and indeed as a group, to establish pa-
rameters that are pertinent to everyone and should create the unity necessary
to arrive at something more useful than separate case study contributions, we
have accepted that each treatment merits the latitude necessary to treat the as-
signed topic usefully. There is diversity as well as unity in the way supplemental
variables are used by contributors. Each contributor was asked to focus on
some particular aspect of the size condition as a composite of factors. In each
case, the focus of analysis determines the factors of essential importance, and
these are understandably not always uniform across contributions.
Selected methodology also varies, for similar reasons. Some contributors rely
mainly on quantitative data and statistics, while others rely mainly on qualitative
data with interviews. The editors took a flexible position here, as well, encour-
aging each author or group of co-authors to use the best data available for their
area of research focus, and to apply the best standards of scholarly rigour in
methods and analyses.
Why and how size matters in television broadcasting

Size clearly does matter and in many ways when assessing the conditions,
dynamics and needs for broadcasting systems in smaller countries with smaller
populations and markets compared with bigger countries with bigger popu-
lations and markets. Size matters especially with regard to externalities, in
economic terms. The literature is clear on this matter and evidence examined
in the chapters that follow confirms this.
This book argues that the conditions for securing domestic provision in
broadcast services are different in smaller and bigger countries. Table 1 sum-
marises aspects of key importance addressed in this chapter, and contextualises
the chapters that follow.
To summarise, it is clear that countries with smaller populations have less
overall resource available for broadcasting and higher per capita production
costs. It is also clear, with limited exceptions mainly for English-speaking coun-
tries, that revenue streams are smaller both for domestic sales and international
trade in media goods. Furthermore, smaller countries have more problems
guaranteeing the supply of domestic production. A primary problem is the
smaller universe comprising the domestic industry. Bigger market countries
38
Table 1. Comparing bigger and smaller countries
Bigger country Potential effect of size Smaller country
Trade High Degree of self-sufficiency Low

Low Dependence on international High
trade in media products
Weight in international policy Low

International High deliberations relevant to me- (Problems in capability to
Influence dia, e.g. trade issues in WTO, resist pressures to open do-
GATT, etc mestic AV-markets)
Capacity to influence or Lower

offset effects from interna-
tional political and econo-
External shocks Greater mic fluctuations, and thus
resistance to external shocks
and capacity to influence the
development of solutions.
Potential to benefit from eco- Lower

nomics of scale influencing (being limited by smaller
Economies of Higher per capita costs in media audiences and advertising
scale production. markets). Revenues flowing to
Potential for exporting media foreign media companies
goods
Degree of diversity due to Lower

market size, total revenues, (The main concerns are
and potential for return-on- not diversity in programmes
Diversity Higher investment (ROI), and thus overall, but rather in domestic
new investment in media productions).
markets, especially when
lightly regulated.
Competitiveness in TV Lower
Competition Higher markets and potential for (Higher industry concentra-
profitable niche channels, tion and greater difficulty in
especially in pay-TV. overcoming entry barriers.
More often keenly targeted
by foreign channels as part
of some regional market for
them (e.g. the Scandinavian
market).
Potential for provisioning Lower

Public goods Higher public goods efficiently due (with higher per capita costs
to total resource base. due to high fixed costs for TV
provision)
not only have the capacity to produce far more, they also have greater pos-
sibilities that the commercial market will produce informational and cultural
programmes even for minority audiences because those are sizeable in abso-
lute terms when compared with the audience available for such products and
services in smaller market countries. Because TV has a voracious appetite this
39
means smaller country markets typically feature higher proportions of imported

goods. Thus, smaller countries often must secure domestic programming by
subsidising the industry in content production.
Smaller countries also have far less potential to influence what happens
internationally and must more often adapt their markets and policies to cope
with international influences. This creates particular problems keyed to higher
dependency and vulnerability, which encourage different strategies for coping
with such influences. Smaller countries with free market economies are espe-
cially vulnerable to foreign penetration by media content, and also in owner-
ship. They must more finely balance commitments to free market economics
and domestic cultural, social and political needs. This explains why smaller
countries have higher interest in, indeed greater need for, regulation of media
markets. Of course this need is not exclusive to smaller markets, or even to
media. As Eric Lonergan recently observed (2009: 45): “It is obvious that markets
only function to serve us well if there is a well-planned framework in which
they operate, and in many circumstances of human organisation markets are
inappropriate and their effects detrimental”.
Smaller markets will often require more rigorous enforcement measures
because market failure is a proportionately higher potential risk, and its con-
sequences proportionately higher as well, due to the more limited number of
domestic competitors and resources (of all kinds, but especially in revenue
and audiences). Bigger countries and markets have far greater latitude for
deregulation because the potential for detrimental results are proportionately
much lower – although never absent entirely.
Smaller markets also face problems in the adequate provision of diversity,
not necessarily in terms of channels (which tend to be high everywhere due to
satellite and cable delivery of foreign programming), but in terms of domestic
programme supply. Smaller markets almost always require subsidies to guar-
antee adequate provision of broadcast content that is domestically produced
and proportionately fair in distribution of services for the population, not only
as a whole but also in its several parts.
Smaller countries may also face economic problems in media as a function of
speaking minority languages in global market terms. This sword has two edges,
one that is beneficial in the potential of a unique language to mediate against
excessive influences from foreign content in media, especially when properly
regulated. On the other hand a smaller country will often have difficulty (or
impossibility, really) to produce higher quality content across genres and at a
sufficient volume to satisfy domestic demand. This language issue is especially
important when considering smaller countries that border bigger countries
sharing a common language. They clearly risk being a secondary market for
their large neighbours’ media activities, with all the expected concerns, fears
and realities with regard to weakening domestic cultures. That is perhaps over-
40
stated in many cases given that domestic cultures in general show a strength
and depth that flies in the face of this. But it is certainly not overstated with
regard to weakening domestic audiovisual culture, which is today an essential
dimension of any shared social condition.
On the whole and overall, we have concluded that the differences between
television broadcasting in bigger and smaller countries are significant. That is
evident when assessing general market conditions, the operational environment
of television systems, that status of other media corporations in their strategic
designs and operations, policies preferred by governments and regulators in
markets of varying size, and in the supply characteristics of programme content
on TV screens. At the same time, it should clear that investigation reveals a fas-
cinating picture of true complexity and great diversity in comparisons of bigger
and smaller countries, as well as between smaller countries and across diverse
regions. It is not possible to draw any clean, crisp lines. That is precisely why
policy makers are needed in the first place. If it could all be handled on some
automated basis there would be no need for human judgment. We hope the
contents of this volume suggest dimensions of essential importance for making
wise judgments, the quality of which will be seen in policy designs. This book
will have done useful service if readers concur in the end that size matters for
TV broadcasting policy because one size does not fit all cases.
41
Appendix 1.
Three categories of countries listed by their populations in millions
Some micro countries < 0,2 mio.
Vatican 0,001 Liechtenstein 0,033 Ile of Man 0,08

Gibraltar 0,003 Monaco 0,034 Andorra 0,1
San Marino 0,03
Some smaller countries > 0,3 < 20 mio.
Iceland 0,3 Lithuania 3,4 Switzerland 7,4

Malta 0,4 Bosnia- Herzegovina 3,9 Bulgaria 7,8
Luxembourg 0,5 Ireland 4,1 Austria 8,1
Montenegro 0,7 Moldova 4,2 Azerbaijan 8,3
Cyprus 0,8 New Zealand 4,2 Sweden 9,0
Estonia 1,3 Croatia 4,4 Belarus 9,8
Macedonia 2,0 Georgia 4,5 Serbia 10,0
Slovenia 2,0 Norway 4,6 Hungary 10,1
Kosovo/UNMIK 2,1 Finland 5,2 Czech republic 10,2
Latvia 2,3 Denmark 5,4 Belgium 10,4
Albania 3,2 Slovakia 5,4 Portugal 10,5
Armenia 3,2 Israel 6,8 Greece 11,0
Netherlands 16,3
Some larger countries > 20 mio.
Australia 21,3 Ukraine 47,4 Germany 82,6

Romania 21,7 Italy 57,8 Japan 127,7
Canada 31,9 United Kingdom 59,7 Mexico 107,7
Poland 38,2 France 60,0 Russian federation 144,1
Spain 42,5 Turkey 71,3 USA 304,5
Note: The numbers of population size should be qualified/updated for instance by checking in the CIA World Fact-
book, see: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html listing 237 countries.
42
Broadcast Economics, Challenges of Scale,
and Country Size
Robert G. Picard
This chapter explores the relationship between country size and the econom-
ics of broadcasting. It reveals why issues of scale create different conditions
for broadcasters and how these affect the structures, operations, and costs
of broadcasting. Based on a study of 31 European countries, it demonstrates
how a variety of factors are connected, and why size influences the type of
broadcasting system and content available in a given country. These factors
include: population size, financial resources, market structures, and content
and services provision.
The very term ‘broadcasting’ integrates the concept of size with the idea
of communicating to a large (broad) audience. It is by nature a mass medium
designed to reach aggregated audiences on a mass scale. Because it does not
involve distribution of a physical product the cost structures of broadcasting
– that is, the costs incurred and their significance to overall operations in a
firm or industry (see Picard 2010) – produce savings that are not possible for
other media such as newspapers, magazines, books, CDs, and DVDs. The cost
structures of broadcasting create efficiencies that are directly related to scale
This book is concerned with differences that broadcasters encounter as a
function of size in two aspects: 1) the total audience available in sheer numbers
at the nation-state level, and 2) the size of a country’s economy. This signals
the importance of studying broadcasting economics as a fundamental determi-
nant of systems and their characteristic dynamics. This chapter addresses that.
The conceptual foundation of broadcasting as a mass medium with advan-
tages cost structures and a unique economic basis, and the operational require-
ments for effective broadcasting, are central issues and raise important questions
about whether there are threshold requirements to realise certain benefits from
broadcasting. This chapter seeks to provide useful answers by focusing empiri-
cal investigation to determine whether there are significant differences between
smaller and larger countries that affect the kinds of broadcasting services they
provide and the scope and nature of those services.
43
Robert G. Picard
We begin with the premise that the size of the “mass” that broadcasting can
serve matters to the possibilities for broadcasting as a system. If the mass is
large then the per capita costs for providing services will be lower than if the
mass is small. This is why scale is so important to establishing the medium
in operational and systemic terms. Broadcasters in large countries are able to
achieve economies of scale in broadcast operations that aren’t possible for
smaller countries because they have more people, and hence bigger audiences
overall. They often also have more financial resources (e.g. Germany and the UK
in Europe). Smaller countries can’t typically support as many domestic public
service or commercial broadcast channels (both in radio and television), usually
have less local and regional broadcasting stations, fewer television producers,
and less domestic programming. Country size is the central issue treated in this
book because of presumed effects of scale on the content of broadcasting, and
in determining the structures and financial resource availability for broadcasting.
Measures of country size

In considering size in broadcasting, the first issue that must be addressed is
whether the concept of size is used as a descriptor or as a variable. When
used as a variable it is primarily for investigation that relies on positivistic so-
cial science measurements (i.e.. statistical analysis); when used as a definition,
it is mainly to partition cases by creating mutually exclusive categories (i.e.
each case fits in only one category). In this chapter we use size as a variable
and conduct statistical analysis to determine what is and is not significant in
comparative terms.
As discussed in the introductory chapter, determinations of country size
are made for a variety of purposes and definitions vary widely. This occurs
because size may or may not be a relevant indicator for a particular study and
because the impact of population size does vary, depending upon the issue
being considered. Population size is not directly related to wealth, for example.
Countries such as Brunei, Kuwait, and United Arab Emirates are small but among
the wealthiest in the world today. On the other hand, and importantly for this
book, the size of a country certainly affects its media capability, capacity, and
possibilities. Smaller countries typically have fewer media firms, a more limited
range of media types, and less domestic content production than larger ones.
This occurs because of economic factors inherent in media operation that create
thresholds of size required to effectively support print, broadcast, and other
media activities. The issue of thresholds is fundamental to the issues treated in
this book and is explicitly examined in the research reported in this chapter.
This raises two questions of signal importance: 1) what is small?; and 2)
what measure is employed to determine size? These are important questions
44
Broadcast Economics, Challenges of Scale, and Country Size
because a nation’s size can be measured in many ways, three of which are
most common – geographical area, population volume, or economic activity.
Geographic size
What constitutes a small country in geographic terms is in fact disputed. Coun-
tries range in size from the Vatican City at 0.2 square miles to Russia at 6.6
million square miles. In statistical analyses, some geographers consider small
to be any country falling below the median while others prefer to classify a
country as small if it is at least one standard deviation below the mean. In
general, countries are considered microstates if their geographic area is less
than 200 square miles.
Although complicated and actually rather fascinating, in considering issues
related to broadcasting services geographic area can’t be treated as a primary
indicator because it is not related to the critical mass needed to support
broadcasting enterprises. Australia, for instance, is geographically much larger
than Germany (slightly less than the size of the America’s ‘Lower 48’ states
combined), but supports far fewer broadcasting enterprises. Within Europe,
countries such as Sweden and Finland are relatively large in terms of surface
area but their broadcasting industries are constrained by population sizes.
Large countries in geographic terms, such as France, Germany, and Spain,
have large broadcasting industries with many operators that provide nation-
wide service and many others providing more discrete services for specific
regions and municipalities.
Of course geographic area does have effects on broadcasting. The territory
affects costs via the size and complexity of the necessary transmission infra-
structure to serve the country as a whole and in respective localities, however
defined. Moreover, geography also affects costs because it is more difficult and
expensive to serve highly mountainous territories than relatively flat territories
because more transmitters and repeaters are necessary maintain signal integrity
that is easily blocked by natural obstructions (mountains, peaks and ridges).
Finally, services to large territories with low population density certainly increase
the cost per viewer. It is cheaper to serve urban audiences because population
density creates advantages cost thresholds. This is everywhere evident in the
fact that there are far more channels in big cities and conurbation areas than
in rural areas or the ‘outback’ of a large territory.
Population size
The ability of countries (as well as regions and municipalities) to support
broadcasting industries is related to population because the costs of service and
economies of scale provide advantages to countries with larger populations.
45
Robert G. Picard
Worldwide, countries range in population size from 783 in Vatican City to

1.3 billion in China (United Nations 2005). Definitions of what constitutes a
small country based on population also vary; again, there is no standard or
generally accepted level. As with the earlier arena of study, some demogra-
phers consider small to be any country below the median while others prefer
to classify a country as small if it is at least one standard deviation below the
mean. Still others use cut off points created and justified for specific purposes.
In media analyses, small countries are often considered as those with
populations below 20 million because of critical mass requirements for effec-
tive operation. The 2009 study on media pluralism for the European Commis-
sion used 20 million inhabitants as the dividing line between large and small
countries (European Commission 2009). A recent review of media regulation
in small European states used a figure of 18 million population as the cut off
– which appears to be based on where a statistical gap appears in population
figures for EU member states (Puppis 2009). Given that our analyses in this
book are focused on media, we decided to use 20 million as our dividing line
in determining what counts as a small country.
All things being equal, larger population countries would be expected to
offer more broadcasting channels and hours of programming than smaller
countries. In the real world, however, the wealth of a country also plays a role
in the provision of services.
Economic size
Because media require financial resources, countries with larger economies
should be able to support more media operators and channels. This factor
has a determinant role in the financing of broadcasting and affects the scope
of resources available for both public service and commercial broadcasting.
The traditional measure of economic output is gross domestic product [GDP].
Worldwide and calculated in U.S. dollars, this figure ranges from $10 million in
Tuvalu (an island in Pacific Polynesia) to $14 trillion in the United States (United
States Central Intelligence Agency 2008). Most use the mean as the dividing line
between large and small countries. When making direct comparisons among
countries, economists typically prefer to use either GDP per capita or GDP
per capita adjusted for purchasing power parity (especially when comparing
countries with widely disparate economies). In 2008 the GDP per capita in
the 27 countries comprising the European Union was €23,500 (Eurostat 2008
Yearbook). For analysis within the EU, we can thus consider those below that
average as having lower GDP and those above as having higher GDP.
All things being equal one would expect wealthier nations to have more
resources to devote to providing and acquiring broadcasting services. However,
because population is a factor in domestic production, one would expect that
46
small countries, even wealthy ones, would face constraints on services produced.
Thus it was clear from the outset that analyses for this book would need to use
both population and wealth for assessing the impact of size on TV broadcasting.
Implications of economic characteristics

As noted in the beginning of this chapter, to address the question of whether
domestic size matters in broadcasting will require attending to the economic
characteristics of broadcasting as a medium, and how that is affected by scale.
Cost characteristics of the industry include moderate fixed costs – that is,
costs that do not change in the short-term regardless of the amount of product
that is produced. For broadcasters the fixed costs include facilities, equipment,
infrastructure costs, personnel and operating costs necessary to maintain basic
operations – and high programme production costs (Noll, Peck and McGowan
1973; Owen, Beebe and Manning Jr. 1974; Owen and Wildman 1992). TV has
open technology standards and supply, which results in equipment costs that
don’t vary significantly from country to country, except as scale of operations
increase (or as a function of taxation codes and rates). The costs for equipment
have long created strong financial pressures on broadcasters, and technology
development has required significant reinvestments in the past two decades
because of the conversion from analogue to digital production, the introduc-
tion of HDTV, and the requirement to build digital transmission infrastructure.
Cost forces and structures, along with available revenue, are determined
by the underlying economics of the industry (Picard 2010). In commercial
broadcasting the average revenue per viewer – the amount of money left
over after costs are covered, expressed in terms of the margin resulting from
each viewer or listener, is relatively stable regardless of audience size. But
the actual and average programme cost per viewer tends to rise as audience
size increases because more investment is needed in higher quality offerings
to attract audiences as more channels compete for attention. Large successful
channels create high barriers to entry, meaning it is hard for a newcomer to
unseat them because they already large audiences who may have attachments
to their programmes and experience with their channel, already tend to have
attractive programming, and enjoy better economies of scale. All of that gives
them competitive advantages over new entrant channels.
As everyone knows, competition in TV broadcasting has grown sharply
since the mid-1980s – especially in Europe after liberalisation took hold in
consequence of the Television without Frontiers directive. Today the market
characteristics of broadcasting include a high oversupply of channels and pro-
gramming. This oversupply is created by the combined availability of domestic
channels, foreign channels, and multiple transmission platforms (terrestrial,
47
Robert G. Picard
cable and satellite channels). This was not at all characteristic in the early days
of broadcasting when spectrum was a scarcity. The amount that could be used
for TV broadcasting was limited by both technological capability, but was also
restricted by governments who needed spectrum for other important functions
(especially defence applications). Before development and advances in alterna-
tive distribution systems there was no realistic possibility for the volume and
range of channels media consumers enjoy today.
In terms of hours of programming provided, by now no individual in any
competitive, mature media market can view all the hours provided by all the
operators – and increasingly not even a fraction of the total. The sheer volume
provided to choose from far exceeds the finite natural limit of 24-hours in a
day. Of course much of this additional programming is not original but rather
is syndicated, of foreign origination, and many channels feature a lot of repeat
programmes (especially themed channels).
Broadcasting is relatively unique because of non-rivalry in consumption. This
means that content use by one media consumer does not preclude its use by
others. There is also wide variance in the amount of consumption by day and
time of day. Individuals also vary in the amount of radio to which they listen
and the amount of television they view. All of these factors create unique cost
realities for broadcasters. Because costs for facilities, equipment, and operations
are relatively fixed, economies of scale in service are related to audience size.
The average cost for serving viewers (that is, cost per viewer) decreases as audi-
ence size rises and, crucially for this book, vice versa: costs per viewer increase
as population size decreases. An advantage for size occurs because there is no
marginal cost – that is, no additional extra cost per person – for serving a larger
number of viewers. Consequently, the cost is more or less the same whether
the programme is viewed by 1 million or by 1 viewer. The fixed and variable
costs remain essentially the same, thus making larger audiences more efficient.
As the number of broadcasters (and cable/satellite channels) increase, audi-
ences fragment and the average financial resources available to each broadcaster
in the market are reduced. This forces managers of broadcast enterprises to
control other costs. The three most controllable costs involve the number of
broadcast hours (total hours of broadcasting operations), the hours of pro-
gramme production (how much of the volume is originated content, which is
more expensive than importation), and genres of production (the costs vary for
different types of programmes, e.g. news versus drama). These understandably
become the focus of cost control and create incentives for broadcasters to rely
on externally syndicated production for much of their programming.
The consequences of these factors are 1) that a typical threshold level of
costs must be borne by the operator, whether broadcasters are serving smaller
or larger countries, and this is significant for operators in smaller countries be-
cause there are fewer potential listeners or viewers available; and 2) the average
48
cost for serving audiences will be higher in smaller than larger countries. Thus,
in terms of provision one should expect that countries with smaller popula-
tions or less financial resource availability will – on average – be expected to
broadcast fewer hours, produce less original programming, avoid expensive
genres, and acquire more syndicated programming from external producers.
As the number of broadcasters increase in a country, the average resources
available for programming each additional channel will decline, leading again
to reduced production of original programming by each operator and the
acquisition of more syndicated programming from other producers, as well as
the avoidance of expensive genres.
Because of these underlying economic and cost characteristics, managers of
broadcasting companies tend pursue strategies to maximise their audience in
terms of programme share at peak hours and in average daily share. Whenever
advertising revenue must be secured by broadcasters, whether commercial or
public service, there is need not only to maximise audience by day part but also
to maximise average income per viewer and average income per programme.
This encourages making programme choices that privilege serving those de-
mographic segments that are most attractive to advertisers. These strategies are
important because as audience size diminishes the benefits of scale diminishes
with it, and the average cost per viewer rises.
That is why one crucial benefit of licence fees and channel subscriptions is
the provision of relatively stable incomes that permit better financial planning
and programme cost allocation: the overall average income per viewer is fixed.
An exploration of size and broadcasting

Empirical study was undertaken to examine the extent to which the theoreti-
cal expectations and predictions discussed above are actual in the real world.
The rest of the chapter reports findings from this co-relation study comparing
smaller and larger countries across specified factors to generate useful insights
for understanding how broadcasting works in systemic terms. Factors included
in the study are:
• Population size
• Financial resources in GDP per capita
• Advertising expenditure per capita
• Number of public service and commercial radio and TV channels (market
structure)
• PSB radio and TV operating revenues
• Commercial television operating revenues
49
Robert G. Picard
• Content provision according to the hours of domestic TV production

• Audience shares for the top 4 TV firms and for the top 4 radio firms
Data for 31 European countries were available for study. The data were gath-
ered from three sources: Eurostat (2008), the World Advertising Research Centre
(WARC 2009), and the European Audiovisual Observatory (EAO 2009).
The study used population size and wealth as measures of size. The countries
ranged in population size from 320,543 for Iceland to 82 million for Germany.
Twenty-four countries were below the 20-million size threshold. GDP per capita
was measured in euros and ranged from €39,700 in Bulgaria to €174,900 in
Ireland, with an average of €94,312.
Financial resources available for broadcasting were measured by advertising
expenditures, licence fee revenue, total PSB revenue, and commercial television
revenue. Advertising expenditures per capita were measured in U.S. dollars and
ranged from $63.30 in Bulgaria to $528 in Norway, with an average of $241.
The television license fee ranged from €13 in Romania to €294 in Denmark.
Total PSB TV and radio revenue ranged from €26 million in Lithuania to €8,241
million in Germany, with an average of $1,258 million. Commercial television
operating revenues ranged from €28 million in Estonia to €4,208 million in
Germany, with an average of $886 million.
Market structure was measured by a concentration ratio keyed to the num-
ber of public and private channels. The concentration ratio was comprised of
the audience shares for the top 4 channels combined, and ranged from 50%
in the Netherlands to 86% in Malta and Portugal, with an average of 69%. The
number of nationwide public television channels ranged from 1 in Bulgaria to
21 in the United Kingdom, with an average of 5. The number of nationwide
private television channels ranged from 1 in Denmark and Ireland to 72 in
Italy, with an average of 11.
Content provision was measured by hours of broadcasting and percentage
of domestic production for entertainment programming. The hours of broad-
cast programming ranged from 3,724 in Norway to 62,761 in Germany, with
an average of 15,870. Domestic production was measured as a percentage of
feature films, TV films, short films, series, soaps and animation programming
produced in and for each country and ranged from 2% in Switzerland to 29%
in France, with an average of 11%.
The data were subjected to co-relation (correlation) analysis (Table 1) and
interpreted using the 5-level interpretative guide suggested by Guilford (1956:
145)1. Relationships with a score below .40, that is, those with only slight or
low co-relation were rejected.
In what follows we treat the findings for each factor in turn.
1. 1) < .20 = slight co-relation, almost negligible relationship; 2) .20 to .40 = low co-relation, definite but small
relationship; 3) .40 to .70 = moderate co-relation, substantial relationship; 4) .70 to .90 = high co-relation,
marked relationship; 5) > .90 = very high co-relation, very dependable relationship.
50
Table 1. Co-relation results
GDP Ad Expend. Aud. Share # Public # Private PSB Com. TV Hours % Domestic Licence
Population /capita /capita 4 Channels Channels Channels Revenues Revenues Programming Production Fee
Population 1
GDP per Capita 0,149710657 1
Advertising
Expenditures per
Capita 0,114842461 0,899522993 1
Audience Share
for top 4 Channels -0,205288707 -0,306009546 -0,325947279 1
# Nationwide Public
Terrestrial Channels 0,525137141 0,343198953 0,456876394 -0,143983379 1
# Nationwide Private
TV channels 0,625845423 0,179266543 0,160981273 -0,063805231 0,697049367 1
PSB TV and Radio

Operating Revenues 0,913539361 0,376158248 0,318035307 -0,282763961 0,526349844 0,526663292 1
Commercial TV
Operating Revenues 0,961597558 0,358152633 0,28451157 -0,265521622 0,681214693 0,65985289 0,953835649 1
Hours of programming
Broadcast 0,698508463 -0,375268113 -0,294446206 0,117769943 0,409064356 0,362292832 0,665428557 0,58829243 1
% Domestic Production 0,790374305 -0,548961677 -0,646232574 0,326016583 0,275789603 0,510187263 0,567716847 0,697386908 0,731962044 1
Licence Fee -0,1312261 0,711603386 0,809565638 0,011833391 0,232300759 -0,052526868 0,188355128 0,114213874 -0,283060454 -0,52015074 1
51
Robert G. Picard
Size findings
Four findings relating to population size were found important in the research.
Population has a very highly positive co-relation (revealing a very dependable
relationship) with operating revenues of PSB radio and television and with
commercial television operating revenues. Population has a highly positive
co-relation (showing a marked relationship) with the percentage of domesti-
cally produced feature films, TV films, short films, series, soaps and animation
programmes. Finally, population has a moderate positive co-relation (indicating
a substantial relationship) with the number of nationwide public and private
terrestrial channels.
These findings indicate that broadcasters in smaller states have fewer chan-
nels, lower revenues for both public and private broadcasters, and broadcast a
lower percentage of domestic programming than larger countries. These findings
meet our theoretical expectations based on broadcast economics relative to size.
When wealth is used as a size indicator, three significant findings are im-
portant. GDP per capita has a very highly positive co-relation (showing a very
dependable relationship) with advertising expenditures per capita, and a highly
positive co-relation (indicating a marked relationship) with higher licence
fees. Second, GDP per capita has a moderate negative co-relation (revealing a
substantial relationship) with the percentage of domestically produced feature
films, TV films, short films, series, soaps and animation programming.
These findings indicate that broadcasters in smaller economies (evidenced
by lower GDP per capita) have lower advertising expenditures per capita and
lower license fee levels than wealthier countries, and that they broadcast a
higher percentage of domestic programming than wealthier countries. The first
two findings confirm our theoretical expectations. The finding that countries
with lower GDP per capita produce a higher percentage of domestic entertain-
ment programming is interesting because it defies expectations. One would
normally expect that countries with lower financial resources would produce
less original programming in order to reduce costs. The reason for the finding
is unclear but it may be that broadcasters in these countries choose not to use
their resources to purchase inexpensive programming from abroad but prefer
to make more inexpensive programmes domestically.
Financial resources findings

Resources provided by advertising were co-related with three other variables.
Advertising expenditures per capita have a highly positive co-relation (show-
ing a marked relationship) with licence fee levels, and a moderate positive
co-relation (revealing a substantial relationship) with the number of nationwide
public terrestrial channels. Advertising expenditures per capita also have a
52
moderate negative co-relation (indicating a substantial relationship) with the

percentage of domestically produced feature films, TV films, short films, series,
soaps and animation programmes.
The co-relation between higher advertising expenditures per capita and
higher license fees explains the earlier finding that higher levels of wealth
were related to higher advertising expenditures per capita and higher licence
fee. This makes sense in economic terms because firms and residents in the
countries would have higher capacity to pay.
The findings that advertising expenditures per capita are related to the
number of public television channels but not to the number of commercial
channels is surprising. One would expect a relationship also with the number
of commercial channels. Although the reasons are not clear from this study,
the fact that the majority of public service broadcasters now accept some ad-
vertising may be affecting this result.
Revenues of public broadcasters were co-related with three variables, as
well. Public television and radio operating revenues had very highly positive
co-relation (showing a very dependable relationship) with commercial TV op-
erating revenues, and public television and radio operating revenues have a
moderate positive co-relation (revealing a substantial relationship) with the total
hours of programming broadcast, as well as the per cent of domestically pro-
duced feature films, TV films, short films, series, soaps and animation broadcast.
Commercial television revenues are co-related with the amount and type of
content that is broadcast. Commercial TV revenues had a moderate positive
co-relation (indicating a substantial relationship) with the number of hours
of broadcast programming, and with the per cent of domestically produced
feature films, TV films, short films, series, soaps and animation programming.
These findings relating to public and commercial revenues indicate that
countries with well-developed and well-funded public service broadcasters tend
to have better funded commercial broadcasters as well. Moreover, the higher
levels of domestic production in entertainment programming are also co-related
with better funding for both public service and commercial broadcasters.
These finding are in line with theoretical expectations that larger volumes
of available resources leads to more domestic production and programming.
The high relationship between public broadcasting and commercial broadcast-
ing revenues indicates that as resources for one grow so, too, do resources
for another. This result can be affected by the fact that the majority of public
broadcasters now accept advertising, but it may also be affected by the choices
of policy makers seeking to provide more resources through licence fees and/
or seeking to secure additional revenues in markets where larger resources are
available for commercial operations.
The results reveal that countries where lower levels of public and commercial
revenues are characteristic, lower levels of domestic production in entertainment
53
Robert G. Picard
programming are typical. These findings are in line with theoretical expecta-
tions in broadcast economics.
Market structure and services findings

Concentration of audience share had no moderate or higher relations with
any of the variables. Thus, leading broadcasters obtaining larger shares of the
available audience were not related to country size, financial resources, market
structure, or content provision factors. Some might take this to indicate that
language and other cultural factors play a greater role in programme attrac-
tiveness. However, the lack of relation to amount of domestic production calls
this into question and the reason for the result is not evident from this study.
The number of channels in a country was co-related with services provided.
The number of nationwide public terrestrial television channels had a moderate
co-relation (indicating a substantial relationship) with the number of nationwide
private television channels, commercial TV operating revenues, and per cent
of domestically produced feature films, TV films, short films, series, soaps and
animation programmes. The number of nationwide private terrestrial channels
had moderate positive co-relation (revealing a substantial relationship) with
public TV and radio operating revenues, commercial TV operating revenues,
and hours of programming broadcast.
These findings underscore the financial resource findings. There is a rela-
tionship between financial resource availability and both more services from
both sectors, public service and commercial, as well as with higher levels of
domestic entertainment programming. The findings are consistent with theo-
retical expectations based on broadcast economics.
Content provision findings

The hours of programming broadcast have a high positive co-relation (revealing
a marked relationship) with the per cent of domestically produced feature films,
TV films, short films, series, soaps and animation programming, and a moderate
positive co-relation (showing a substantial relationship) with the number of pub-
lic service channels. On the other hand, the per cent of domestic feature films,
TV films, short films, series, soaps and animation programming has a moderate
negative co-relation (indicating a substantial relationship) with licence fees.
These findings indicate that higher levels of broadcast hours in a country
are associated with higher domestic production, and that countries with lower
licence fees have a higher percentage of domestic production. The findings
related to hours broadcast and higher domestic production is in line with theo-
retical expectations of broadcast economics. The finding that countries with
lower license fees have higher amounts of domestic production in broadcast
54
is unforeseen and conflicts with economic and broadcast economic expecta-

tions. This finding appears somewhat related to the early unexpected finding
that countries with lower GDP produce more domestic content. Although not
clear from this study, it may indicate a preference for spending the limited
resources domestically even if inexpensive foreign programming is available.
Conclusions
This study of uses co-relation analysis for empirical investigation of variables
related to size in terms of both population and wealth. Clear relationships are
revealed between size (in population and GDP/capita) and the number of
broadcasting stations, volume of available resources, and scale of domestic
production. Caution is warranted because co-relation does not reveal causation
in any identified relationships. As demonstrated, however, the relationships
we’ve uncovered meet most of the theoretical expectations keyed to issues of
scale in broadcast economics. The exception is the finding that higher domestic
content provision is associated with smaller countries in terms of wealth. It is
nevertheless quite clear that size matters to revenues, services available and
domestic production (Table 2).
Table 2. Explanation of size findings
Size measured by population size Size measured by GDP size
Smaller nations have… Smaller nations have…

Lower advertising expenditures per capita Lower advertising expenditures per capita
(fewer financial resources) (fewer financial resources)
Lower licence fees (fewer financial resources) Lower licence fees (fewer financial resources)
Larger proportion of domestic programming Larger proportion of domestic programming
than wealthier nations (less importation)* than wealthier nations (less importation)*
* Unexpected finding
The unforeseen finding that countries with lower licence fees, lower GDP, and
lower revenue for public and private broadcasting nonetheless provide a larger
percentage of domestic productions is particularly interesting. Although it can-
not be proven from the data and analysis used here, a good possibility is that
because there are fewer channels domestic content is emphasised. It would be
logical to expect that as the number of commercial channels increase there is
a tendency to see more imported syndicated programming as a consequence
of cost savings measures.
The findings also make it clear that strength of financial resources is directly
related to industry structure and performance (Table 3).
55
Robert G. Picard
Table 3. Explanation of financial resource/Market structure findings
Greater financial resources produce more public and private broadcast channels
Greater financial resources increase revenues of public and private broadcasters
Greater financial resources and industry revenues increase number of hours broadcast and
greater domestic production
This chapter has shown that from the economic standpoint, size certainly does
matter. It is highly relevant as an influence on resources, capabilities, economic
viability and the capacity for national broadcast provision. This being the case,
one cannot have the same expectations for broadcasting in smaller countries as
in larger countries and one must recognize that similar policies will not equally
viable or effective in countries of different size.
The implication is that media policy makers should be wary when looking
to larger countries as exemplars of desirable broadcast systems at home, or as
appropriate templates for guidance on domestic policy development. Instead,
optimal broadcasting policies are those that are developed to account for the
specificities of domestic economic, structural, and resource conditions.
The results also indicate that standard indicators of top-4 (and top-8) firms
used in analysis of consolidation and concentration are not particularly germane
to media markets because there is a natural concentration due to economic
conditions that typically produces less major firms in both smaller and larger
countries. This would seem to indicate that more media-specific policy rather
than general competition policy is likely warranted in the broadcasting sector.
Thus, it is clear in this analysis of empirical data from 31 European countries
that broadcasting in the EU (at least) is definitely not the same across countries.
The size of the country, both in population and wealth, is a key factor, in ad-
dition to historical, political, and cultural factors. In short, size matters because
it has a determinant bearing on the possibilities and potential outcomes for
every broadcasting system.
56
Sizing Up Size on TV Markets
Why David would Lose to Goliath
This chapter1 argues that every size of television market has characteristic dy-
namics that are more or less applicable everywhere, and that the explanation
of key difference lies in relative market leverage2. This can be conceptualised
as an expression of the market’s inability to allocate resources efficiently, which
is the case generally in media markets due to conditions of imperfect compe-
tition and higher potential for market failure in media goods. In this chapter
I assume that size matters for both performance and policy in TV markets,
and focus attention on how it influences market conditions. I approach the
task by examining difference in market volume and domestic programming
between smaller and larger markets. In line with the book’s premise, I utilise
both population size and economy size. Interest is especially focused on the
interaction between types of size.
We begin with quantitative analysis to clarify available revenues in respec-
tive television markets. This establishes TV market volume and is the result of
combining the three primary streams of funding for television: public subsidy,
advertising and subscription. I rely on statistical regression to investigate the
relationship between population size and economy size to see how size influ-
ences market volume. The findings are substantiated by descriptive statistics.
Secondly, I study whether size influences the level of investment in do-
mestic TV content. That is handled by investigating the volume of originated
programming, defined as all programming that is commissioned by domestic
operators rather than acquired from the international market. This is useful for
1. This chapter is a significantly reduced version of a section in my forthcoming doctoral thesis at the Copenha-
gen Business School. When published, readers will find more detailed descriptions and analysis there.
2. The definition of size applied in the regression analysis is not categorised but scaled, the reason being that
return to scale should respectively increase and decrease relative to population and economy size. The larger
the market the more efficiently it should be able to provision services. This points to a linear relationship,
with an important exception. When assessing public subsidy it becomes more a question of political choice
regarding the scale and scope of market intervention rather than size per se. Large markets, however, have
the potential to provide higher levels of subsidy, although there is no guarantee this will be utilised. When
using the term categorised size, we apply a relevant definition for large market and large Economy via GDP
PPP pr. Capita 24.216,8 US $, all other instances being considered small.
57
identifying the relationship between the two primary size variables (population
and economy) on the expenditure for originated content. The same statistical
techniques are applied.
Thirdly, I substantiate the claim that size of population and size of economy
interact. This is useful for establishing how size influences TV market volume
and expenditure on originated content both individually and through interac-
tion. Both the size of the population and the economy are important because
they influence the critical mass of the market. The larger the market the more
revenue should be available on the one hand, and the more that cost can be
spread on the other. I argue that the provisioning of domestic content is in-
fluenced by size due to the logic of collective funding and increasing returns
to scale.
The chapter begins with the essential argument, followed by three sections
where the relationships of interest are investigated. The first of those sections
focuses on why there should be a difference. That is followed by empirical
evidence about TV market volume, which shows differences in co-relation
with the size variables. The evidence for difference based on expenditure on
originated content is demonstrated in both statistical and descriptive forms.
This leads to the presentation and testing of four varieties of size. The chapter
concludes with discussion about the importance of size to how TV markets
are structured and how TV systems work.
Why size differently influences smaller and larger TV markets

Although it is certainly the case that smaller and larger TV markets have similar
characteristics as a result of how broadcasting technology works, there are
significant differences in the dynamics that characterise comparative contexts.
These differences are caused by variation in market volume and supply. This
suggests the importance of market leverage: differences in the dynamics ac-
counting for variation in smaller markets are due to the market’s inability to
leverage the critical mass necessary to provision media content goods, where
cost of production is independent of consumption. In short, it costs as much to
make a programme for a few people as for a multitude because costs are fixed,
in large part. This is especially pertinent to the dynamics of smaller markets
because less ability to leverage must limit the potential for achieving higher
efficiencies related to scale.3
3. Efficient scale in small markets requires relatively high levels of market share, evident in high degrees of
market concentration. Especially in the situation where advertising and subscription revenue are garnered
by international owners or investors, the distinctly domestic aspects of a TV market are correspondingly
weakened. When taking into consideration digitization, this problem may actually worsen – if not in terms
of channel supply or overall content supply, then at least in the level of domestic content supply.
58
The argument is based on an assumption: It is in the joint interests of both

the state and consumers to secure domestically produced content because au-
diovisual representation has a crucial role in contemporary national cultures.
The cultures that characterise a people as a nation, both in their distinctions
and connections, are produced and must be continually reproduced. A com-
plex interaction between preservation and incorporation is everywhere obvi-
ous, and increasingly today this is related to influences from abroad via the
impact of globalisation. This is not always a peaceful, easy-going process, but
rather frequently characterised by clashes over values and identities – both
inside domestic cultures and in response to external cultures. Domestic content
distils and represents these cultural dynamics in various generic formulations,
including humour, news, drama and current affairs – really, in every genre as
the concept of “working through” clarifies (Ellis 1999). For matters related to
cultural identities, self-perceptions and perspectives on the world, and every
collective routine of social practice in societies today, domestic originated
television content plays crucial roles.
For smaller markets this is problematic because domestic programming is
typically unable to produce sufficiency across all types of genres in amount or
quality, or both. The market is materially too small to support that. Domestic
companies in smaller markets therefore face generalisable difficulties in being
unable to reach the efficiency of scale required to produce all the contents
that are needed.
This situation fuels a related tendency. Mass media require some form of
collective funding because production cost is independent of consumption.4
Because content is expensive to produce content but cheap to purchase, there
is incentive to buy tested formats, popular series, hit motion pictures, and other
media goods because this lowers uncertainty in attracting viewers. Risk of
market failure and lack of incentives are governing principles in determining
a market’s lack of original domestic content.5
This complexity is explained by difficulties related to the nature of media
content as public goods, as well as in economic theory where increasing returns
to scale explains how the cost of production is independent of consumption.
This situation produces typical challenges in securing sufficiency in original
domestic content:
4. Even in cases of subscription funding, if lacking the critical mass to facilitate production there can be no
guarantee of sufficient revenue to secure the content necessary to satisfy either consumer or public interests.
The greater the number of subscribers the further cost is spread due to the intrinsic character of broadcast
properties as non-rivalry goods.
5. Public subsidy is therefore a viable way to secure the level of provisioning desired in media content by a
particular market. But this does not necessarily mean size will determine the level of public subsidy because
that is inherently a political decision and always hinges, to a high degree, on the agreed legitimacy of market
intervention.
59
1. The non-rivalry characteristic of media content (meaning the same content

can be consumed by more than one person at no added cost) with high
potential for non-excludability6;
2. Increasing returns to scale because the cost of production is independent
of consumption (meaning that most of the costs are sunk in producing
the first copy, with duplication being fairly cheap);
3. Higher levels of efficiency in scale caused by the collective funding func-
tion, especially important for smaller markets (meaning that domestic
broadcasters depend on single markets while multi-national corporations
[MNC] are able to distribute the same channel or content – dubbed or
subtitled – to several markets at once, making it much easier to realise
efficiency in scale).
The logic of the argument suggests a range of hypotheses that will be ex-
plored. Taken together these imply an increased vulnerability and dependency
of smaller media markets on foreign productions. I rely on abbreviations to
represent the key concepts:
• Media content characteristics – MCC
• Non-rivalry in consumption – NRIC
• Non-excludability – NE
• Excludability – E
• Increasing returns to scale – IRS
• Minimum efficient scale – MES
In the context of television markets:
MCC = NRIC + either NE or E ↓
+ IRS ↓
High MES level ↓
We expect small media markets to be more vulnerable and dependent than large markets
due to increased difficulty in establishing a commercially viable domestic market as a conse-
quence of market failures ↓
Small TV market volume is less than Large TV market volume ↓
Small TV markets have less expenditure on originated content than Large TV markets ↓
Small and large markets share general characteristics caused by TV as a medium, but mana-
ging with the entailed dynamics is more challenging for small TV markets in provisioning original
domestic media content due to less market volume and lower commercial incentive. ↓
The level of Population and Economy therefore influence the relative market leverage of
volume and provisioning, both individually and through interaction.
6. I argue that domestic content while potentially non-excludable, is for the primary market audience. We can
argue that culture and language almost by definition will act as excluding factors which influence what and
where the firm can acquire productions for domestic audiences.
60
Smaller and larger media markets certainly share challenges that are inherent for
broadcasting, and other forms of mass media (especially newspapers) for that
matter. These create considerable difficulties in ensuring adequacy in the public
service dimensions of media, long accepted as being of essential importance in
the EU and other mature democracies (at least) because media are necessary
for serving the democratic, cultural and social needs of respective societies. It
has also long been accepted that smaller countries share relatively unique chal-
lenges in being subject to significantly higher degrees of vulnerability to and
dependency on foreign-originated content. This legitimates varying amounts of
policy intervention that are intended to correct deficiencies. This is a familiar
premise in numerous reports (see for example Peacock 1986; the Amsterdam
Protocol of 1997; UNESCO 2005). This is also in line with provisions in the Com-
munication on Broadcasting issued by the European Commission regarding the
application of State aid rules to public service broadcasting (2009, no.42), where
it is explicitly noted that smaller member states face real limitations in being
able to finance public services in media due to the higher cost per inhabitant.
The market in and of its self cannot be expected to provision the full vari-
ety of desired programmes, especially in smaller countries with their reduced
volumes of domestic resources. To this we can add the even greater problems
in doing so with regard to informational and educational programmes that are
not typically profitable for commercial business. In practice this means that
while the relative costs for a one-hour production are relatively the same in
Germany and Denmark, for example, the main difference lies in the number of
people available to co-finance production, as well as the relative wealth of the
respective societies (an issue that becomes especially pointed, for instance, in
certain countries in Eastern and Central Europe today). As a function of popu-
lation size alone, Danes must pay more per capita than Germans if they want
to enjoy the full range of media goods that are typically considered necessary
for democracy, society and culture.
The background to this discussion hinges on the notion of a public interest
in providing specific media goods and services to society as a whole, and which
are inherently beyond the more particular tastes of an individual consumer
(McQuail 1992). This implies the importance of accounting for differences in
the volume of public expenditure on media as a factor of available revenue.
Of course the commercial sector has an understandable interest in establishing
common markets and promoting free trade. The potential of export markets
does significantly increase business opportunity. But it is equally understandable
that in smaller markets policymakers have an interest that is quite reasonable to
ensure the viability of domestic audiovisual production in all the varied genres
of content and media products necessary to the well-being of the societies for
which they are responsible, and to which they must be accountable. The fact
that it is understandable on both sides accounts for continuing disagreement
61
between the EU and US over policy in television trade (among other things).
The US claims that the EU violated GATT agreement in formulating policies
that require some percentage of European originated works in the totality of
programme output in member states (e.g. in the Television without Frontiers
directive from 1989 that was recently amended in 2007 as the Audiovisual Media
Services directive). For more about all these policy concerns see the chapter
by Erik Nordahl Svendsen.
EU legislation since the mid-1980s has facilitated the establishment of the
dual system of public and private broadcasting sectors competing in Europe,
and facilitating a strong commercial media sector that is now able to compete
in scale and scope across Europe. This has undeniably benefitted diversity in
content and pluralism in provision. Although under fierce attack today, public
subsidy has factually been essential to ensuring that competition is robust for
markets where it would otherwise collapse due to problems inherent with
economies of scale inside and across European media markets. Ironically,
however, EU policy is today limiting the competence of state policy to handle
media matters, matters that have undeniable importance for both historical and
cultural interests as well as efficacy in the performance of competition. The
evidence points to very different conclusion than the noisy contrary claims
about public subsidy creating ‘unfairness’ in conditions of competition.
Here we are dealing with material limitations and necessities caused by
differing levels of market leverage potential in variously sized markets, which
affect abilities to provision domestic public services in media. Despite claims of
market distortion and the desire for some universally applicable template to fairly
steer media policy in respective member states, variability in market conditions
means that what might counts as distortion in one country could not be fairly
be considered as such in another country. There is no universal best practice.
Rather, policy in each member state must take account of all the particularities
and traits of each respective television market, even if the medium as a technol-
ogy has inherent characteristics that create commonly shared challenges – as
noted earlier. There is a case to be made that in the struggle between com-
mercial and cultural interests, which is certainly evident in EU media policies,
what has been taking shape in recent years appears tailored more for catering
to the interests of the large member states with their inherent advantages than
for the small member states with their inherent disadvantages. Complexity in
markets is not, apparently, something the EU is all that competent to deal with.
The sample and analysis

The sample for studying the relationship between size, TV market volume and
expenditure on originated content is complicated. Non-European markets could
62
not be included for analysis due to lack of comparability in the kinds of data
collected, and how it is collated in different countries and regions. There are
especially severe limitations regarding the expenditure on originated content.
The markets I have been able to include are presented in the Table 1.
Table 1. Sample divided by categorised state size
POPCAT
Small Large
N 22 13
Bulgaria, Croatia, Estonia, Poland, Romania,
Small 12
Hungary, Latvia, Lithuania, Turkey, Ukraine
TV market Slovakia, Portugal Australia, Canada,
ECONCAT
volume Austria, Belgium, Cyprus, Czech France, Germany,
Republic, Denmark, Finland, Italy, Japan, Spain,
Greece, Ireland, Netherlands, UK
Large 23
New Zealand, Norway, Slove-
nia, Sweden, Switzerland
POPCAT
N Small Large
19 17
Bulgaria, Estonia, Hungary, Poland, Romania
Small 9 Latvia, Lithuania, Slovakia,
Expenditure
Portugal
on originated ECONCAT
Austria, Belgium, Cyprus, France, Germany,
content
Czech Republic, Denmark, Italy, Spain, UK
Large 17 Finland, Greece, Ireland,
Netherlands, Norway, Slovenia,
Sweden
Source: Own depiction/model
The sample of TV market volume is based on quantitative data collected for 35

markets and constructed on the basis of the three main revenue streams. The
sources vary. The data on subscription revenue were collected from Screen
Digest; TV advertisement revenue is derived from the World association of
Newspapers (2008), and using the Euromonitor database for corrections and
exchange rates; the public revenue7 is derived from a combination of published
information from regulators and public broadcasters – although there are ex-
ceptions as data for Japan, the USA, Greece and Cyprus were derived from
Screen Digest, and information about New Zealand is derived from accounts
published by New Zealand On Air, including the Maori channel; for Canada
the information was collected from CBC financial accounts. The expenditure on
originated content for a smaller subset of 26 markets is based on quantitative
data from Oliver & Ohlbaum Associates (2009) focused on originated content
as measured by market expenditure in 2006-2007. Originated content is under-
7. For public revenue the decision has been to include radio revenue in the figure because this is inseparable
in the data for most markets where all PSB is handled by a single company. For markets such as Sweden
and Romania where the figures are divided I had to therefore aggregate them to achieve comparable figures
necessary for analysis.
63
stood as content commissioned instead of acquired (these do not include the

revenue, for instance, on sports rights, but do include expenditure for news).
Empirical evidence on the influence of size on TV market volume

I argue there is a relation between total market size and the available revenue in
the television market. If true, we should therefore be able to identify an effect of
size on TV market volume. We have earlier argued in such a way as to expect
this effect should be positive due to characteristics of media content as public
goods, and the challenges of non-rivalry in consumption and minimum efficient
scale in combination with increasing return to scale. To test this, I applied an
OLS regression analysis respectively for both population size and economy
size on TV market volume. As the number of observations is limited to 35, we
must be cautious about conclusions. On the other hand, the sample includes
the vast majority of EU member states as well as Japan and the USA, so there
should be fairly validity for the European context at least. This analysis is a first
step to ascertain whether the expected relationship is statistically significant.
The results for population and economy size in relation to TV market volume
indicate the regression is robust in explaining variation8. Both dimensions of
size show strong relationships.
The assumed relationship between size and TV market volume is substanti-
ated. However, we are left with a picture suggesting that for TV market volume,
the economy has more impact than population size.9 While Poland is large
when measured by population, when measured by economy it is relatively
small. This is a good contrast, for instance, with the Danish market that is
rather the opposite. This points to the relative character of size where a small
population with a relative large economy can, in principle, invest a similar
amount of revenue as a market with a large population but a small economy.
This also substantiates the reason for statistical deviation between media mar-
kets in former Soviet states. In summary, the model is statistically significant
with the coefficient of determination showing a strong positive relationship
between the variables.
This confirms the first step in our statistical analysis of size and supports our
discussion about the difficulties that small markets have in lacking sufficiency
of size (in one or both dimensions) to provision public services in media. They
simply cost more per capita due to the public good characteristics of media
content. The increasing returns to scale combined with a difficulty in reaching
efficiency leads to higher potential for market failure in domestically produced
content. This is especially the case in smaller markets.
8. The explanatory strength varies between adj. r(34) = .764, p < .001 for population and adj. r(34) = .952, p
< .001 for economy.
9. Our sample size did not allow for multiple regression analysis containing both variables because of omitted
population due to inter-correlation, but the relative small and large relationship does appear to be important.
64
Table 2. Regression statistics1 on the relation between population and economy

size on the TV market volume2
Sample without the USA Sample with the USA

Population Economy Population Economy
Coefficient (OLS) 154,459 *** 0,006 *** 281,356 *** 0,009 ***
SE 14,885 0,000 15,741 0,000
t-statistic 10,377 25,074 17,874 37,896
Constant -308,935 -138,690 -2962,525
SE 561,130 243,926 992,351 -136,410
t-statistic -0,551 -0,569 -2,985 -2,952
Observations 34 34 35 35
Adjusted R2 0,764 0,952 0,904 0,978

R2 0,771 0,950 0,906 0,977
F statistic3 107,677 628,690 319,475 1436,143
Prob > F 0,000 0,000 0,000 0,000
Durbin-Watson4 1,663 2,103 1,871 1,706
*** (**) [*] denote significance at p < 0.01, (p < 0.05), [p < 0.1].
1. This needs further analysis on the hypothesized relationship between POP, ECO and TV MV can be written like this:
Regression: Y = + βX + , equal to TV MV = + βPOP + & equal to TV MV = + βECO +
Where = The constant term (the MS with a population or economy of zero), β = The effect of increased PS or ES in
terms of 1mn on MS in mn. Euro (the coefficient of the independent variable), = The error function, that other factors
influence MS (non-observed/non-observable factors).
2. Using the method of stepwise forward in the regression analysis led to the omitting of population, therefore I have
performed two separate analysis of these, in short economy appear as the variable explaining most of the variance.
3. The t-test being 107,67 and 628,690 is different from Zero. Beta coefficients refers to the change in the slope of the
line, meaning the change in market size based on change in population (under the function of MS = + βP).
4. Furthermore, we can reject that the data is auto correlated as the values are within the range of 1,5-2.5 and thus
assume independence of observations.
Market volume distribution by type

In this section of analysis we examine the distribution of revenue in the indi-
vidual markets. Our purpose is to identify the differences between these markets
regarding the distribution of the three types of revenue (subsidy, advertising
and subscription).
The figure shows the distribution of revenue sources in millions of euros
for those markets included in the analysis. In aggregated terms, the smallest
market is Estonia with €77,3 million. The next smallest are also Baltic markets,
Latvia with €93,7 million and Lithuania with €299,6 million. The overwhelming
market leader is the USA with advertising revenue of €43.668 million and sub-
scription revenue of €51.229 million, nearly rivalling the whole of aggregated
EU markets. The second largest market is Japan with €29.218 million, in total.
These two markets represent both the largest populations and economies in
the sample. To make a useful comparison between the USA and the EU there-
fore requires pooling all of the data on Europe. Aggregating the revenue for
the five largest EU markets still only comes to about 50% of the total for the
USA. The third largest market in the world, and the largest in Europe, is the
65
Figure 1. TV market volume by type of revenue in millions of euros € ordered by largest volume1
66
84,9 43668,6 51229,8 1. USA
3911,6 12379,9 9015,3 2. Japan
5135,9 4743,3 6333,2 3. UK
7249,9 4240,3 2636,1 4. Germany
2368,9 4306 3634,5 5. France
1588 4646,2 2130,4 6. Italy
673,3 2285,8 4333,8 7. Canada
436,9 3373 1644,2 8. Spain
620,6 1995,8 1199,2 9. Australia
605,3 829,4 1119,7 10. Netherlands
476,3 1123,5 577,7 11. Belgium
156 1413,6 428 12. Hungary
196,9 846 943,8 13. Poland
657 473,5 753,9 14. Sweden
676,5 576,4 582,6 15. Switzerland
471,9 759,2 562,3 16. Norway
PS
321,5 934,6 436,7 17. Turkey
450,9 353,3 582,6 18. Denmark AD
241 503,6 576,1 19. Portugal
473 569,9 264,4 20. Austria SU
182,3 925,6 163,1 21. Czech Republic
323,8 716,2 176,9 22. Greece
41,2 954 108,6 23. Slovakia
215,5 261 449,6 24. Romania
387,2 253,9 262,6 25. Finland
196 357,2 316 26. Ireland

57,3 335,8 271,7 27. New Zealand
141,1 437,7 3,2 28. Croatia
8,4 328,1 122,4 29. Ukraine
52,3 276,9 129,3 30. Bulgaria
22,9 423,2 8,2 31, Cypros
78 197,4 43,1 32. Slovenia
14 253,8 31,8 33. Lithuania
18,4 43,9 31,4 34. Latvia
23,4 25,7 28,2 35. Estonia
1. The table has been constructed using data from the following sources, for advertisement revenue a combination of World association of Newspapers annual publication in combination with the Euromonitor database for
exchange rates and corrections, the figure representing the method of calculating this in the individual markets. The subscription revenue is from the Screen Digest Television intelligence database representing the individual
domestic market figures. The public revenue is from a combination of sources where annual reports of financial figures in combination with Screen Digest and controlled using EBU figures. Furthermore, in markets where public radio
companies are independent, their public subsidy has been included in the calculations to ensure comparability, the only market where this is not the case is the US – this is not to been perceived as a major skewing, but rather a
relatively small bias. The inclusion of public radio revenue was to secure that the markets with separate companies did not fall below the level of similar markets, where television and radio are combined. Separate ranking tables
of the individual revenue types are in available in appendix 1A-1D.
Source: Screen Digest, WAN and GMID
UK followed by Germany, France and Italy. The middle markets are largely
comprised of Nordic states along with Switzerland and Austria, but there are
large population markets with weak economies such as Poland. It is interest-
ing to observe the diversity of revenue levels across markets. It’s clear that
respective individual markets rely on different proportions for funding from
the three revenue streams.
In fact, analysis reveals that most markets apply public subsidy to some
degree. But the level is quite different for several smaller population markets,
which apply public subsidy to a higher degree in order to reach a higher mar-
ket volume. Moreover, this is done mainly via PSB. Public subsidisation and
subscription revenue play major roles in some markets, as well. But what seems
of greatest importance to media companies is that the diversity of revenue has
varying risk reduction potential in relation to wider fluctuations of domestic
and regional economies. European markets in general have small populations
in comparative terms, and thus even in large economy markets like Germany
and the UK public subsidy plays a strong role in supporting domestic audio-
visual production. We should also observe that the markets with the largest
advertising revenue are among those with the strongest private commercial
media companies. It is fair to say that most markets are small in comparison
with giants like the USA and Japan.
Table 3. TV market volume descriptive statistics in millions of euros € divided by

public, advertisement and subscription on categorized state size
Without the US With US figures1

Categories PS AD SU Total PS AD SU Total
Mean 837 1534 1174 3545 816 2737 2604 6157

Median 323 646 443 1354 322 716 450 1387
POPCAT Small mean 261 537 319 1117
Small median 189 456 264 1160
ECOCAT Small mean 119 523 274 916
Small median 97 383 126 754
POPCAT Large mean 1894 3362 2740 7996 1755 6462 6470 14687
Large median 647 2829 1887 6374 621 3373 2130 7293
ECOCAT Large mean 1229 2085 1664 4978 1140 3752 3684 8576
Large median 475 794 583 1860 472 794 583 1860
1. Due to the US effect, the tables below will include data with and without the numbers from the US. First we will look
into total revenue and then revenue per capita.
There is a lot of variance between the figures, even without the USA included.
The average for advertising revenue in large population markets is €3.362 bil-
lion, while average subscription is €2.740 billion and public funding averages
€1.894 billion. That adds up to a total of €7.996 billion on average. In small
population markets the averages are much smaller: €537 million for advertis-
ing, €319 million for subscription, €261 million for public revenue, for a total
67
averaging €1.117 billion. On average, then, small market populations have

roughly one-third the total available for bigger population markets.
The comparison is as informative when comparing on the basis of economy
size. Large economy markets have an average of €2.085 billion for advertising,
€1.664 billion for subscription, €1.229 billion for public revenue, and a total
on average of €4.974 billion. In contrast, small economy markets average €523
million for advertisement, €274 million for subscription, €119 million for public
revenue, and a total of slightly less than one billion at €916 million on average.
The difference is in fact more pronounced as smaller market economies have
only about one-quarter of the revenues that large market economies enjoy.
Studying per capita differences between smaller and larger markets makes
variation on both accounts even more evident.
Table 4. Relative TV market volume in euros € per capita on categorized size
Without the US With US figures

Categories PS AD SU Total PS AD SU Total
Mean 35 83 46 164 34 85 49 168

Median 28 73 37 158 27 75 37 158
POPCAT Small mean 38 98 44 180
ECOCAT Small mean 11 56 19 86
POPCAT Large mean 29 56 48 133 27 63 58 147
Large median 24 70 37 155 20 70 37 168
ECOCAT Large mean 48 98 60 206 46 100 65 211
Large median 39 78 58 177 39 78 59 182
On average, small population markets on average have €38 of public revenue

per individual, €98 for advertising, and €44 in subscription, for a total of €180
in per capita expenditure. In contrast, large population markets on average
have €29 of public revenue per individual, €56 for advertising, and €48 in
subscription, for a total of €133 in per capita expenditure. From a summary
perspective this means that on average small population markets have a higher
per capita expenditure than large markets. This is precisely what we should
expect according to the logic of non-rival goods that characterise media content:
provided that the same relative level of provision is steady, the cost divided
among participants cause the per capita cost to drop in markets with the bigger
populations because the costs are spread more broadly.
What about the effects of economy size? Smaller economy markets on aver-
age have €11 of public revenue per individual, €56 for advertising, and €19
in subscriptions, for a total of €86 in per capita expenditure. In comparison,
the large economy markets on average have €48 of public revenue per indi-
vidual, €98 for advertising, €60 in subscription, for a total of €206 in per capita
68
expenditure. The pattern is somewhat different because the larger economy

markets have more total available revenue while the smaller economy markets
have less. People can spend more on media because they have more overall
to begin with. What we can argue, then, is that the general economy levels
for larger economy countries mean they have more revenue and can finance
higher levels of provision.
What we see in the per capita figures indicates, as well, that collective funding
of public subsidy and advertising, generally spread across a broader number
of persons, is in line with theory because the per capita figures are lowest in
large markets. However, subscription revenue, being a business model where
encryption functions as a method of artificially changing the non-excludable
characteristic of public goods into excludable club good characteristics where
consumers pay for access, indicate that this could change – depending on pay
platform development10. But, as we see, the level of expenditure on services with
either club or public good characteristics is anyway lower in large population
markets based on subsidy and ads per capita, which is interesting considering
the difference in relation to subscription. This either indicates that encryption
makes a difference, or that large markets with more resources have invested
in building platforms to a higher degree than small markets – or possibly both.
Also as assumed, smaller population markets have relatively higher proportion-
ate expenditure on media than large population markets. This is in line with
the public goods hypothesis suggestion that domestic content is important in
terms of securing services with democratic, cultural and social merit11.
Studying the figures of the totals compared with the relative amounts of
public expenditure illustrates a diverse picture, reflecting political preferences
in smaller and larger markets. Public subsidy is revenue allocated politically and
is not, per se, related to the size of a population – even though large markets
have the potential and do tend to allocate more than small markets in most
developed economies. Large markets including Germany, Japan, the UK, Italy
and France are in the Top 5 in this respect, and Canada as well as Australia
are all in the Top10 (see Figure 1)12. Public expenditure is an expression of
political will manifest in terms of how governments choose to deal with media
goods either as merit goods or in terms of market failure.
There is no doubt that size matters for TV market volume. Population size
and economy size have both been shown to have significant, instrumental
influences on the availability of resources for TV broadcasting, and the per
capita costs for its provision. Of course factors beyond size also matter, as
10. It is important to remember that subscription also functions as a club good because there are packages
(tiers) instead of free channel choice.
11. The difficulty is that the services are not available. If all available content is imported and there is no domestic
content, then the market must be evaluated differently.
12. In principle small markets could subsidise more than large, but it would of course represent a higher per-
centage of their GDP to do so.
69
indicated. The level of subscription revenue is dependent on the penetration

of pay television, and the level of public subsidy is dependent on the political
interest to intervene, as well as historical and cultural concerns establishing
path-dependency. Advertising revenue is dependent on the level of turnover
of companies in combination with their interest in TV advertising. So although
the aggregated levels of population and economy size are significant factors,
there are several underlying mechanisms in play.
We can now focus attention on the influence of size as a determinant of
originated production of domestic content.
Evidence on the influence of size on expenditure

on originated content
Our hypothesis is that size is of importance to scale economies, meaning that
due to the relationships already demonstrated we expect to see a strong positive
co-relation between population and economy size on the levels of investment
in originated content. If proven correct, this will substantiate an argument that
difference in state circumstances that are conditioned by the relative variation
of size in populations and economies does lead to differences in the ability to
provision public media services. To test the relationship we will again apply
OLS regression to the relationship between the dependent variable (expendi-
ture on originated content) against the independent variables (economy size
and population size). The 26 markets comprising our sample is again relatively
limited in global terms, but sufficient to substantiate the relationship for Euro-
pean policy concerns. The reasoning behind the assumed linearity is that the
Table 5. Regression statistics for Expenditure on originated content
Expenditure on originated content1

Population Economy
Coefficient (OLS) 47,356 *** 0,002 ***

SE 4,568 0,000
t-statistic 10,364 19,174
Constant -183,201 -94,426
SE 135,295 73,459
t-statistic -1,354 -1,285
Observations 26 26
Adjusted R2 ,810 0,936

R2 ,817 0,939
F statistic 107,422 367,650
Prob > F 0,000 0,000
Durbin-Watson 1,226 1,762
*** (**) [*] denote significance at p < 0.01, (p < 0.05), [p < 0.1].
1. Using a multiple regression analysis is not viable, as applying the method of stepwise forward in the regression ana-
lysis led to the omitting of population, therefore I have performed two separate analysis of these, in short economy
appear as the variable explaining most of the variance.
70
larger the market, the more able it is to provision such goods. We assume that
size influences the level of expenditure on originated content. This requires
analysis of the hypothesised relationship between size regressed on expendi-
ture for originated content.
The regression confirms our expectation: Every additional one million in
either population or economy sizes influences the level of expenditure on
originated content. The figures indicate that size in a European context has
convincing explanatory strength13. The larger these variables, the more market
leverage and, consequently, the higher the level of expenditure on originated
content. The findings verify our hypothesis on the relationship between size
and originated content, and are precisely as expected in economic theory.
Population and economy size help establish the framework conditions for
market volume, as earlier indicated in this analysis, and thus secure conditions
for commercial broadcast activity in allowing utilisation of economies of scale.
It is especially important to understand that private commercial companies
are able to utilise economies of scale across markets, while public broadcast-
ers are confined to function in the home domestic market, thereby necessarily
limiting their capabilities to utilise proximate economies of scale. This makes
sense, given the general scarcity of talent and resources that correspondingly
limit the scope of what is possible in domestic production. Very often, as well,
a considerable portion of available resources must be invested in news and
current affairs programmes because these are so highly relevant to the public
service mandate, but for such programming the export potential is extremely
low in smaller markets with unique languages. Large market conditions estab-
lish more viable frames for commercial activity even here because it becomes
more feasible to achieve economies of scale also because their languages tend
to be spoken abroad. Smaller markets thus function as subsidiaries where the
larger production companies find it attractive to gain market entry or to set up
ventures that allow them to better utilise economies of scale largely already
achieved elsewhere. In general it is fair to say that smaller states can only real-
istically counter some of these challenges by relying on PSB, i.e. by investing
public revenue in public media. Obviously this will not counter everything, nor
should it in the interests of pluralism. Moreover, even when more successful
than on average it can’t produce perfect competitive conditions. On the other
hand, no media system anywhere under any conditions has yet produced
perfect competition.
There is a surprise when studying the affects of size on expenditure on
originated content [EOC], however. We expected to find less revenue was
spent on new domestic content in large markets on a per capita basis. This
was not the case.
13. Population regressed on EOC give an adj. r(26) = .810, p < .001 and where economy regressed on EOC give
an adj. r(26) = .936, p < .001.
71
Table 6. Expenditure on originated content descriptive statistics
POPCAT ECOCAT
Total in € mn € per Capita1 Total in € mn € per Capita
Small Mean 226,5 31,0 118,6 10,8

Median 262,0 24,1 73,0 9,6
N 19 19 9 9
Large Mean 2092,9 33,9 1040,9 42,9
Median 1669,0 30,3 360,0 37,6
N 7 7 17 17
Total Mean 721,7 31,8
Median 278,5 28,8
N 26 26
1. The per capita calculations are based on population per 1st of January 2007
There is indeed a slightly higher expenditure per capita in large population

markets (at nearly €34 versus €31) than in small population markets. Of course
when aggregated a difference of nearly €3 per capita can amount to a large
amount in absolute terms. But in analytical terms, the figures do not differ
substantially. However, the results indicate significant differences in the level
of expenditure on originated content when we instead compare on the basis of
economy size. In large economy markets the expenditure per capita is nearly
€43 for large economy countries but only about €11 in small economy markets.
This indicates that larger markets have significantly higher rates of domestic
content production because they can afford that.
This is of course not the picture in the total figures, where small population
markets represent EOC for €226,5 million, while large represent expenditure for
€2092,9 million. For small economy markets a similar picture can be identified,
where small economy markets invest €118,6 million compared with €1040,9
million in large economy markets. (€360 million is the mean figure for large
economy. This will be discussed further by showing individual market figures).
From a political decision-making perspective, we can argue that for small
markets it is beneficial to conceptualise a state as a type of club that shares com-
mon cultural affiliations and language community traits. Even while television
content does have the characteristics of public goods, when we incorporate
language and culture dimensions, they become club goods in a sense. The
purpose of originated content is to secure the welfare of the club: its historic
cultural identities, unique languages, and internal interests in local news and
debate that are crucial for the club to be a healthy democracy, economy and
society. This is very often problematic, however, for smaller market countries
– as demonstrated in Figure 2.
The figure shows that small markets are quite challenged. The markets with
the highest public subsidy also have the highest levels of expenditure on origi-
nated content, with Germany and the UK each having a level of expenditure
72
Figure 2. Expenditure on originated content in gross millions of euros €
Latvia 11
Lithuania 13
Estonia 14
Cypros 17
Slovenia 43
Slovakia 68
Bulgaria 73
Hungary 119
Romania 125
Czech Republic 167
Finland 262
Greece 269
Ireland 278
Austria 279
Portugal 310
Poland 334
Sweden 343
Norway 360
Belgium 413
Denmark 469
Netherlands 605
Spain 1346
Italy 1669
France 2524
UK 4140
Germany 4512
0 1000 2000 3000 4000 5000
Source: Oliver & Ohlbaum performance.
roughly as great as the expenditure on originated programming for all the 21

smaller markets in aggregate (Latvia through the Netherlands = 4.572). The
challenge of minimum efficient scale (MES) is formidable indeed for small
market countries to secure a healthy diversity of domestic content. The big TV
market volume of large market countries enables them not only to secure far
more domestic content and more easily, but also to export to small markets –
especially to those which have some affinity culturally (e.g. Germany to Austria,
Britain to Ireland, etc.).
The per capita figures illustrate rather dramatically that it costs relatively
little for big market countries to produce so much more originated content
compared with small market countries. Per capita expenditure confirms our
expectation that public subsidy is the crucial influence determining the level
of originated content. In the light of this data, it seems clear that small market
countries are able to sidestep typical difficulties associated with media market
and content good characteristics through public subsidising and/or regulatory
measures14.
14. When studying the higher than average figures for level of expenditure on originated content, the TV market
ecology and regulatory conditions appear to be quite beneficial for securing such content. Where we find
the highest per capita rates there is correlation with a dual or even triple system model (i.e. private + public
and also community media) that has been supported and regulated by the state. This becomes especially
visible in the Danish model where all the main television companies invest in originated programming to
attract audience. This is discussed in some detail in the forthcoming doctoral dissertation.
73
Figure 3. Expenditure on originated content per capita in € 2006/2007
Lithuania 3,8
Latvia 4,8
Romania 5,8
Poland 8,8
Bulgaria 9,6
Estonia 10,4
Hungary 11,8
Slovakia 12,6
Czech Republic 16,2
Cypros 19,9
Slovenia 21,4
Greece 24,1
Italy 28,3
Portugal 29,2
Spain 30,3
Austria 33,6
Netherlands 37
Sweden 37,6
Belgium 39,1
France 41,1
Finland 49,6
Germany 54,8
Ireland 64,7
UK 68,2
Norway 77,1
Denmark 86,1
0 10 20 30 40 50 60 70 80 90 100
Source: Oliver & Ohlbaum performance, own calculations based on national statistics on population collected by
Euromonitor.
The evidence is conclusive: market size does impact the level of provisioning
for originated content. However, there are differences among the small states
and markets in their ability to provision, with the main difference reflected in
per capita figures. The result is not always purely a matter of market econom-
ics, but rather indicates the importance of political choices via the affordance
of subsidy.
Empirical evidence for the four varieties of size

So far we have been able to validate assumed relationships between the con-
tinuous size variables (population and economy) and TV market volume, as
well as the impact on expenditure for originated content. Analysis of smaller
and larger markets reveal differences in levels of available revenue for the
TV market, and how that affects the provision of domestic content. Market
intervention through public subsidy for originated content appears to be quite
important, even crucial, for determining the level of such provision in individual
markets of all countries in Europe, and especially important for smaller market
countries. In this light, public broadcasters arguably have a more significant
role in the markets for securing domestic content right across Europe, which is
only a comparatively large market in the aggregate. The PSB sector functions
74
as a buffer against different modes of market failure, especially in the smaller

markets. What remains to be assessed are varieties of size based on the categori-
sation in our typology (see Table 9 below), with a focus on the extent to which
leverage is different between markets depending of the relative scale of sizes.
Our main point hinges on the factor of market leverage. This is relevant
due to industry conditions where high fixed cost combine with recurring need
for fresh investment in new domestic production. This is where scarcity in the
absolute volume of available talent comes into play because that is a crucial
input for capacity to train creative personnel. Where there is a smaller talent
pool and also a small financial base, this amounts to a double whammy – there
are two scarcities, making the domestic market less commercially viable due
to lack of incentives. Both aspects of market leverage constitute the critical
mass needed to justify joint investments by reducing risk on the one hand and
increasing commercial incentive on the other.
Table 7. Size revisited
Economy
Population Small Large
Small -,- -,+
Large +,- +,+
Source: Own depiction.
In Table 7 we are utilising the four types of size devised for analysis in this
chapter. Each type has different degrees of market leverage. We can concep-
tualise the challenges posed by size based on similarity and difference in the
markets.
• Type 1 markets have smaller populations and poorer economy condi-
tions (-,-). This market type has the lowest potential leverage because the
population is relatively small, which limits potential for spreading costs,
and it has low economy potential due to smaller market volume, which
typically results in less originated content.
• Type 2 markets have smaller populations but richer economy conditions
(-,+). This market type has the same small ‘club’ characteristics as Type 1
markets, but the commercial market potential is greater due to wealthier
economic conditions overall. This condition also enables greater latitude
for political intervention in the provision of subsidy. The economic con-
ditions enhance the potential for originated content.
• Type 3 markets have larger populations with poorer economy conditions
(+,-). This market type has a big ‘club’ to draw on, which enhances po-
tential for commercial investment and public subsidy despite relatively
75
small economies. Typically these markets can provide more originated

content than Type 1 markets, and perhaps as much as Type 2 markets –
although that is not guaranteed.
• Type 4 markets have both larger populations and richer economy condi-
tions (+,+). This market type has a big club and a lot of money, both of
which make such countries highly attractive for commercial investment
and highly enabled to provide public subsidy. As a result they typically
enjoy the most robust market for originated content.
To substantiate the model, I conducted multivariate general linear model analy-
sis using the categorised size variables (POPCAT and ECONCAT) to study the
relationship. This was done on the dependent variables (TV market volume
and expenditure on originated content – EOC). First the multivariate tests
were conducted, followed by the test-between-subjects function and finally
summarising statistics to assess the overall model15. This multivariate general
linear model with economy size (small, large) and population size (small, large)
identified an effect on continuous dependent variables TV market volume and
Expenditure on originated content16. The results indicate an interaction effect
between POPCAT and ECONCAT on TV market volume and expenditure on
originated content17. This indicates that we statistically have identified an effect
of leverage based on the four types proposed in the model.
There is a statistically significant effect in assessing the relative impact of popu-
lation and economy. The respectively large population and economy markets
15. We have identified that size influence TV market volume and the level of expenditure on originated content;
with this we establish categories of small-large interaction between POPCAT and ECONCAT where we intend
to test the influence of size. We have tested the significance of the effects by applying four multivariate tests
on the with-subjects effects to indicate if they are equally rated, this has been done using Wilk’s Lambda
(Λ). All four tests are significant, Λ is significant for POPCAT with a Λ value of .323 and its associated F
and p values, F(2, 21) =22, p < .001, ηP2 = .677 and for ECOCAT with a Λ value of .348 and the associated
values F(2, 21) =19,6, p < .001, ηP2 = .651. On all accounts we can reject the null hypothesis and conclude
that TV MV and EOC change with the size variables. Studying the interaction effects of POPCAT*ECOCAT
we see a Λ of .410 with corresponding F and p values of F(2, 21) =15,1 p < .001, ηP2 = .590. We can reject
the null hypothesis and conclude that there is interaction between the variables as expected by our model.
We have identified effects of the dependent variables on the categorized size variables, and can with this
we can conclude the each effect is significant for the dependent variables and move on the identification
of the effect.
16. The model is significant for the dependent variable TV MV with F(3, 22) =44,9, p < .001, ηP2 = .860 and for
EOC with F(3, 22) =23,8, p < .001, ηP2 = .765. The individual size factors had effects for POPCAT indicated
effects on TVM with F(1, 25) =40,2, p < .001, ηP2 = .646 and for EOC with F(1, 22) =20,0, p < .001, ηP2 =
.476. ECOCAT indicated effects on TVM with F(1, 22) =38,2, p < .001, ηP2 = .635 and for EOC with F(1, 22)
=21,9 p < .001, ηP2 = .499. What is revealed are main effects of the categorized size, which is qualified by
the interactions between POPCAT and ECOCAT on TVMV with F(1, 22) =28,9, p < .001, ηP2 = .568 and for
EOC with F(1, 22) =15,9, p= .001, ηP2 = .421. All interactions have sufficient observed power, understood
as the change of a study having a significant effect, i.e. ≥.80, to ascertain that chances for type II error is
sufficiently low for identifying non-significance by the F test.
17. The partial Eta Squared indicates the degree of variance in the dependents explained by the independents,
meaning that the partial Eta-square figures (ηP2) here is a measure of effect size which for our model of
size indicate a relative strong model fit with adjusted R squares figures respectively for TV MV effect .840
and EOC effect at .733. This indicates that what we have identified is an effect of categorized size variables
and the interaction between the categorized size variables on TV MV and the level of EOC.
76
exhibit higher levels of TV market volume as well as expenditure on originated

content, while respectively small population and economy markets exhibit less
TV market volume and expenditure on originated content. Importantly for the
model, there is a positive and statistically significant interaction effect between
population and economy; the combination affects the scale of TV market volume
and expenditure on originated content. As for the varieties of size, the results show
interaction effects between the categorized size variables. This analysis doesn’t say
which policy solutions are best for which individual markets, of course. That is a
matter for political deliberation and deciding on the basis of social preferences.
It says that all markets are not equal, and strongly refutes the policy preference
currently in vogue that a one-size-fits-all framework is appropriate.
The problem in general lies in the fundamental effects of population size and
economy size. A small market faces different challenges if it must simultaneously
deal with a small population and a small economy, e.g. Latvia. The parameters
and possibilities are quite different from the situation in a large market where
there is simultaneously a big population and a big economy, e.g. Germany.
The degrees of freedom are better for small market countries that have bigger
economies, like Norway. EU policy makers do a grave disservice to the needs
of member states when they fail to properly take into account the comparative
degrees of differences in difficulty in provisioning originated media content
under respective conditions. Of course it is understandable that policy makers
would like to simplify processes and procedures, and that these also simplify
their lives and work. But in fact they have not been elected or nominated to
handle the simple matters. The subsidiarity principle inherently implies that
the simpler things should be handled closer to home. The higher one ascends
in the policymaking apparatus the more complex and complicated the issues
that must be tackled. The desire for simplification is fine to the extent that it is
about ensuring fairness, but it verges on being simple-minded when it results
in policies that demonstrate insensitivity to variance in material conditions, and
limits domestic competence to handle local matters with appropriate sensitivity
to realities on the ground – culturally and socially, as well as economically. An
argument that makes sense for the commercial media sector as a whole or in
a particular type of market environment is not inherently right in all cases or
under every condition. The exercise of wisdom is important to the appropriate
execution of the policymaker’s obligations.
Conclusion
Size has been overlooked, even ignored, as a significant factor for addressing
the challenges that face television markets in Europe (at least, and probably
also beyond). This is a grave oversight in the construction of media policies,
77
especially worrisome because the trends indicate a growing lack of apprecia-

tion for market differences in the drive for market harmonisation. Small and
large states alike face complex challenges in managing as well as developing
television markets, especially in securing adequate provision of originated
content. Whenever the club that is interested in a genre of content or kind
of service is not large enough or rich enough to attract sufficient commercial
investment, it can only be secured by policy intervention. Securing very often
requires subsidy, as the evidence clearly shows in markets of every type and
size. Although media industries are certainly in a period when old business
models aren’t working well and demands for change in the interests of economic
viability are understandable, this does not alter the fact that many and specific
genres are still needed and at a certain quality. This is especially important for
informational and cultural programming that is for smaller groups.
We have tested the influence of size empirically in three ways; first by TV
market volume, secondly by expenditure on originated TV content, and thirdly
by testing the relative importance of size in our four varieties of size. The re-
gression analysis of size on TV market volume revealed a significant statistical
relationship between population and economy in relation to market volume.
This has relevance from a policy perspective. The emphasis in Europe contin-
ues to be based on securing a single market, which emphasises competition
rules. But it’s also the case that European policy is a bit schizophrenic in that
individual member states are supposed to focus on securing media services
that attend to the democratic, cultural and social needs of host societies, but
handling these has often created dilemmas for competition policy.
We also need to keep firmly in mind the fact that European countries are all
relatively small in comparison with the truly big countries, especially the USA.
We must combine all EU member states to only just manage approximate size.
Thus, it is not actually surprising that managing to compete with American
product has required high levels of subsidisation. It’s ironic that such subsidy
would be under attack by commercial operators in Europe when a premise
of Television without Frontiers was to grow European competitiveness with
American media products, given that TWF provided the opening for develop-
ing commercial television in Europe.
The regression analysis revealed a significant statistical relationship between
population and economy size in relation to the level of expenditure on origi-
nated content. In media, everyone helps to pay the cost for content and can
receive some approximately equal amount of the goods. This means, however,
that when there are fewer people to pay for the content then the provision must
either be of smaller scale or at reduced quality. This is the result of non-rivalry
in consumption where the cost of production is independent of consumption. In
this way large markets are more able to provision higher levels of expenditure
on originated content, and at the same time also represent the highest levels of
78
public subsidisation. This is especially evident for the UK and Germany, and
differs quite a lot from markets such as Poland and Romania.
Analysis also revealed the influence of size on the basis of relative impor-
tance as this depends on size variety. We found statistically significant effects
for the categorised size variables on both TV market volume and expenditure
on originated content, and moreover the interaction between the categorised
size variables supported the validity of the proposed model. This suggests
that the most appropriate perspective reckons with distinctive challenges that
respective markets face, in combination with variability in political interest as
expressed by public subsidy and regulatory measures, as well as more general
historic and cultural traditions in these markets. As argued in the introductory
chapter, one size of policy doesn’t fit all size of markets.
Of course TWF (and presumably now also AVMSD) has helped establish
European broadcasting as an integrated market, and this has benefitted the
development of many companies that are able to utilise economies of scale
to function more efficiently. But this has also certainly challenged particular
market types with a level of competition they cannot easily withstand, and in
fact can only cope with adequately by erecting certain barriers of entry. We are
not intending to imply that current European media legislation doesn’t allow
for consideration of distinctive needs of different member state markets. This
is possible for instance under Article 107(3) (d) of the Treaty, which allows
state aid on the basis of cultural considerations, as for instance to promote
cultural diversity. But most often this is not applied to media per se, especially
mass media, which are treated more along the lines of traditional manufactur-
ing and service industries. Taking this into account, then, EU policy has both
merits and de-merits, so to say, which reveals a peculiar kind of schizophrenia
as suggested earlier.
The short conclusion of this chapter is that size matters in defining the
level of market volume and originated content. The tested relationships have
been verified as statistically significant, confirming our hypotheses. We have
also established the importance of subsidised and regulated television markets
for the competitive interests of states faced with significant competition from
external sources. Further, we have substantiated that the four varieties of size
are significant in identifying differences in the interaction of the categorised
size variables. This indicates that when one discusses size he or she should
take into account not only the relative level or population but also the level of
economic development vis a vis per capita purchasing power. Also notable is
that the level of political intervention in media markets clearly impacts the level
of TV market volume and expenditure on originated content through public
subsidy, and that this is especially the case in the economically strong markets.
The model has policy implications for media market regulation. Policymak-
ers should take into account the differences that size make on system param-
79
eters and operational possibilities. The individual state should, from an EU

perspective, be allowed to take into account particularities in their domestic
markets, allowing for more independence in state policy based on material
characteristics. EU media policy has helped establish conditions that have
made it feasible to secure growth across borders, enabling the broadcasting
industry to prosper by utilising economies of scale and scope. That is well
and good. But this does not mean that the interests of big media corporations
are identical with the interests of respective member states. To the contrary,
there are often identified conditions where cultural concerns are opposed to
and by commercial concerns, and where large media corporations deploy
strategies that can be favourable in some cases and detrimental in others.
This, however, requires further research with that particular focus and is not
a topic of investigation in this study. Other chapters in this volume have done
more with that aspect.
As seen in descriptive statistics, US market volume is larger than the com-
bined EU market in terms of available revenue. At the same time, the origi-
nated production in Europe is far more segmented across member states, with
several barriers to entry that hamper efficiency in the smaller markets, and
which must also compete with content produced in the bigger, wealthier Eu-
ropean markets (primarily the UK and Germany). Moreover, the UK also has
commercial PSB operators, i.e., not only the BBC but also Channel 4 and ITV.
For its part, Germany has a robust regional PSB system in ARD. We therefore
need to recognize that Europe doesn’t have one dual system, but rather some
diversity of dual systems.
Finally, the influence of public funding in Europe has secured considerable
originated content in many markets, certainly more evident than what has been
originated by the commercial sector alone. This has been especially significant
in facilitating the potential of the smaller markets to offset challenges keyed
to lack of critical mass. Even for the larger markets, which are still rather small
in comparison to the USA, public subsidy has done much to sustain their pro-
duction industries and to increase the competitiveness of their market – shrill
claims to the contrary not withstanding. The Big 5 markets in Europe represent
the majority of expenditure on originated content (about three-quarters) of the
total18. Thus, it is undeniably the fact that public funding is the cornerstone
for securing originated European content. It’s difficult to see any realistic ‘exit
strategy’ that would not have calamitous affects in the face of increasingly sharp
and effective international competition.
The overall implications of this research can be summarised:
1. Markets are not the same, but rather often quite different due to differences
in domestic conditions. This deeply challenges European legislation to
18. Based on the Oliver & Ohlbaum Associates (2009) analysis.
80
evolve policies that are appropriate for application that properly address
the respective interests of every size of member state.
2. Media companies in bigger states that are able to utilise large market
scale benefits are reaping the benefits of EU policies today, while those
in smaller states are mainly facing keener challenges, especially their PSB
operators. These can’t enjoy the same scale advantages because they are
limited to domestic markets and entrusted with the specific purpose of
securing domestic production.
3. Currently EU media policy mainly benefits member states that have both
large population and economy markets, while member states with small
population and economy markets suffer the most adverse effects of vari-
ous trends, including deregulation and stricter governance on matters of
subsidy.
4. No one-size-fits-all policy is a best option for Europe as a whole because
in matters of media, it is not (and might never be) exclusively a single
market. In media, at least, Europe is a union of numerous single markets,
each with their own distinctive conditions, needs and interests. There
can’t be unity without accommodating diversity.
5. EU media policy that is oriented to benefit the interests of media industry
in larger and wealthier member states will likely have detrimental impact
by limiting the options for smaller state policy responses.
6. Political intervention through public subsidy is of cornerstone importance
for securing domestic production throughout Europe.
7. PSB operators are the best instruments currently available for securing
adequate domestic production in both small and large domestic markets.
There is nothing so far to suggest that PSB is replaceable or substitutable.
8. Key differences between small and large markets are accounted for by
the public media sector because it does the best job of offsetting scarcity.
The question raised in this analysis is whether the media should be treated as
an ‘ordinary business’, no different from industries that toasters or pencils? If the
answer acknowledges there are significant differences, then a one-size policy
is not appropriate for a multi-sized Europe. Personally, the analysis leads me
to conclude that it is far from any ordinary business, despite having business
interests and an important role in business generally. Media are distinctive in
that both market and content good characteristics create imperfect conditions
for competition, and limit investment in original production as a result of un-
certainty of profitability. This is clearly, especially the case in smaller markets.
Political intervention in the European television market is an important remedy
81
to problems in securing adequate originated production, although of course

different conditions warrant different policy strategies and designs.
That there is no one-size-fits-all policy doesn’t mean that member states
should do anything they please; accountability demands transparency and
benefits from constructive friction. The level of originated media content
depends on relative market leverage in combination with the level of public
subsidy and regulatory measures governing the market. While common chal-
lenges based in market and content good characteristics affect large and small
markets similarly, they clearly have different degrees of market leverage. This
analysis provides an empirically based way to perceive size, one that takes into
account the variability of markets as a function of size in various dimensions.
Only considerable qualitative research in each respective market can answer
many of the questions that remain important, which speak importantly to the
reasons, affordances and utilities of domestic arrangements. But this study
takes a good step in establishing the necessity for policy makers to make TV
broadcasting policy that accounts for differences based on size characteristics.
82
Appendix 1A. Public subsidy in millions of euros €
Appendix 1A: Public subsidy in millions of euros € Appendix
83
84
Estonia
Appendix 1B.
Latvia
Lithuania
Slovenia
Cyprus
Bulgaria
Ukraine
Croatia
New Zealand
Ireland
Finland
Romania
Slovakia
Greece
Czech Republic
Advertisement revenue in millions of euros €
Austria
Appendix 1B: Advertisement revenue in millions of euros €
Portugal
Denmark
Turkey
Norway
Switzerland
Sweden
Poland
Hungary
Belgium
Netherlands
Australia
Spain
Canada
Italy
France
Germany
UK
Japan
USA
Appendix 1C. Subscription revenue in million €
Appendix 1C: Subscription revenue in million €
85
Appendix 1D. Total TV market revenue in million €
86
Appendix 1D: Total TV market revenue in million €
Appendix 2C. General linear model Multivariate tests of the relationship between the independent and dependent variables
Partial Eta Noncent. Observed

Effect Value F Hypothesis df Error df Sig. Squared Parameter Power1
Intercept Pillai's Trace ,837 53,864 a 2,000 21,000 ,000 ,837 107,728 1,000
Wilks' Lambda ,163 53,864 a 2,000 21,000 ,000 ,837 107,728 1,000
Hotelling's Trace 5,130 53,864 a 2,000 21,000 ,000 ,837 107,728 1,000
Roy's Largest Root 5,130 53,864 a 2,000 21,000 ,000 ,837 107,728 1,000
POPCAT Pillai's Trace ,677 22,041 a 2,000 21,000 ,000 ,677 43,081 1,000
Wilks' Lambda ,323 22,041 a 2,000 21,000 ,000 ,677 43,081 1,000
a
ECOCAT Pillai's Trace ,652 19,650 2,000 21,000 ,000 ,652 39,300 1,000
Wilks' Lambda ,348 19,650 a 2,000 21,000 ,000 ,652 39,300 1,000
POPCAT
* ECOCAT Pillai's Trace ,590 15,111 a 2,000 21,000 ,000 ,590 30,222 ,997
Wilks' Lambda ,410 15,111 a 2,000 21,000 ,000 ,590 30,222 ,997
Hotelling's Trace 1,439 15,111 a 2,000 21,000 ,000 ,590 30,222 ,997
Roy's Largest Root 1,439 15,111 a 2,000 21,000 ,000 ,590 30,222 ,997
a. Exact statistic / b. Design: Intercept + Size + Size3 + Size * Size3.

1. Computed using alpha = ,05
87
Appendix 2D. General linear model Tests of Between-Subjects Effects
88
Dependent Type III Sum Partial Eta Noncent. Obs.
Source Variable of Squares df Mean Square F Sig. Squared1 Parameter Power2
Corrected Model TV MV 3,078E8 3 1,026E8 44,911 ,000 ,860 134,732 1,000

EOC 2,795E7 3 9306135,604 23,849 ,000 ,765 71,620 1,000
Intercept TV MV 1,947E8 1 1,947E8 85,215 ,000 ,795 85,215 1,000

EOC 1,283E7 1 1,283E7 32,869 ,000 ,599 32,789 1,000
POPCAT TV MV 9,174E7 1 9,174E7 40,160 ,000 ,646 40,160 1,000

EOC 7805551,841 1 7805551,841 20,003 ,000 ,476 20,057 ,990
ECOCAT TV MV 8,735E7 1 8,735E7 38,238 ,000 ,635 38,238 1,000

EOC 8549192,427 1 8549192,427 21,909 ,000 ,499 21,965 ,994
POPCAT * ECOCAT TV MV 6,611E7 1 6,611E7 28,940 ,000 ,568 28,940 ,999

EOC 6237039,250 1 6237039,250 15,984 ,001 ,421 15,929 ,968
Error TV MV 5,026E7 22 2284319,195

EOC 8584641,074 22 390210,958
Total TV MV 5,669E8 26
EOC 5,004E7 26
Corrected Total TV MV 3,580E8 25

EOC 3,650E7 25
1. The partial eta square is a nonlinear similar to the R-square in the regressions above
2. Computed using alpha = ,05
The Socio-Cultural Context
of Broadcasting Markets
John D. Jackson
with
Yon Hsu (on Taiwan), Geoffrey Lealand (on New Zealand),
Brian O’Neill & Michael Foley (on Ireland) & Christian Steininger
(on Austria)
Markets as social institutions vary considerably across national boundaries in
response to the particular historical and socio-cultural contexts in which they
are located. In this respect media markets in relatively small countries may well
develop in response to the dominant social, cultural and economic links with
their larger, more powerful neighbours in addition to local conditions. In the
process public services rest uneasily beside commodity markets such that public
services too are rapidly converted into commodities. Furthermore, broadcast-
ing systems, which are preoccupied with the divergence between market and
non-market goods, are likely to be implicated in negotiations between national
identity and economic imperatives.
Accordingly, broadcasting in small countries, neither more nor less than in
large ones, requires an appreciation of the properties of media as subsystems
within the larger social system of which they are a part. To understand media
systems and their market components in relation to a broader social, political
and cultural framework requires a set of conceptual tools that can capture market
structures and practices as interacting elements within media subsystems, on
the one hand, and in relation to the larger social system on the other. Figure
1 portrays this complexity.
A media subsystem and its composite interacting elements (creators, pro-
viders, markets and receivers) is shaped by and shapes existing political and
legal institutions (the state), socio-cultural and political values (ideology),
and methods of exchange and ways of deploying labour and matériel (the
economy). For example, television and press decisions to select, broadcast and
print certain events over others may strongly influence or be influenced by
political action and public values. However, the representation of broadcasting
organisations as a system can be taken only so far. Implied is the presence of
some system that is established, orderly and predictable. And so it is, but only
in a very limited way. Disorder accompanies order; the urge to rearrange the
relations inherent in the parts and to institute totally new relations is always
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John D. Jackson
Figure 1. The media system as a social institution
• THE STATE • THE

ECONOMY
Providers Markets:
(public & Broadcasting
private): TV, as commodity;
Radio, Internet as public
the Press service
Creators: Receivers:
Journalists, Audience as
Writers, Commodity;
Performers Audience as
citizen
• POLITICAL • SOCIO-
VALUES CULTURAL
VALUES
at hand and constantly seeking to tear apart instituted systems. Providers

compete for audiences construed as commodities in the advertising business.
Journalists seek to control their output but are held back by editorial constraint
prescribed by publishers and owners of media corporations. Community radio
and citizen journalism undermine the hold of corporate and state broadcast-
ers and professional journalism. Social internet sites undermine established
commercial sites. The system, though recognisable as a set of social relations
operating in established economic, political and ideological environments, is
in a constant state of flux.
At a more general level, any one of the major elements may dominate ac-
cording to time, place and circumstance. With respect to circumstance, for
example, the economic element tends to dominate in the organisation of
commercial broadcasting while the state tends to dominate the organisation
of public broadcasting. One might expect that the extent to which a state is
economically and culturally dependent on a neighbouring state will have some
influence on the way in which broadcasting is organised. Media organisations
in a dependent state may well yield to the principal media organisations in
their more powerful neighbouring state.
The objective of this chapter is to explore broadcasting activity with an
emphasis on the socio-cultural context within which media markets develop
in smaller countries. We do not intend to isolate size as an independent vari-
able but rather to seek insights encouraging future comparative analyses both
between small states and between small and large states. Pursuing this objec-
tive requires keeping in mind that the matrix of political, socio-cultural and
90
The Socio-Cultural Context of Broadcasting Markets
economic processes varies from country to country, although the literature does
suggest the possible presence of commonalities among smaller countries in a
variety of size indicators: population, density, geography, or global economic
and political power (Puppis, d’Haenens, Steinmaurer and Künzler 2009).
Addressing the issue of size is the first task. Next we will consider some ty-
pologies used in the literature to examine the political-economy of broadcasting.
This, in turn, provides a baseline for the construction of a model incorporating
the state, the economy and political and social values on the one hand and
selected broadcasting parameters on the other. This produces a heuristic device
that is useful for examining broadcasting systems in five selected states. Table
1 lists the selected states by population size and density. Note the dramatic
differences, but also consider the key similarity among these five states: each
borders a powerful state and each shares a major language with that neighbour.
Table 1. Selected states by population size and density
STATE POPULATION POPULATION DENSITY
Austria 8.4 million 99.8/sq. km.

Canada 33.4 million 3.4/sq. km.1
Ireland 4.2 million 56/sq. km.
New Zealand 4.4 million 16/sq. km.
Taiwan 23.2 million 639/sq. km.
1. The 3.4 individuals per square kilometer cover a vast territory. The Northern regions cover 39% of the area of Ca-
nada but include only 0.3% of the population. The vast majority of Canadians live within 100 kilometers of the United
States border. Canada’s 33 metropolitan census areas, all close to the U.S. border, when combined yield a popula-
tion density of 238 per square kilometer.
In part this selection was made to move beyond the European Union, the set-
ting toward which most studies of small states have, of late, been addressed.
However, the selection was principally influenced by a shared language and
location rather than size per se. The selection was based on the fact that each
faces a large and powerful neighbour, with whom it more or less shares a
common language. Relative rather than absolute size holds when we contrast
Canada to the United States, New Zealand to Australia, Ireland to the United
Kingdom, Austria to Germany and Taiwan to China.
The problem of size

Size matters, as demonstrated in the chapter by Christian Berg. Reviewing
the literature it’s also clear that size has multiple possibilities and dimensions.
Noting that “all small states have common problems”, Thorhallsson (2000: 10)
proposes population size, geographical size, and GDP as characteristics distin-
guishing small from large states. In his study of the media market in Austria,
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John D. Jackson
Steinmaurer opts for relative regional and global political power (Austria vs.
Germany), common language and relative size; Germany is “roughly 10 times
larger” (2009: 78). Grisold compared newspaper markets in Ireland and Aus-
tria and defined small states as those with a “big more powerful neighbour”
where the same language is spoken (1996: 485). In a collection of conference
papers published during the revival of the small states problematique in the
mid-eighties under the title, Small States in Europe and Dependence, numerical
definitions of size were for the most part avoided but the implied definition
points to the significance of dependence (Höll 1983). Steinmaurer (2009) incor-
porates dependence and a common language in his definition of “smallness”.
Thus and apart from sheer size itself, two conditions stand out in the litera-
ture: dependence (economic and/or political) and sharing a language with a
more powerful neighbour (in effect, cultural dependence insofar as language
carries a speaker’s worldview). Our selections for analysis in the present study
(Austria, Canada, Ireland, New Zealand and Taiwan) are all situated in close
proximity to powerful neighbours that share a common language, and each
is at least somewhat economically dependent on that neighbour. The reader
should note that neither Canada nor Taiwan meet the “20 million” threshold
referred to in the introduction to this work. Nevertheless, both, as well as the
remaining three, are small states relative to their immediate neighbour with
whom they share varying but important cultural as well as economic depend-
ence. So even though the numerical threshold is not met in all of our case
study sites, the dynamics and principles for analysis hold for the purposes of
the research reported in this volume.
In search of a model
Keeping in mind that markets are complex social institutions linked to state
bureaucracies and the political and socio-cultural life of societies, models that
take into account – or at least imply – an awareness of such connections are
of keen interest. Colin Leys proposed four elements to assess the politics of
the marketplace: (1) the role of the State; (2) the power of industry associa-
tions and lobbyists; (3) structural power (e.g. the ability of one industry or
cluster of industries to dominate a market); and (4) networks of elites or the
“social embeddedness of the market” in question (2001: 86). Although his
model features no specific reference to small states or broadcasting, it points
to a set of dimensions that reveal key nodes and connections between the
state and economic, political and socio-cultural elements. Three dimensions
of note emerge from this typology: (1) the political, in the sense of the mode
of governance; (2) the economic, in the sense of corporate control of markets;
and (3) the social, in the sense of interlocking elites.
92
Three other works employ models for media analyses in which economic
and political dimensions are brought into play. Picard (1985: 6) used a model
to organise observations on the economics of the press. The five-point model
he proposed focuses on “patterns of intervention [which] presumably reveal
underlying political and economic policies”. In their analysis of non-western
media, Curran and Park (2000:12-13) posed the following questions: “(1) how
do media relate to the power structure of society; (2) what influences the media
and where does control…lie; (3) how has the media influenced society; [and] (4)
what effect has media globalization and new media had…?” To usefully respond
to these questions they constructed a typology keyed to political systems (demo-
cratic or authoritarian) and economic systems (neoliberal or regulated). Hallin
and Mancini (2004: 30-31) proposed an influential heuristic in their comparative
analysis of media systems, suggesting three “models of media systems” that in-
corporate political and economic elements along with methods of governance.
A model proposed
We are inclined to select value orientations that, among other structural elements
of social systems, suggest the presence of a shared symbolic system. This can
be understood as a device for the articulation of general cultural, social and
political traditions with media subsystems (following Parsons 1951: 12). Society-
wide or general value orientations also provide a reference point from which
various parameters of subsystems may be ascertained (Parsons 1961: 38-39;
see also Luhmann 1995: 317-319). Curran and Park (2000) and Picard (1985)
referred to above adopt, in one way or another, political and economic value
orientations as reference points for their analyses. Succinctly put, values lead
to “preferences in choosing between alternatives for action” (Friedrichs 1968:
113; Luhmann 1995: 577). Returning to Figure 1, we require a model that will
permit us to link value orientations at the system level with the parameters of
broadcasting at the subsystem level.
We begin this quest by noting that states have two major functions. First,
the state legitimates society as a whole in the eyes of its population – the com-
posite of its social, cultural, and economic properties as a system. Second, in
capitalist societies the state buttresses markets and capital accumulation with
sector subsidies, bailouts, negotiating trade opportunities, and the like. Public
services, such as health care, transportation and public broadcasting, serve in
turn to help legitimate the state. Negotiating trade pacts, subsidising media
industries and providing a regulatory regime favourable to private broadcast-
ers promote capital accumulation. In any particular country it is a question of
emphasis regarding the relative priorities, and states are challenged with the
need to maintain some balance (often delicate) between the two functions. But
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John D. Jackson
it is certainly true that states do shift emphasis over time and in response to
changing contexts. From a market perspective such a shift may move a society
away from privileging pubic goods and services towards favouring private
goods and services, or vice versa. Private goods and services are relatively
exclusive in the sense that price and disposable income determine access to
a high degree, while public goods and services are relatively inclusive, even
encouraging access for all.
It should be added that legitimation practices indirectly support capital ac-
cumulation. A public health care plan reduces corporate labour costs. American
automotive companies have readily relocated in Canada because, among other
things, these costs are significantly less of a burden under a public system.
And of course actions designed to support capital accumulation may indirectly
contribute to the legitimation function, as well. Private broadcasters that pro-
vide local news and information programming and current affairs talk shows
certainly contribute to the legitimation of their existence and the state.
Following Macpherson (1962) it is useful to note, then, that within a socio-
cultural domain normative emphases may underscore either a possessive indi-
vidualism at the core of accumulation, or a sense of collective responsibility
(stewardship) at the core of societal legitimation. Possessive individualism
highlights the principals of self-reliance, independence and consumption.
Collective responsibility and stewardship flips the coin, placing emphasis on
interdependence, community, and the common weal. Of course, private goods/
public goods and individualism/stewardship are neither polar opposites nor
a dualism. The relation is properly dialectical with the interactive elements
constantly seeking but never reaching any final synthesis.
With all of this in mind, we suggest two types of value orientations, combin-
ing political, economic and social elements:
A Classical Liberal or Neo-conservative orientation in which political values
emphasise capital accumulation; economic emphasis is on private goods
and services with a competitive marketplace economy, and socio-cultural
emphasis is on possessive individualism with a comparatively low value
placed on stewardship.
A Contemporary Liberal or Welfare State orientation in which political values
emphasise legitimation functions; economic emphasis is on public non-market
services and on intervention as an act of stewardship, and socio-cultural em-
phasis is on collective responsibility and a high level of stewardship.
Each type points to an emphasis and should not be understood as an either/
or schema. Moreover, insofar as each type is the antithesis of the other, one
would expect that at any selected time movement would be in one direction
or the other, from one or the other position, straining towards a synthesis –
which will not be finally achieved.
94
Over the last few years Canada, Austria, Ireland and New Zealand show
evidence of moving from an earlier emphasis on a contemporary liberal orien-
tation toward a neo-conservative orientation. In contrast, Taiwan has remained
at the neo-conservative end of the spectrum without evidence of much move-
ment. Taiwan has maintained its social and political distance from China and
consciously opposed socialism along with China’s position on Taiwan’s national
integrity. This demonstrates that the emphasis is never only economic, however
important or bedrock that is to a particular system (such as the USA and the
EU), but always also strongly political and socio-cultural.
The next step is to isolate certain defining characteristics or parameters
of broadcasting to permit linkage between values orientations at the general
systems level and broadcasting at the media subsystem level. The following
are relevant to this inquiry:
•The significance of national identity
•The extent of public funding
•The extent of private or commercial funding
•Regulatory regime bias
Drawing on this, Table 2 points to a set of hypotheses as possible links, and
intended to set a framework in place for evaluating broadcasting in the five
selected countries. In the next section we assess each of the five selected cases
using this framework.
Table 2. Parameters by Value Orientations
Classical Liberal Contemporary Liberal

Broadcasting (“neo-conservative”) (“welfare state”)
Parameters Orientations Orientations
National Identity Low significance High significance
Public Funding Low High

(State funding, licensing) (Audiences as citizens;
stress on national identity)
Private Funding (commercial High Low

support, advertising, market (Audiences as commodities;
shares) stress on consumer identity)
Regulatory Regime Bias Toward Private Broadcasting Toward Public Broadcasting
Austria
In Austria, the mass media are generally subject to a dual regime – a mixture
of economic and constitutional elements – under which the public service
sector is subject to greater traditional, legal regulations and the private sector
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John D. Jackson
to more pointed commercial constraints. Austria’s broadcasting history has

been significantly influenced by Germany, and even more so now as the in-
ternational interdependence of the mass media becomes ever more complex.
The giant-next-door effect means that Germany as the big neighbour transfers
more communications into the smaller state than vice versa (Steininger and
Woelke 2007). This not only characterises the history of the Austrian media
system, but also its media policy. Austria shares a language and a border with
Germany. Not surprisingly, channels broadcasting into Austria from Germany
claim considerable shares of their TV audiences.
The history of media institutions in Austria is discontinuous and has long
been subject to external influences. Saxer (2005) points to four historic factors
as being mainly responsible for this fact: 1) the demise of the Austro-Hungarian
monarchy, 2) monopolisation by the National Socialists, 3) occupation by the
Allies following World War II, and 4) the late national quest for autonomy. The
second half of the twentieth century was characterised by a fossilisation of au-
diovisual policies. Austria reacted to the existence and the resulting dependency
on (among others, German) arbitration outside its own national territory with
an extreme corporate dogma, which favoured audiovisual fossilisation in the
form of a strong, barely challenged, national, public broadcasting monopoly
called ORF (Österreichischer Rundfunk). That ORF has typically acted in ways
that evidence closeness to their government rather than as an independent
media institution deserves notice. While most other West European countries
dualised the domestic broadcasting system, this process has been very slow
in Austria – even resisted as the analysis by Eric Nordahl Svendsen (in this
volume) demonstates.
The first step in opening the Austrian audiovisual market to competition was
taken in 1993 after a verdict by the European Court of Human Rights judged
that ORF, as a monopoly provider, violated the freedom of speech rights as
this is defined in Article 10 of the European Convention on Human Rights. As
a result, regional radio licences were issued. Since the nationwide liberalisation
of broadcasting markets (television since 2001, radio from 1998 onwards), Aus-
trian public broadcasting television (in particular) has been competing against
other Austrian and also German providers, which are completely financed by
advertising and are oriented towards maximising profits. Public broadcasting,
on the other hand, is financed mainly by licence fees but also partly through
advertising.
A public broadcasting company provides services of socio-economic interest
and receives compensation for costs arising from this obligation. But where PSB
also has commercial operations it is for the European Commission to ensure that
the sector does not use the compensation they receive to finance commercial
activities, which adversely affects privately financed providers and distorts mar-
ket competition. Although the structure and remit for public service broadcast-
96
ing is a national competence, as a result of EU membership each broadcasting

company is subject to the broader agreements in the single market definition
of private goods or “economic good” (cf. Steininger and Woelke 2008). Saxer
(2005: 131) describes this tension accurately: “Arguably, the cultural autonomy
of EU members remains unimpaired in regards to the institutional organisation
of their public-service broadcasters. Nonetheless, this autonomy is faced with
an increasing economic counter-weight in the form of EU membership and the
general commercialisation of media systems, in particular.”
The fact that Austria is a small state affects its media system because cross-
border radio and television programmes from Germany are widely available.
Furthermore, as a result of the small domestic market as a whole, audience,
advertising, information and event markets are also small in co-related fashion.
Lower levels of resource availability in capital, know-how and talent pools
are also co-related with small state status. These criteria often cause media in
smaller countries such as Austria to become dependent on decisions in media
policy taken by bigger neighbours. Thus the dependencies accumulate and
deepen the further one goes in analysis.
Canada
Broadcasting began in Canada, as in the United States, as a commercial en-
terprise during the 1920’s. During the late 20’s and into the depression of the
30’s, Canadian political circles increasingly placed a high value on creating
and maintaining a strong national identity relative to the United States – and
the UK. To combat what was becoming an overwhelming onslaught from U.S.
broadcasters, Canadian public broadcasting was established at the local level
in Edmonton and Winnipeg and in a string of local production units across
the country that were owned and operated by the Canadian National Railways
(CNR), a Crown corporation operating stations in Halifax, Montreal, Winnipeg
and Vancouver. The purpose was to provide entertainment and news for their
transcontinental passengers. The CNR operated competitively along-side the
Canadian Pacific Railway, a privately owned corporation. This points to a
characteristic feature of the Canadian social system: there has always been a
private / public mix inscribing “National Policy” since the country’s Confedera-
tion in 1867. Public or Crown Corporations were common in transportation,
communications and resource extraction.
Political values embedded in the National Policy stressed legitimation func-
tions as Canada acted to define its self as a distinctive nation vis-à-vis the large
neighbour influences of the United States. Simultaneously national policies in
transportation, financial services, communications and immigration acted to
link resources mainly situated in the western provinces with manufacturing
mainly located in eastern provinces in lieu of powerful north/south economic
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John D. Jackson
ties with the United States. As for broadcasting, private and public broadcasting
continue to exist side by side in a state of constant tension.
The Canadian Radio/Television Commission [CRTC] is the regulatory agency,
and is ultimately responsible to Parliament. Broadcasting regulations have
assumed that frequencies are public property, and that controls should be
applied to public and private broadcasters alike. Regulations have intended
to incorporate private broadcasters in the national identity project assigned to
broadcasting overall, and especially the public provider. Thus, regulations also
encourage Canadian production and dissemination.
Between 1930-1932 the formation of a national public broadcaster created
tension between regional and national interests. A newly chartered Canadian
Broadcasting Company [CBC] absorbed the former CNR local stations along
with established provincial public broadcasters in western Canada. This tension
has persisted as CBC policy constantly shifted interests away from and then
back to regional broadcasting. Private broadcasters have tended to occupy
the regional vacuum, although this is becoming more problematic in a current
battle for control between cable, satellite and over-air broadcasters. Another
tension, common to any Canada-wide project was between Québec (French
language dominant) and the rest of Canada (English language dominant). This
tension was resolved early on with the creation of two language services: the
CBC (English) and the Société Radio Canada (SRC), each one broadcasting
across the country.
More recently three provincial public broadcasters have entered the scene:
Télé-Québec, TV Ontario and The Knowledge Network (British Columbia).
All three feature a mixed funding model, being supported by Provincial gov-
ernment financing, direct public support and some discreet advertising. The
CBC/SRC is a Crown corporation reporting to Parliament and supported by
Federal funds and advertising. During the 2008-2009 year the parliamentary
appropriations amounted to 60% of revenues and advertising accounted for
20%. The remaining 20% came from a variety of other services. The advertising
revenue budget was down considerably as a result of the 2007-2008 recession
that has led to severe cost cutting and the insertion of more American prime
time programs in the TV line-up.1
Canada’s 33.4 million people are mainly located along the border with the
United States with a population of 309.2 million. Of course the two countries
share a common language (with the exception of Québec where its language
affords some protection for both media and cultural agencies). The USA is
the largest producer of media products in English and Canadians have always
had ready access to most of that – and for which they have tended to show
some preference. Public broadcasting, along with other national projects in
film and music, were created to slow the pace of what was considered an
1. See, www.cbc.radio-canada/annualreports/2008-2009 accessed 14 June 2010.
98
advancing cultural juggernaut from the south. But the competition is by no

means all from the USA. Domestically the CBC faces large commercial media
corporations with international reach: CanWest (currently selling national and
overseas assets under bankruptcy control), BCE, TorStar, Shaw, Rogers, BCE
and Québecor – variously operating cable and satellite services, TV and radio
stations, newspapers, publishing houses and digital services.
Canadian content regulations apply to radio and television. Media programme
subsidies (Canadian Media Fund) and foreign ownership regulations are the ma-
jor weapons used to battle against US media encroachment. The current content
requirement is 55%, but reduced from an earlier 60%. There are concerns that
the present move by the Federal Government to liberalise foreign ownership
rules in the telecom sector will spread to the broadcasting sector. Overall, there
is slippage toward deregulation and a reduction of support for the CBC and
cultural activities in general. Globalization of media organizations, the rapidly
increasing improvement in and use of digital technologies, and threats made
within the rules of the North American Free Trade Agreement [NAFTA] all serve
to put institutional attempts to apply national controls on the Canadian media
market in jeopardy. The slippage toward neo-conservatism has quickened the
pace toward a collapse of distinctively Canadian media systems.
Ireland
Ireland’s small nation status has been a major factor in the development of its
media system. Its size and relatively open society character, however, does not
mean that Ireland’s media organisation is defined only through dependence
on larger, more dominant structures. A number of counter strategies illustrate
patterns of integration at a transnational level that cut across the traditional
notion of dominance and dependence.
Historically, Ireland is overshadowed by United Kingdom, its big neighbour
with a population of 61.3 million. Six of the 32 counties on the island of Ireland
are within the United Kingdom, and have a devolved government and a differ-
ent legal and regulatory environment for media compared with the Republic of
Ireland. The official language is Irish, or Gaeilge. However, the country is practi-
cally, predominantly English-speaking. English is the language of all mainstream
media and daily affairs and Irish is only spoken as an everyday language by
a small number of communities along the west coast. Government-supported
initiatives have led to an increase in support for the language in education,
in government, and in the media, and a number of important national media
services are now available in the Irish language.
Despite proximity to the United Kingdom with its large, complex and mature
media environment, arguably ranking second globally after the USA, Ireland re-
tains a prosperous and (for its size) diverse media market. Ireland’s public service
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John D. Jackson
broadcaster, Radio Telifis Éireann [RTÉ], has dominated broadcasting in Ireland

since the 1920s. Even in today’s more competitive environment it continues to
do so. It has mixed funding with a license fee and advertising. RTÉ operates
two national television services: RTÉ 1 and 2. There is a third public service
broadcasting channel in the Irish-language called Telefís na Gaeilge [TG4]. Apart
from the public service broadcaster, TG4, indigenous competition for RTÉ televi-
sion comes from TV3, a private, commercial, and generalist television channel.
The year 2006 saw the start up of three additional commercial television
channels: 1) a sports channel; 2) a general entertainment channel, Channel 6,
which has since been re-branded by its parent company TV3 as 3e; and 3) the
Dublin City Channel, on cable television. They have since been joined by other
‘city’ channels for Cork, Galway and Waterford. Three community channels have
also been licensed. In total the regulator has licensed 14 television services. Even
before RTÉ television was established in 1960, people living on the east coast
of Ireland or near the border with Northern Ireland were able to receive British
television, especially the BBC. In terms of channel share of viewing, in 2009
the two RTÉ channels were the most popular with close to a 40% market share.
The competitive environment in which national television operates is made
all the more complex with the growth of digital services and the impending
switchover to digital transmission (Corcoran 2002). Dependence on external
service providers to launch digital television services has been a concern in
Irish broadcasting policy. The market has moved rapidly towards the uptake
of digital platforms, which in Ireland has meant cable and satellite operators.
RTÉ will operate a national multiplex for digital terrestrial television from 2010,
but in a market where commercial rivals have already spent years building
market share. This obviously puts the national broadcaster in a compromised
position in the emerging digital media space.
To the extent that it has been formalised in legislation and pursued through
government and regulatory initiatives, Irish media policy has been concerned
with the development of the sector, largely through the growth of the private
independent sector, while ensuring that Irish broadcasting services were the
preferred option for Irish viewers and listeners. Regulatory, licensing and
spectrum planning arrangements have for over twenty years been geared to
the development of a healthy, commercially-funded local radio industry, first,
followed by the introduction of national and local television services to comple-
ment the historically dominant public service broadcaster (Spaink et al 2004).
Media policy since the late 1980s has been characterised by a strong belief in
the market and, at times, an uneasy relationship between the national public
broadcaster and a government keen to reduce its influence.
Late in 2009 the new Broadcasting Act came into force. It established the new
Broadcasting Authority of Ireland that has replaced the previous Broadcasting
Commission of Ireland, hitherto responsible for licensing independent commer-
100
cial radio and television. The new authority is responsible for all broadcasting,
including RTÉ. It will license independent, commercial broadcasters, examine
ownership issues, and manage a complaints procedure. However it is its role
in public service broadcasting that has caused the most controversy. There is
concern that the new Authority, heir to a previous regulator that never had a
public service remit of any kind, has now assumed such control over the sector
as a whole. There are fears of a far more constrained role for public broadcasting.
New Zealand
The short history of this small South Pacific nation has generated a highly
complex situation in media industries, broadcasting in particular. What has
happened here is both an echo of wider trends and a prefiguring of shifts and
re-alignments in other parts of the world. It has also been keen on develop-
ing strategies and structures that can rightly be considered as local solutions
to local problems.
In the nineteenth century New Zealand was widely regarded as ‘the social
laboratory of the world’ at the vanguard of policy (social welfare) and emanci-
pation. New Zealand is famously the first country to give women the vote. In
the late twentieth century and into the twenty-first century, New Zealand can
no longer be regarded as such a shining example of social progressiveness,
although some exception is perhaps in order for its anti-nuclear and immigra-
tion policies. But New Zealand has embraced with enthusiasm an ideology of
change many would regard as anti-progressive.
This shift is particularly visible with respect to the ownership and purpose
of media in this society. The deregulation and over-heated free market ideol-
ogy of the 1990s accelerated a situation where the New Zealand broadcasting
environment was declared “the most deregulated in the world…extremely per-
missive by world standards”.2 In fact a primary characteristic of New Zealand
broadcasting is regular and relentless change. Indeed, such inconstancy can
be regarded as a constant.
Unfortunately poor decision-making has also been a constant. In 1998, for
example, Television New Zealand sold its Natural History production house
to Twentieth Century Fox, a subsidiary of the News Corp global empire. In
the ensuing years, Natural History New Zealand has grown into a globally-
oriented and highly profitable enterprise with annual profits exceeding those
of Television New Zealand [TVNZ] in 2009.This was not a rare example of
poor decision-making; there have been many others in the past twenty years
as broadcasting (television, in particular) has lurched between the poles of
unabashed commercialism and an older public service ethos.
2. A New Broadcasting Policy for New Zealand. A discussion paper published by the Screen Producers and
Directors Association. Wellington, July 1966, 6.
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John D. Jackson
Despite inconstancy, there has always been a case for mixed television in
New Zealand. From the earliest days of New Zealand television (the 50th an-
niversary of the first official transmission was June 2010), one finds a balancing
act between a fee-based funding model (annual license fee) and a commer-
cial model (advertising) characteristic of the system. In subsequent decades
funding of television increasingly gravitated towards commercial imperatives
with TVNZ now receiving over 90% of its revenue from advertising, and thus
competing for this income with private, commercial free-to-air [FTA] channels
and the dominant pay-TV Sky service.
In 2010 New Zealand has a particular and quite peculiar mix of television
structures. There are residual elements of public broadcasting objectives in
the state-owned TVNZ with its two channels, but because it is also desig-
nated a Crown-Owned Company [CROC], it is obliged to return a healthy
annual dividend to the government. The three-term Labour administration
(1999-2009) attempted to shift the company back to clearer public service
objectives, which included introducing the TVNZ Charter. But with the return
of a right-leaning National/ACT/Maori Party coalition in November 2009 the
Charter was abandoned and commercial imperatives again hold sway. As
Peter Thompson explains, “as TVNZ’s failure to deliver its public Charter
outcomes while depending on commercial revenue for 90% of its income
demonstrates, commercial broadcasters operate under significant constraints
that make the delivery of quality content and public service largely impos-
sible” (Thompson 2010).
Sky Network Television, the dominant pay-TV provider, now reaches 46%
of New Zealand households, with up to a quarter share of the total audience.
There is another connection to News Corp in that it owns 44% of the majority
shareholder, Independent News Limited. And so it owns rights to premium
sports events (rugby, in particular) and has extended its hold on the New
Zealand mediascape through the acquisition of the FTA channel called Prime.
Other FTA channels have been bought and sold by overseas interests, with G.R.
Holdings from the UK acquiring a majority ownership in TV3 and C4 recently.
This mix of channels (Sky provides more than 80 pay channels) struggles for
audience in a population of just over four million New Zealanders, and in a
market where advertising revenue is in a slump due to the combined effects
of a global recession and competition from other media.
That’s the bad news. The good news is that the decline in television viewing
for FTA channels has flattened and, in some cases, viewing has increased. The
two-channel FTA Maori Television Service, which might properly be called a
public service provider, is funded by the state with a modicum of advertising.
It continues to attract respectable audience shares and critical approval for in-
novative programming and language support. Locally produced drama series
such as Outrageous Fortune (also sold as a format to the USA and the UK), and
102
serial dramas such as Shortland Street, together with news and current affairs,
continue to dominate ratings for FTA television.
The two Freeview channels, TVNZ6 and TVNZ7, continue to attract dis-
criminating audiences with their mix of locally produced content and overseas
documentaries, although there is uncertainty about their state-derived fund-
ing beyond 2012. The funding agency New Zealand On Air continues to play
a critical role in funding vulnerable genres (children’s, special interest, and
documentaries) for the local market, receiving $NZ127 million in 2008-2009,
and allocating 64% of this to television productions. On a smaller scale another
funding agency, Te Mangai Paho, allocates up to $NZ20 million annually spe-
cifically for Maori language or Maori interest programming.
These agencies and interventions can be regarded as attempts to ameliorate
the real or perceived shortcomings of a totally commercial television system.
New Zealand On Air is a residual safeguard put in place at a time when de-
regulation of broadcasting hit its stride. The others are more recent additions
to the mediascape and largely put in place during the period when there was
a more public service-friendly government. But given that every new govern-
ment has chosen to reshape broadcasting according to its own philosophy (or
ideology), with TVNZ usually being the sacrificial victim, television in New
Zealand faces more changes. The current government has declared that TVNZ
will not be sold off in the current term (until November 2012), but has been
noticeably silent about what might happen if they get elected for another term.
Taiwan
Taiwan is located close to the People’s Republic of China, one of the largest
countries in the world, and shares Mandarin as the official language. Under the
“one China policy” Taiwan is not recognised as a fully-fledged independent
nation-state, nor does it have a seat in the United Nations. Being positioned
by the Chinese government as a renegade province, Taiwan is constantly mar-
ginalised in diplomacy. Its peripheral status further singles out its ‘smallness’
in international politics.
Taiwan is nevertheless an island that heavily depends on international trade
and has established itself as one of the newly industrialised, semi-peripheral
countries. In addition, Taiwanese investors have profited from the geographical,
cultural and linguistic proximity to China and have played a key role in leading
China into the world of capitalism. Nonetheless, although financial, human, and
technological resources are being transferred from Taiwan to China, Taiwan
fears that China threatens its competitive edge in the global economy. Finally,
and importantly, as long as China does not relinquish its policy of invading Tai-
wan as a final solution to political division, it must remain a military threat and
considered as a potential enemy. It was only in 2008 that direct links for postal
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John D. Jackson
services, transportation, and telecommunications were established between the

two sides. At the point of this writing, no direct broadcasting channels are yet
open except in limited and controlled places like hotels where Chinese tourists
stay in Taiwan, or in Taiwanese investors’ private homes in China.
This is the complex background against which the Taiwanese people ar-
ticulate questions about Chinese cultural affinity or encroachment via media
channels and products. First, Taiwanese broadcasting policy in relation to China
largely depends on the leading political parties’ view of the neighbouring power.
Under the leadership of the Democratic Progressive Party [DPP] (2000-2008)
China was imagined as the foe. The DPP stressed Taiwan’s autonomy, and
inclined toward both de facto and de jure Taiwanese independence. Coupled
with the fear of political and military encroachments, the DPP antagonised
China’s paternalistic, nationalist outlook. Consequently, the DPP did not per-
mit the entrance of Phoenix satellite TV into Taiwan. This Hong-Kong based
company, partially owned by News Corp, developed an affinity with Chinese
political leaders and its programming is popular in China.
Taiwan was earlier able to view broadcasting from a Chinese Central Televi-
sion [CCTV] satellite channel geared to overseas markets. Under DPP leadership
this channel, which broadcast in English, gradually disappeared from much of
Taiwanese cable programming. The DPP equally imagined China as an oppo-
nent in the satellite broadcasting market. Chien-San Feng (2007) pointed out
that the DPP government was eager to establish a competitive English-language
channel, Taiwan Macroview TV (Taiwan Mac), for international audiences in
order to showcase Taiwan. Legislators vetoed the idea because the proposed
budget for this non-Chinese channel was more than double that of the public
broadcaster, Taiwan Public Television Service [TPS].
Tensions across the Taiwan Strait have softened since the Kumingtang [KMT]
party was returned to power in a 2008 election. As KMT takes a friendlier
approach to China, dialogue has been re-established and negotiations about
mutual broadcasting are now on the table. Despite the fact that most Taiwanese
media owners are eager to establish access to the enormous population and
markets in China, no concrete agreement has been reached as yet. Regardless
of changes in official policy, non-official exchanges and media co-production
in financial, human and technological resources, ranging from soap operas,
popular songs and cinema, to large media events, are taking place. In these
cases self-censorship is imposed on both sides to avoid government interven-
tion. Bypassing political and ideological issues also maximises market potential.
Media products that circulate across the Taiwan Strait are meant to entertain,
and engage audiences as consumers, not as citizens.
Commercial interests and entertainment programming are not only peculiar
to media products circulated across the Taiwan Strait, however, but have been
a primary consideration for domestic channels since the debut of Taiwanese
104
broadcasting history in the 1960s. Lee Chin Chuan (2004) argued that there
existed a strong bureaucratic-commercial complex characterised by entertain-
ment programming for profit, and by media discourse control, language use
and ideology was established for maintaining the status quo of the authoritarian
regime and state-capitalist development. Twenty-five years of democratic struggle
helped to free broadcasting channels, however, and various television and radio
stations are now more inclined towards different political parties and views.
But over the past two decades an excessive neo-conservatism has also
marked the Taiwanese broadcasting system. Public broadcasting is margin-
alised in Taiwan. Since its establishment in 1999 the TPS has received only a
very limited budget of less than $50 million USD to serve a population of 23
million. In contrast, the Canadian public broadcasting budget is $540 million
USD to serve a population of 30 million Canadians. A recent regrouping of
public broadcasting channels combined the original TPS, Taiwan Indigenous
TV [TITV], Hakka TV, Taiwan Mac, and CTS. While the TPS continues to re-
ceive $50 million USD per year, the TITV, Hakka, and Taiwan Mac receive a
total budget of $76 million USD. Legislators in Taiwan do not support budget
increases or license fees to maintain the public broadcasting system. While be-
ing underfunded, government agencies are responsible for indigenous, Hakka
and overseas Chinese affairs.
Conclusion
We set out to demonstrate that broadcasting markets in relatively small and
dependent states develop their systemic properties not only with regard to
local conditions, but also in response to the social, cultural and economic ties
they have with larger, more powerful neighbours as a feature of these condi-
tions. Size was defined in terms of dependency in three dimensions, political,
economic and cultural. We took markets to be one element in a complex of
interacting elements within media subsystems. Our decision to use depend-
ency as a selective device was not investigated as a variable but rather as a
way to examine certain properties within and between selected small coun-
tries – Austria, Canada, Ireland, New Zealand and Taiwan, each of which has
been shown to be more or less dependent upon a proximate, more powerful
neighbour with whom they share a common language.
Austria, Ireland and New Zealand are small by any definition; Canada and
Taiwan are larger but all five are clearly dependent states. All are struggling
with the public/private broadcasting balance in situations where public broad-
casting acquires a national identity function relative to powerful neighbours.
Private broadcasting does assume public service and identity functions, but in
the main it acts as a major carrier of programming from each state’s powerful
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John D. Jackson
neighbour. This is the case with Austria, Canada and Ireland. New Zealanders do
not appear to rely as heavily on their closest foreign broadcaster for information
and entertainment. However, similar to the others, New Zealand broadcasting
continues to respond to global socio-economic forces. Taiwan too is responding
to global forces, but contrary to the other four cases its antagonistic/dependent
relation with mainly China has yielded a highly protective system.
Our story is one of states struggling to offset the heavy media hand of their
immediate neighbours, as well as global political and economic forces. Media
organisation in Austria responded to the national socialist movement and later
Allied occupation during the 40’s; Canada responded to its divorce from British
influence at the end of World War I and its subsequent quest to differentiate
itself from the United States; Ireland responded to its long history of conflict
with Britain; New Zealand is constantly in the shadow of Australia, the UK
and the United States; and Taiwan’s situation indicates a complicated set of
factors that on the one hand leads to an attempt to distance itself from China’s
socialism to seek universal recognition as a sovereign, independent nation,
while at the same time the importance of trade, culture and political relations
with China create considerable complexity.
We began our analysis with an elaboration of the proposition that broadcast-
ing in small and large countries alike requires an appreciation of the organisation
of media as subsystems within a larger social system of which they are a part.
Providers, creators, receivers and markets are subject to interactive elements
of media subsystems. In turn, media subsystems interact with the state, the
economy, and political and socio-cultural values as determinant elements in a
comprehensive social system. With this in mind we advanced two types of value
orientations – the classical liberal or neo-conservative set and the contemporary
liberal or welfare state set – to summarise and capture the elements of larger
social systems. The next step was to propose a set of broadcasting parameters
as a way of capturing media subsystems. This yielded a cross-classification of
value orientations and broadcasting parameters, generating a set of hypotheses
designed to explore changes in broadcasting as a consequence of changes in
overall social systems.
Regarding value orientations, Canada and Austria, the former under the
influence of the NAFTA and the latter under the influence of the EU, show a
decided move toward neo-conservative value orientations. Ireland, also within
the European Union, demonstrates a similar trend, even more pronounced.
New Zealand exhibits a pattern of see sawing back and forth, but tends overall
toward the neo-conservative. Taiwan is solidly located in the neo-conservative
paradigm.
International trade pacts moved Canada, Austria and Ireland toward neo-
conservative positions such that these three not only respond to powerful
neighbours, but to global economic and political forces as well. International in-
106
terdependence in media and programme markets are becoming more prominent

and complex. Taiwan’s media policies respond rather quickly to party changes
in government, and it is much the same in New Zealand. Taiwanese policy is
strongly tilted toward preventing media dominance by China. New Zealand, like
Austria, Canada and Ireland, is sensitive to global economic and political changes,
though much less than the former three to its larger neighbour. Following our
brief coverage of each of the selected states, we might explore the extent to
which we can elaborate or, perhaps, reject the hypotheses proposed in Table 2.
National identity
Within the framework of neo-conservative value orientations, commercial
broadcasting may be viewed as economic activity in the “national interest”.
But this must be also understood in contrast to broadcasting as a mechanism
for creating and enhancing particular national cultures where policy decisions
may well run contrary to commercial interests. The definition of broadcasting
as a “heritage institution”, as part of the creative activity of a people, is more
likely to occur under contemporary liberal orientations. We see this at work
at several levels among our selected countries. Both Ireland and Austria find
themselves immersed in controversies with the EU over a conflict of defini-
tions: is broadcasting a commercial enterprise or a national cultural institution?
Canada as a NAFTA member finds itself in a similar position.
This drift toward broadcasting as solely a commercial activity is not entirely
due to outside pressures. Internal changes in orientations are evident in each
of the selected states and that supports drifting toward the commercial impera-
tive. The tension between national identity and commercial objectives is in fact
a constant in all five selections. Internal changes in value orientations since
the 1990’s have led to a shift away from national, cultural objectives toward
commercial objectives in four of the five selections. Taiwan is the exception.
Moreover, Austria, Canada, and Ireland experienced heavy use of channels
originating from big neighbours across their respective borders, further weak-
ening national identity objectives. New Zealand broadcasting, though less
impacted by its neighbour, defined its broadcasting industry as an instrument
for national cultural identity. The degree to which that has been maintained
is open to debate. Taiwan is an interesting exception. The hostile relations
between Taiwan and China have acted as the major force shaping broadcasting
policy, combined with a marginalisation of public broadcasting.
Private/public funding
Advertising has always been the major source of revenue for commercial
broadcasters, and is now becoming an important source for public broadcasters.
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John D. Jackson
This is a significant change; one that began in earnest during the 1990’s and
has continued into the present with increasing emphasis. Governments began
reducing their support of public broadcasting as the shift from contemporary
liberal to neo-conservative values gained momentum. The significance of the
shift is readily observed in changes in audience perception. The reliance on
ratings as the primary basis for determining both policy and programming
changes the perceptions of audiences from that of citizen to that of commodity.
Regulatory bias and discourse

The regulatory regime in four of the five selections, Taiwan again the excep-
tion, suggests some resistance to the effects of changes in value orientations.
Indeed, in all five cases regulations have tended to direct broadcasting policies
toward issues of national identity while simultaneously slowly moving toward
a concept of “free competition”. Although it is important to observe that here,
too, new regulations have tended to favour the private sector and, to some
extent, forced the public sector to assume the role of competitor. Phrases like
“national identity”, “national institutions”, and “national culture” are less heard
today than “competition”, “advertising” and “ratings”. Global corporations have
become significant actors in broadcasting nearly everywhere, in many cases
the dominant actors.
Concluding comment
The selected countries all exhibited commonalities arising from their economic
and cultural dependence on larger neighbours and/or transnational trends
in policy or industry. Each responded with a regulatory regime designed to
maintain control and reinforce national identity. In these cases broadcasting
regulations are relational; that is, in addition to responding to local political/
cultural/social value orientations, they were designed to address cultural in-
trusion from their neighbours. Broadcasting in relatively small and dependent
countries is responding to at least two, and in some cases three, larger systems:
their proximate larger and more powerful neighbour just across the border (all
five selections in varying degrees); international trade pacts (Austria, Canada
and Ireland); and internal shifts in value orientations. From the perspective
of broadcasting policy design, all three lines of dependency deserve deeper
consideration and need to be addressed.
108
Structure and Dynamics
The Television Broadcasting Industry
in Smaller Countries
Josef Trappel
This chapter examines structural conditions and the performance of television

broadcasters in smaller countries. We argue that television broadcasters in
smaller countries have fewer business options than their counterparts in larger
countries. These restrictions affect their resources in terms of finances and
personnel, and restrict their room of manoeuvre with regard to programming
options. In smaller countries this industry is significantly similar to characteristics
that describe highly concentrated media markets. The argument follows from the
essential fact that smaller television broadcasters are confronted with economies
of scale problems and, as a consequence, with conditions of vulnerability and
dependency. The chapter ends in proposing areas of television governance in
which smaller countries require different rules than those generally considered
appropriate in larger countries.
Four structural specificities in the TV broadcasting industry

The options for selection are nearly overwhelming when checking into any
decent hotel and turning on the television. In many places there are literally
hundreds of channels at the traveller’s disposal, most comprising an array of
internationally recognised brands including BBC World, CNN International, Al
Jazeera, CNBC, and more just among news channels, let alone all the other
genres. Depending on the country, there are likely to be television channels
in diverse languages to serve the preferences of particular travellers, as well
as numerous channels of local origin. It is fair to say that in general there is
abundance in the television supply available nearly everywhere, regardless of
country size. The market in provides more choice than any individual consumer
could use, or digest.
What the traveller cannot see – what needs additional information – is the
industry structure behind and underneath the visible screen. Hotel television
109
Josef Trappel
doesn’t typically reflect the national broadcasting landscape to any extend

that we could consider a valid, reliable indication of local conditions. Rather it
reflects some selected package of channels delivered mainly by satellite and/
or cable systems. The national television supply is always much narrower and
is determined by industry structures. To better understand the differences in
national television landscapes, and respective domestic constraints, it is neces-
sary to examine industry structures and their dynamics.
A quick and naïve look at the numbers of television channels available in
various countries will not suffice for usefully understanding the broadcasting
landscape. At first sight, the number of television channels is evidently quite
high, even spectacularly so, regardless of the size of the country under obser-
vation. When all television stations are taken together – national, regional and
local, general interest and special interest – a diverse picture emerges in many
countries. Table 1 shows selected smaller and larger countries in Europe and
lists main and secondary television channels, both public service and private
commercial. In most of the western European countries, one of the main public
service television channels is in the market leading position, exceptions are
French Wallonia (Belgium), Portugal, Spain and Sweden. In Sweden, however,
SVT 1 attracted almost as much audience than market leader TV 4 (2008). In
most of the Central and Eastern European countries listed in the table, private
commercial television channels are in the leading position, Poland being the
exception to the rule.
There is no evident difference between East and West, or between smaller
and larger countries, in the overall number of available television channels.
With three exceptions, public service and private commercial television broad-
casters of reasonable size (meaning with a market share of 10% or more) are
competing. Regarding the exception, there are no private commercial television
broadcasters with a reasonable market share competing with the public service
broadcaster in Austria, Ireland and Switzerland (Denmark being a case apart).
This is not a coincidence. Each of these countries share a language with a big
neighbour and channel spill over (in some cases also targeting) from abroad
is high in their respective audience ratings.
Moreover, in all the sampled countries except Ireland there is a large number
of secondary channels and highly diverse audiences or ‘target groups’. We find
that public service channels often mainly provide general interest programmes
for regional audiences, and that a multitude of private television broadcasters
address local and regional audiences with special interest programmes (sports,
news, children, adult, business, entertainment, fashion/lifestyle, to name a few).
Many secondary television channels are very small and plenty are available
only via the internet.
Digital technologies provide for higher efficiency in spectrum usage and
DVB-T, DVB-S and DVB-C (digital video broadcasting terrestrial, via satellite
110
Table 1. Number of television channels in selected smaller and larger countries

(2008)
Popu- Main* Main* private Secondary*

Smaller lation public service commercial Secondary* public private commercial
countries (mio) channels channels service channels channels
Austria 9.4 ORF 1, ORF 2 none ORF Sport Plus, ORF > 25; i.a. ATV, Puls
1 HD 4, Servus TV, Sky
(pay), regional
channels
Belgium 10.8 VRT Eén VTM Ketnet > 25; i.a. Prime, TV
RTBF La Une RTL-TVI RTBF La Deux Brussel, Tele Bruxel-
les, VT4, regional
channels
Bulgaria 7.6 BNT 1 bTV BNT Sat, regional > 25; i.a. TV 3, TV 7,
Nova TV public service regional channels
channels
Czech 10.5 Czech TV 1 Nova TV CT 4 Sport > 25; i.a. Nova

Republic Prima TV CT 24 (news) Sport, Nova
Cinema, Prima
Cool, R1
Denmark 5.5 TV 2 none (plans) DR K, DR > 25;

DR 1 HD, DR Romasjang i.a. TV 3, TV3+,
Kanal 5
Finland 5.3 YLE TV 1 MTV 3 YLE Teema, > 25;

YLE TV 2 YLE FST 5 i.a. Nelonen, Sub,
JIM
Hungary 10.0 M1 RTL Klub M2 > 25;

TV 2 Duna TV i.a. Mindig TV
Ireland 4.5 RTÉ 1, RTÉ 2, none TG 4, RTE < 25; Setanta

RTÉ 3 News now Sports, 3e, regional
channels
Nether- 16.5 Ned 1 RTL 4, SBS 6 Ned 2, Ned 3; 12 > 25; i.a. NET5, RTL7,
lands digital special- RTL5, Veronica,
interest channels Misdaated
Portugal 10.6 RTP 1 TVI, SIC RTP 2, RTP N, RTP > 25; i.a. Sport TV,
internacional TV1 24, SIC Noticias
Slovak 5.4 STV 1 TV Markiza, STV 2, STV 3 > 25; i.a. TA3, Joj
Republic TV Joj Plus, regional
channels
Slovenia 2.0 TVS 1 Pop TV, i.a. regional public > 25; i.a. TV 3, Info
Kanal A service channels TV, PeTV, Pop TV,
regional channels
Sweden 9.3 SVT 1, SVT 2 TV 4 SVT Extra, SVT HD, > 25; i.a. TV3, TV6,
SVT World, SVTB Kanal 5, Canal+
(pay)
Switzerland 7.3 SF 1, TSR 1, none SF info > 25;

TSI 1 i.a. 3+, Tele Züri,
Teleclub (pay)
111
Josef Trappel
Table 1. Cont.
Popu- Main* Main* private Secondary*

Larger- lation public service commercial Secondary* public private commercial
countries (mio) channels channels service channels channels
France 64.4 France 2 TF1 France 24 > 25; i.a. Canal+
France 3 M6 (pay), TMC, W9,
Gulli
Germany 82.2 ARD, ZDF RTL, Sat 1, regional public > 25;
ProSieben service channels i.a. VOX, n-TV, N24,
Sky (pay)
Italy 60.0 RAI Uno, RAI Canale 5 Raitalia, RAI 4, RAI > 25;
Due, RAI Tre Italia 1, Storia, RAI Scuola Sky Italia (pay),
Rete 4 La 7
Poland 38.1 TVP1, TVP2 TVN, Polsat i.a. TVP Sport, TVP > 25;
HD, TVP Info i.a. Canal+ Polska,
Polsat
Romania 21.5 none Pro TV TVR 1, TVR 2, TVR > 25; i.a. Antena 1,
Info Acasa TV, Realita-
tea TV
Spain 45.8 TVE Telecinco TVE La 2 > 25; i.a.Cuatro,

La Primera Antena 3 La Sexta, regional
channels
United 61.6 BBC 1 ITV 1, Sky i.a. BBC 2, BBC 3, > 25; i.a. ITV 2, ITV3,
Kingdom Channel 4 (pay) BBC 4, BBC News ITV 4, Discovery
24, BBC HD, BBC Channel, Disney,
regional ESPN, Five, Gold,
Nickelodeon
* Main channels = channels with a market shares of 10% or above; Secondary channels = channels with a market
share lower than 10%.
In bold font = the leading channel in the audience market.
Source: Author’s compilation based on the MAVICE database of the European Audiovisual Observatory (with mar-
ket share classification based on data from 2008).
and via cable) enable more broadcasters to distribute programming than ever
before. What digital technology cannot change, however, are the structural
constraints embedded in industry specificities. Viewed from a purely economic
perspective, the following are among the most important structural constraints:
• Availability of resources
• Economies of scale and scope
• First copy cost
• Public good characteristics
These generalisable characteristics of media markets are well described in the
literature (see the chapter by Christian Berg in this volume; furthermore see
also Albarran 2002 and 2010; Doyle 2002a; Owers et al. 2004; Picard 1989).
112
Availability of resources is one of the most powerful predictors determin-

ing broadcasting industry structure. There are essential two components. The
first of these is availability of financial resources in respective markets. The
cumulative investments of advertisers in television programme sponsorship and
spot advertisements, as well as the sum of license fee revenue from paying
households (or the corresponding amount of money collected and delivered
by government agencies), together with other sources of revenues such as
direct payment by subscription, determine the total market value. As Gillian
Doyle observed: “Large markets can support many media suppliers and the
scale of their audiences will be sufficient to encourage strategies of audience
segmentation through which many ‘minorities’ will be supplied with specialized
output. (…) By contrast, the total resources available for media provision in a
small market may be less than those available for even a minority in a larger
market” (2002b: 17)
The second basic component is the availability of personnel resources in
terms of professional staff, talent and creativity. Personnel resources are subject
to a wide variety of influencing factors such as education and further training,
the perceived attractiveness of a career in the industry, the size and openness
of the labour market in television, the availability of an audiovisual produc-
tion industry, etc. Availability of resources crucially depends on market size.
Of course this might not be to any totalising degree: smaller markets might
provide excellent conditions for growing talent and might also top up limited
financial resources by attracting capital from industrial sources abroad. But the
possibilities do not offset the point that there are finite limits set by the size of
the population in a given market.
Both Christian Berg and Robert Picard (in this volume) rightly highlight the
fact that broadcasters from smaller countries have, in many cases, similar cost
requirements for television programming as broadcasters from larger coun-
tries – often enough, even the same costs. News, current affairs programmes
and talk shows are examples of broadcasting genres that have relatively fixed
costs, regardless of the market size. This means it costs x amount to produce
a programme of this type regardless of where it is made or by whom. But in
proportionate terms, broadcasters from smaller countries can only draw down
resources derived from a much smaller number of homes, license fee payers
and/or advertisers. This disproportion is comparatively unfavourable for televi-
sion broadcasters from smaller countries. Compensation for lower revenues is
unavailable in most cases, which means broadcasters from smaller countries sig-
nificant complications in adjusting their cost to revenues. This poses restrictions
that are often impossible to get around, for example having far fewer foreign
correspondents for international coverage in television news, less resources
to adapt international programmes to domestic standards or preferences, less
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Josef Trappel
personnel for programme development, as well as less competitive salaries for

qualified managers, to name but a few.
In some cases this disadvantage can be of more limited relevance if na-
tional, regional or local broadcasters are required to compete directly with
foreign channels. The signal exception and crucial exception, however, is
smaller countries that share a language with a large neighbour. Wherever that
is the case it means that domestic channels must compete directly, and thus
the disadvantage becomes pronounced. This exception characterises many
cases: Switzerland (Germany, France and Italy), Austria (Germany), Belgium
(France), Ireland (United Kingdom), New Zealand (Australia), Taiwan (China)
and Canada (United States).
Turning attention to the second structural constraint, as with all forms of
mass media television broadcasting is characterised by economies of scale and
scope. This is well-travelled ground in media scholarship, as noted earlier.
The attribute differentiates mass media from many other goods and services.
In advertising supported and subscription based broadcasting, market size
as measured in number of viewers (or households) indirectly determines the
amount of money a broadcaster will be able to generate. It imposes a ‘ceiling’,
so to say. But there is also the threshold side of this equation: economies of
scale mean that once mass distribution is achieved additional viewers can be
sold as commodities for higher prices without incurring higher costs for reaching
them. It costs no more to serve one million than 100 with the same signal in a
coverage area. Similarly for cable and satellite television, additional subscrib-
ers contribute their fees at no extra cost for these broadcasters. This implies,
however, that the bigger the market the greater the availability of additional
resources for accumulation without co-related increases in costs, whereas
smaller markets simply can’t generate the same volume of resources – and this
puts broadcasters confined to those markets at a comparative disadvantage in
nearly every competitive aspect.
Economies of scope are achieved when broadcasters are able to integrate
operations along the value chain. The value chain notion was popularised by
Michael E. Porter (1998). He suggested that efficiency can be assessed by ex-
amining the several interdependent components in the production and distribu-
tion of products, which together succeed (or fail) to increase the net value (i.e.
added value) of each component. Economies of scope are best achieved via
vertical integration, when one company controls all the components – amount-
ing in practice to end-to-end ownership. In media this provides opportunity,
for example, to generate multiple revenue streams as the product is versioned
across media platforms and, at best, also has merchandising value.
Economies of scale and scope generally improve with increasing market size
and/or decreasing levels of competition. Clearly this puts domestic broadcasters
in smaller countries at a significant disadvantage because they have far less
114
opportunity to profit from these economy characteristics than those located

in larger countries. International broadcasters further complicate the situation
as they are able to benefit from both forms of economy by operating across
markets, especially common in smaller countries.
Closely connected with economies of scale and scope is the third structural
constraint, first-copy cost. As with other forms of mass media, television broad-
casters incur high up-front costs for producing the first copy of a programme.
The notion is an analogy with the newspaper publishing business. All the costs
are in producing the first copy. Every additional copy sold lowers the cost per
unit, and eventually accrues as profits. In broadcasting it means either every
additional home that tunes in to watch, or that signs up to subscribe. As with
the two already treated, this structural constraint applies no matter the size of
the market – i.e. to smaller and larger broadcasters alike. But this means, by
implication, that broadcasters in smaller markets must bear higher total costs
because they have less households to tune in or subscribe to. The exception
would be any broadcaster able to escape the inherent domestic constraints by
capitalising on a world market for selling its original television programmes.
Most small market broadcasters don’t have great possibilities there, and gen-
erally also have mother tongues that are not English or another big language
family (e.g. Mandarin Chinese).
Finally, the economic specificity of the public good characteristic of tel-
evision is of great importance to the development of mass media in general,
and broadcasting in particular. There are two essential economic features of
public goods: non-rivalry in consumption and non-excludability of consum-
ers. Television transmitted over cable, satellite and by terrestrial means can be
received by all of those consumers equipped with the appropriate reception
device. Of course excludability is possible for subscription services, and so
accounts for the ‘tier’ strategies characteristic of satellite and cable operators.
But free-to-air terrestrial television doesn’t have this option, and that accounts
for the bulk of domestic production in smaller markets. Non-rivalry would
apply to all channels, regardless of payment and delivery approach. Consump-
tion of a programme by one viewer does not prevent any other viewer from
watching the same programme at the same time. Consequently, television is
properly described as a public good according to both measures. Broadcasters
from larger or smaller countries do not differ much with regard to this media
industry specificity.
In short, then, when seen as a process in its entirety from content creation
and aggregation through distribution, the structure of television broadcasting
is determined by economic specificities. As other chapters in this volume dem-
onstrate it is not only about that, but it as clearly is at least about that.
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Liberties and constraints

With the preceding specificities in mind, we can turn our attention to a closer
examination of differences between the television industry in smaller and larger
countries – our emphasis in this part of the chapter.
For the purpose of this book, smaller countries have been defined as having
a population of less than 20 million. This static definition includes the large
majority of member countries of the European Union, and also applies to a
variety of countries worldwide. The question now is if the smallness of domes-
tic markets shapes the television broadcasting industry, and if so then how.
The answers are important for establishing the relevant factors that shape this
industry in smaller countries when we compare with larger countries.
In line with earlier work on media development in small states (see Puppis
2009; Siegert 2006; Meier and Trappel 1992; Trappel 1991), three arguments
are discussed here:
1. TV broadcasting industries in smaller countries enjoy less managerial and
editorial options than their counterparts in larger countries.
2. TV broadcasting industries in smaller countries have structures that are
similar to highly concentrated broadcasting markets. Dominant features
observed in markets controlled by only few media conglomerates can
equally and regularly be found in smaller countries.
3. TV broadcasting industries in smaller states are vulnerable and depend
critically on decisions taken by actors outside broadcasting competition.
Therefore, the industry in smaller states especially requires adequate
governance.
These arguments are not to imply that the TV broadcasting industry in larger
countries is generally better off than in smaller countries. Some broadcasters in
smaller countries are highly successful in many relevant dimensions: audience
reach, market share and profitability. Size as such is not a valid predictor for
industry success. But small size in the broadcasting industry inherently means
that certain strategic choices must be excluded by management from the out-
set, and will encourage corporate behaviour that is driven by ex ante market
co-ordination rather than market competition.
Smaller countries, fewer options

Regardless of the type of television broadcasting under scrutiny, whether a
general interest channel or a special-interest news or sports channel, pro-
gramme choice is more limited for broadcasters targeting smaller countries.
The options for creating and running a special interest channel are particularly
116
dependent on total market size. All of the larger European countries have a
broad spectrum of special interest television channels, typically including news,
business, sports, music, and channels for children. These broadcasters have
generally been able to successfully locate themselves within a market niche
that is wide enough to support the running costs for the channel at a profit.
Some such operations are explicitly intended to cross borders, including for
example Euronews, Eurosport and BBC World – as well as signals originating
from further afield, such as BloombergTV from the USA. Moreover, many of
these channels are delivered at an international scale in a variety of languages
(e.g. Euronews and Eurosport). Others are more national in market orienta-
tion, such as the news channel N24 in Germany or Sky Sports in the United
Kingdom.
There are fewer examples of special interest television channels offering
genuine domestic content that references national current affairs in smaller
countries. Low budget television channels are far more active in these more
local or regional areas. There are fewer business opportunities for national (or
international) special interest channels. In Switzerland, for example, several
attempts have been undertaken to establish a business television channel.
One might think this should stand a fair chance of success given the country’s
prominence in international banking. But all of these investments have failed
economically either in the planning stage or collapsed mere months after
launching operations. A good example is the European Business Channel in
1990 (Meier and Saxer 1992: 234). Another example is from Denmark where a
national sports pay-TV channel was launched without success in 1997, closing
shop later in the same year (Mortensen 2004: 46).
The switchover to digital television distribution since 2005 to 2007 (ap-
proximate because switchover schedules vary widely in Europe), together with
new legal rules, have enabled broadcasters in smaller countries to set up new
channels. As a rule these do not carry so much domestic content, however, or
as much news and current affairs programming. Instead they tend to establish
small market niches and offer low cost programmes, very often imported. Fin-
land and Flanders are good examples for this recent boom in niche television
channels (see de Bens 2007: 77; Jyrkiäinen 2007: 103). Their economic viability
and sustainability has been severely tested during the recent economic crisis
that hit advertising spending hard in 2009 and 2010.
Apart from the obvious reason of having too few people watching special
interest programs in smaller countries to convince the local advertising industry
to make use of these channels for getting the attention of audiences, the high
fixed cost for running a decent newsroom during large parts of the day have
typically been considered to be high barriers to market entry. Aukse Balĉytienė
confirms this in her assessment of the Baltic states where she argues that “for
smaller markets, a particular concern is the availability of resources to support
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the production by domestic media groups of original content as opposed to

imported production” (2009: 135).
There are important economic implications in this industry structure.
Smaller countries cannot provide a home market of sufficient scale to attract
or encourage television entrepreneurs willing to invest in infrastructure, per-
sonnel and skills development. The critical mass for developing a sizeable
television industry simply can’t be met, thus rendering smaller countries into
‘blind spots’ for television industry development. National demand for the
television programme industry, for studio services and for the development
of a specialised labour markets need for such development in television must
remain small when only a few television broadcasters manage to survive for
a longer period. Thus, entrepreneurial options are far more limited in smaller
countries.
Private television, in most cases best described as commercial advertising-
financed businesses, is generally exposed to a large number of uncertainties.
Advertising doesn’t provide such channels with a reliable flow of revenue
because it is highly reactive with general economic conditions. New modali-
ties of advertising, in particular related to the internet, leads to even more
uncertainty – and instability. In such circumstances, rational entrepreneurial
behaviour suggests it is wiser to divert investment into other outlets and di-
verse options. The advantages of scale (discussed earlier) for broadcasters in
larger countries are simply unavailable for diversification in different types of
broadcasting operations in smaller countries. For private commercial television
operators, smaller countries offer only riskier investments than larger countries
with a their greater variety of diversification options.
What works quite successfully, in contrast to special interest channels, are
national television channels – and for smaller countries most of these are in fact
organised as public service media (e.g. ORF in Austria, RTE in Ireland, SRG/
SSR in Switzerland). Of course some of them are private commercial stations
(e.g. VTM in Belgium, RTL4 in the Netherlands, TV4 in Sweden), and some
are organised as hybrid models that combine (in different formulations) public
service and commercial orientations – especially characteristic in the Scandi-
navian countries (e.g. TV2 in Denmark). But having more than two competing
general interest television channels per country is the exception rather than
the rule among smaller countries, apart from smallish low budget channels at
the local level. In the new EU member states of Central and Eastern Europe,
a similar pattern has emerged. Bulgaria, the Czech Republic, Hungary, the
Slovak Republic and Slovenia all feature structures where there is competition
between a market leading private company (in many cases controlled by an
international corporation, such as Central European Media Enterprise) and an
incumbent public service operator, typically however with a history in state
broadcasting (i.e. not originally grounded in the PSB ethos).
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The emerging industrial structure reported here, characterised by a very

limited number of general interest television broadcasters and a decent number
of small scale and low budget local television channels, neither provides for
full scale market competition nor for economies of scale and scope. Television
industry structure in smaller countries is characterised by a small number of
corporate actors, with far more limited business opportunities, and accordingly
curtailed future market perspectives.
Television industry concentration:

Disadvantage for smaller countries
A small number of corporate actors is the main characteristic of highly con-
centrated markets in general. To understand better the television industry in
smaller countries it is therefore worthwhile to apply findings from contemporary
media concentration research to the television industry in smaller countries.
Werner A. Meier (2007: 86ff) discussed a number of characteristics in highly
concentrated media markets. A selection of these findings can be applied to the
television industry in smaller countries, which reveals their structural similarity
to highly concentrated media markets.
1. Limited number of powerful providers

As a rule, a small circle of powerful owners controls the television industry in
small countries. Apart from public service broadcasters, which are regulated
by law and supervised via parliamentary oversight in most cases, there are few
examples of independent ownership. On the contrary, in most cases a very
few cross-media corporations run private sector television channels. Let’s look
at a few telling examples.
MTV3 in Finland is part of the second large newspaper publishing group,
Alma Media, who is also a minority shareholder in Sweden’s TV4. This channel
is controlled by Sweden’s largest publisher, Bonnier, who also owns one-third
of Alma Media in Finland (Österlund-Karinkanta 2004).
In Central and Eastern Europe, the Central European Media Enterprise [CME]
is an American-owned corporation that controls significant shares invested in
television in several countries including Bulgaria (Nova TV), the Czech Republic
(Nova TV), the Slovak Republic (TV Markiza), Slovenia (Pop TV; Kanal A) and
Romania (Pro TV; Acasa TV). In Ireland, to take one more example, only two
actors dominate the national television arena: the public service operator, RTE,
and the UK-dominated private channel called TV3.
A similar pattern is found in larger countries: The television industry in
France, Italy and Spain can in each case be described as a duopoly of public
service broadcasters in competition with one large private commercial con-
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glomerate that is diagonally concentrated – TF1 and Bouygues in France, and

Silvio Berlusconi’s Mediaset/Fininvest controlling Canale 5, Italia 1 and Rete 4
in Italy, and Telecino in Spain). Europe’s largest market, Germany, has private
commercial television dominated by two rival groups, RTL (Bertelsmann) and
ProSiebenSat.1 (since 2006 owned by financial investors KKR and Permira).
Thus, television as such has reached a stage in its industrial development
where both in smaller and larger countries markets are divided among a very
limited number of corporate actors and a large number of very small second-
ary providers.
2. Restricted consumer choice

Media concentration theory suggests that highly concentrated media markets
restrict consumers’ choices. Smaller countries’ television industry appears
similarly less diverse in its programme offer than what is typically available
for larger countries. As discussed above, relevant special interest channels are
less frequently offered in smaller countries and the general array of televi-
sion channels is more limited. This is of concern in particular with regard to
national and regional news and current affairs programs. Entertainment is less
restrictive due to more access being commonly afforded by foreign satellite
channels, but also in particular in smaller countries sharing a language with a
large neighbour country. Very often foreign channels targeting domestic audi-
ences in same-language territories mainly provide entertainment programming
rather than news and information services, or current affairs programming.
However, in both segments (news and entertainment) a critical issue is the fre-
quency and capability of television broadcasters to both produce and distribute
programmes that reference the daily social life of the targeted population in
smaller countries. World news and merely adapted reality-TV formats do not
meet this requirement.
3. High barriers to market entry

Barriers to market entry are established by market actors who wish to keep
new competitors out of the market. Economic theory considers product pric-
ing and marketing cost as relevant barriers to market entry. Both factors can
deliberately be manipulated to keep the expenses required for any new entrant
high. Although market entry for general interest television channels is difficult
in any country due to saturated markets and limited resources, smaller coun-
tries are particularly vulnerable to high market entry barriers. Over the last two
decades new and relevant television actors were established almost exclusively
in Central and Eastern European countries, while in Western Europe only tel-
evision channels of secondary importance have been newly established. The
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barriers to market entry are simply too high to surmount in smaller countries
with smaller markets.
4. Restricted journalists’ choices

Media concentration research demonstrates that journalists are confronted with
fewer employment options in highly concentrated media markets. For a healthy,
vibrant news industry able to properly serve the diverse needs of a democracy, it
is of particular importance that journalists have the option of changing employers
in situations where journalistic work produces conflicts of interest. For example,
a journalist with the bit in his or her teeth on corporate fraud may be unable
to publish the story in a channel that relies on that corporation for a significant
proportion of its advertising revenue. The only way to get the story published
is to change employers, moving to an outlet that is less or not at all beholden
there. Smaller countries with fewer television operators contain much higher
risks for critical and investigative journalists than larger countries with more
outlets, and thus greater employment opportunities. In Germany, for example,
current affairs journalists may change between the two national public service
broadcasters (ARD and ZDF), move to a robust independent regional infrastruc-
ture, or even to one of the two large private broadcasting groups. In Austria, in
contrast, there simply is no option for investigative broadcast journalists apart
from the public service operator. Even in less polarised smaller countries such
restrictions in employment options are far more severe than in large countries.
5. Homogeneous journalistic working practices

The homogenisation of norms and working practices in journalism is reduc-
ing incentives to compete in terms of both quality and innovation. Drawing
from Schumpeterian innovation theory, television markets can be expected
to provide a maximum of innovation only when there is a need for different
business practices and enough room for new market entrants. As he suggested
decades ago, this secures a “process of creative destruction” (Schumpeter [1942]
1976: 81). Such opportunity is severely constrained in smaller markets due to
high barriers to market entry. Duopolistic market conditions, where just two
main actors can thrive, impedes to the establishment of new television chan-
nels with creative ideas and fresh concepts. Larger countries are in a similar
position, of course (in light of earlier discussion about conglomeration), but
their prospective is certainly more favourable. The large size of the total Italian
audience market is more promising for any effort to establish a new television
channel (e.g. La Siete) against the resistance of the established duopoly of RAI
and Mediaset than would be the case for the limited market size in a country
such as Ireland or Portugal.
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Josef Trappel
The scarcity of innovation in smaller countries leads to homogenization

of norms and working practices within journalism. The point of reference
remains steady and static, being less exposed to new ideas. Of course, televi-
sion broadcasters in small countries closely observe business developments
in other countries, but the requirement to implement new working practices
is less urgent.
6. Decline of critical monitoring

Similar to other sections of the media, the television industry is governed (or
should be governed) by high standards of self-regulation. While one essential
sector in smaller and larger European countries alike, at least in the West, is
subject to public control (public service media), the private commercial sector
is mainly governed by self-regulation. European norms for trans-frontier televi-
sion that equally apply to television broadcasters in any EU member states with
distribution signals that cross national borders have been increasingly relaxed,
and recent trends suggest that national rules are also increasingly based on
EU directives, especially now the new audiovisual media services directive
(2007/65/EC; formerly, TWF). Self-regulation is therefore of already high and
increasing relevance to corporate and media governance in the television in-
dustry. In smaller states self-regulation rules are typically negotiated among that
small number of industry actors noted earlier. Civil society can hardly expect a
balanced, or at least non-biased, outcome of negotiations under these condi-
tions. Larger states with representatives from more television companies are
better placed to condone stricter and less biased self-regulation rules. This argu-
ment is, however, hard to verify empirically. Self-regulation is often determined
informally and established rules are subject to frequent changes. What can be
demonstrated in cases with only few corporate actors is much less strictness
in monitoring competitors, including the observation of self-regulation rules.
7. Exposure to take-over
National corporations in concentrated markets are critically exposed to take-
overs by potential investors. This characteristic of highly concentrated media
markets is a result of general industry and competition dynamics. Monopolies
(or duopolies) represent valuable business opportunities for investors. While
such duopolies can be found in both smaller and larger states, the cost for any
take-over is much less in smaller states while expected margins are often at
least as attractive as in larger states. Therefore, highly concentrated television
markets where there is only one private commercial corporation presents an
attractive acquisition target for investors, especially today among international
conglomerates. While such business operations are risky in larger countries,
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the financial risk entailed for investment in smaller countries is comparatively

lower and easier to accept. The take-over of ProSiebenSat.1 in Germany by
the financial investors KKR and Permira in 2006 exposed those investors to
very high risks. Indeed, shares dramatically lost value in the following years,
with severe consequences for investors and the affected television channels
that were subsequently forced to cut costs. In contrast, television investments
in smaller countries in Central and Eastern Europe worked well.
The current economic crisis has hindered acquisition in the television industry
in Europe, but we can expect that to be temporary. Moreover, there is an imbal-
ance in foreign investment in television between smaller and larger countries.
While there are numerous examples of television corporations established in
larger countries that are keen invest in smaller (and larger) countries (e.g. RTL/
Bertelsmann from Germany in Belgium, Hungary and the Netherlands; German
ProSiebenSat.1 group in Hungary, the Netherlands and Sweden; US-based CME
in Bulgaria, Czech Republic, Slovak Republic, Slovenia and Romania; Mediaset
from Italy in Spain), there are no examples of television corporations from
smaller countries invest in larger countries.
This non-exhaustive list of characteristics illustrates the central argument of
this chapter: that smaller countries are more exposed to the negative effects
of television market concentration than larger countries, although ownership
concentration is present in the larger markets as well. Although concentration
characterises all market sizes today, the disadvantages disproportionately ac-
cumulate in smaller television markets.
Vulnerability, dependence and governance

Television industries established in smaller states appear to be vulnerable and
dependent. Vulnerability refers to the limited sovereignty of television broad-
casters in smaller sates both with regard to programme choice and ownership
(cf. Puppis 2009: 11). Firstly, television broadcasters in smaller countries are
confronted with programmes and formats that were developed in and for
larger markets. Game shows, television series and other formats are developed
to suit the preferences of large markets, which are the main customers also
for global trade. Broadcasters from smaller markets must either adapt such
international formats for the national realities at the same (high) cost as larger
TV broadcasters or, alternatively, broadcast such material unaltered at lower
cost. See the chapter in this volume by Annette Hill and Jeanette Steemers for
useful discussion.
Secondly, smaller markets sharing a common language with a larger neigh-
bouring country are confronted with television programmes originating in that
country but transmitted into the smaller market. Such transnational broadcasting
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Josef Trappel
is welcome for growing programme diversity, but is less desirable with regard
to sovereignty and culture.
Thirdly, smaller countries with far less comparative resources are con-
stantly vulnerable to take-overs by wealthy foreign companies, thus reducing
sovereignty in decision-making for the smaller country as well. As illustrated
above, decisions about television programming and structures in many of the
countries in Central and Eastern Europe have been taken over by corporations
established outside these countries. Todd Chambers (2003: 45) used the term
“absentee owners” to describe the pattern (although in a different television
context). Such owners are absent from the social, economic and political reali-
ties of domestic populations, and are inclined to pursue different priorities and
to employ different decision motifs than those who are personally exposed to
the social consequences of their decisions. Such absentee-owners make the
television industry in smaller countries still more vulnerable.
Moreover, decisions on how the television industry in smaller countries is
organised are to a large extend taken over by outside actors and local authorities
have quite limited options for influencing decisions. Probably the most impor-
tant decision concerns the internal (domestic) market order. As demonstrated
earlier, smaller countries cannot afford to sustain a no-holds-barred market
model based on pure competition rules. Scarce resources simply do not allow
this option. Nonetheless, smaller countries today increasingly find themselves
vulnerable to the supranational regulations on television industry structure that
are applied to larger countries with much bigger, and often wealthier, markets.
This imbalance and the dependence it creates has become increasingly
evident in comparisons between smaller and larger countries. Let’s remember
that the number of main television channels (market share of 10% or above) is
considerably fewer in smaller countries. Market competition with its promises for
internal checks and balances can’t be achieved in the TV industries of smaller
countries. Instead of Adam Smith’s heralded invisible hand, the hand of the
market in smaller countries is highly visible: dominant market players control
commercial television activities in highly concentrated markets, generally with
only one company commissioned to set the standards – namely the public
service provider. Of course the UK complicates the picture with its incorpora-
tion of commercial PSB companies (Channels 4 and 5), but recent economic
problems suggest that the degree to which these hybrids will be held to public
service standards is in decline.
Although there are no convincing arguments that competitive television
markets in larger countries provide the best achievable quality and the most
relevant contents, there is no doubt that in smaller markets an entirely market-
based approach has so far failed to deliver the goods. Smaller countries delib-
erately and with good reason insist on measures to prevent market deficiencies
and market failure. Today, however, such measures can only be applied only
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to the extent that the relevant supranational framework permits this, such as
the rules established by the European Union. Smaller states are hardly ever
able to influence such fundamental decisions, as demonstrated in this volume
by the chapter from Erik Nordahl Svendsen. At least their capacity for influ-
ence is meagre compared to the negotiating power wielded by large states.
Consequently, smaller states depend on rules designed to suit the preferences
of larger states. This doesn’t always or necessarily imply a disadvantage for
smaller states, but it certainly reduces self-determination in the television field.
EU competition policy rules that are applied to television, for example, do
not – and following the institutional setting actually cannot – take into account
the specificities of smaller markets where competition doesn’t work the same
way or to the same extent due to smaller size characteristics. Despite this it has
become evident that smaller television markets are under permanent scrutiny
by the European Commission regarding state aid rules, and mainly due to an
endless series of complaints filed by commercial media operators for their own
self-interested reasons. It is only very recently that the EC acknowledged that
smaller states might actually be different. In its Broadcasting Communication
2009 the Commission suggested with regard to state aid rules and public fi-
nances of public service media that “the Commission will also take into account
the difficulty some smaller Member States may have to collect the necessary
funds, if costs per inhabitant of the public service are, ceteris paribus, higher…”
(European Commission 2009: para. 42).
The question arises, then, whether smaller states require different rules in
order to provide their populations with the best possible television service –
with services that are appropriate to their distinctive comparative needs. Factors
keyed to size, resource abundance, vulnerability and dependency for doing
television in smaller states together suggest that an approach to governance is
needed that would accommodate adequate tailoring (or versioning) to respect
the legitimate needs and distinctive comparative interests of smaller member
states. This ought to be taken on as a developmental frontier for governance
rules explicitly addressed to television broadcasting in smaller states by supra-
national authorities.
Denis McQuail has suggested using the term governance “to describe the
overall set of laws, regulations, rules and conventions which serve the purpose
of control in the general interest, including that of media industries” (2005: 234).
He distinguishes formal from informal, and internal from external, elements
in media governance. In the context of television governance in smaller states
McQuail’s systematic order is helpful to address fields where action is merited:
First and foremost, formal and external governance is required to deal with
the conflict of interest between the requirements of market and competition on
the one hand and high levels of media ownership concentration and market
failure on the other. Domestic regulation cannot change market conditions
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Josef Trappel
in smaller states. But formal and external rules could be applied that would
make all television operators, public and private, accountable to a shared set
of goals at some general standard for society, e.g. with democratic principles
and diversity requirements. Such rules would not only define acceptable levels
of media concentration (including cross-media concentration), but also formal
and internal governance rules. All television broadcasters would thereby
necessarily adhere to a set of obligations for internal conduct, for standards of
programming, in staff recruitment, in guidelines for programme acquisition, for
principles of collaboration with national programme producers, for ensuring
the independence of newsrooms from undue influence (internal and external),
etc. All of this is supremely relevant for and in smaller states with necessarily
higher concentrated television markets.
Another aspect of formal and external governance concerns the role and
performance of public service television broadcasters in smaller states. These
broadcasters are essential to balancing between the commercial interests of
private television and the public interests of civil society. In smaller states the
relative importance of public service broadcasters is higher due to the small
number of relevant competitors. Formal and internal governance rules should
clearly define the obligations and the remit for public service television. In return,
revenue sources should be defined and assured for a suitable period of time.
A third aspect of formal and external governance lies in the importance
of a clear separation of power between television broadcasters, government
agencies, and economic forces. Due to the smaller size of their societies, the
necessary and essential distance between television and those wielding power
in both government and markets deserves consideration. Temptations to il-
legitimately influence television coverage can be more likely in smaller states
with stronger corporate ties between political, industrial and media actors than
in larger states. Empirical research is uncertain here, as the chapter by Chris
Hanretty demonstrates. More is needed to confirm or disprove this assumption.
Informal and external governance refers to the continuous public debate
about television in smaller states, and that mainly means discourse about threats
to and opportunities for its development. This debate is essential for arriving at
a shared understanding of the roles and functions of television broadcasting in
contemporary societies. Again, this debate is of more relevance in smaller states
because of the scarcity that is characteristic of television supply. Television’s
role in society should be defined by a public debate rather than by vested
interests. The scale of available resources in small markets simply does not
permit fair and robust services for minorities if handled on a purely competi-
tive basis. This is another pressing reason that public debate about television
broadcasting and its roles is essential.
Finally, informal and internal governance refers to conduct within television
organisations. This field is least accessible for, and least exposed to, public
126
control. But that is essential for ensuring adequacy and fairness in television
system performance. Television programming is the result of collective efforts
by a large variety of people engaged with many aspects of its production and
distribution. The better and clearer the informal and internal codes of conduct,
and the more rigorously observed, the better the programme output that can
be expected. This factor obviously applies equally to small and large states.
Conclusions
The television industry in smaller countries is in a delicate position. Vulnerable
and dependent on external decisions, its point of reference remains the civil
society requirements of the national population. Television can still be con-
sidered what James Curran calls “core media” for society (2007: 39). As such,
television “should sustain a culture of ‘civil democracy’ designed to promote
conciliation and compromise. (…) Core media should also promote conciliation
by supporting the rituals and procedures of the democratic system” (ibid.: 40).
Television in smaller countries can live up to this requirement only if structural
conditions are accommodated and structural requirements are met. These
include a high level of accountability for industrial television actors – public
and private – a sufficient level of financial resources, and a set of governance
rules that respect the distinctions of smaller states. Rules governing markets
and competition alone will not fully comply with these requirements because
market failure and deficiencies continue to threaten the capacity of this core
media sector to be a well-functioning structure. Achieving that requires an
adequate set of appropriate media policy measures.
127
From Sovereignty to Liberalisation
Media Policy in Small European Countries
The importance of size affecting conditions for television broadcasting is stipu-

lated in the introductory chapter, and variously treated in this volume. Of course
other contextual factors are important, and in this chapter we sharpen the focus
on history and politics. These are vital for understanding how broadcasting is
organised and operated in a country, whatever its size. Here we investigate me-
dia politics in European countries, and later in the European Union particularly
(largely presented here as an historic sequence). We hypothesise that a country
will give its citizens television at the point when resources allow that, and that
television policy always has some national cultural aims. We are interested to
understand what accounts for how broadcasting is organised and mandated, and
especially which options were selected by different countries. We are working
to understand how TV broadcasting strategies can be usefully characterised,
and to know if strategies differ in small countries in any systematic way.
Since its inauguration in most of Europe in the 1950s, and persisting until
roughly 1989 consequent to the Television without Frontiers directive (TWF)
from the European Union (EU), strategy in television policy was exclusively
a national, sovereign issue. This was the case no matter the country size, and
despite variance in economic and political conditions. There have always been
questions about how to introduce television, on what basis and with which
arrangements, and later about how to add more channels. Debate about the
relative benefits of adding more channels as public or private offers has been
characteristic. Until the late 1970s most of Europe favoured adding more public
channels. This began to change in 1980s, and with accelerating speed after TWF
in the West and the collapse of the Soviet Union in the East. TV policy was
rapidly liberalised and transnationalised in Europe. One characteristic effect has
been increasing transmission of channels from neighbouring countries and cross-
national ownership, both of which have had particular impact in smaller coun-
tries. This was supposed to benefit European audiovisual culture by fertilising
development in home production to counter the growing presence dominance
129
of American audiovisual products. In fact it has mainly stimulated a further and

dramatic increase in American presence, first in content and later in ownership.
In this chapter analysis focuses on how national television strategies have
responded, proposing two options in generalisable terms. Some countries
evidence a balancing strategy between public and private sectors, while oth-
ers favour a consolidation strategy in public television. This leads to deeper
analysis of the present position of public service television, both in terms of
revenue and viewing. That is especially relevant to understanding the strength
and importance of public television in smaller countries today. Further, we
investigate how different states have dealt with private commercial television
and the transnationalisation associated with it. Here we are especially interested
in performance regarding the 50% quota requirement stipulated for European
works by the European Commission [EC], and EU competition policy in rela-
tion to public broadcasters.
Analysing the data and assessing historical elements lead us to conclude
that history and politics are at least as important as market size for explaining
the television situation in a country. Moreover, we contend that the politics of
media liberalisation have opened smaller countries to the impact of big media
corporations that enjoy far greater economies of scale and to such an extent
that national market size is likely to be of far less importance in the future than
has been the case historically. In our view, the data would suggest that the
future of television is likely to increasingly privilege a transnational concept.
We begin with constructing a typology of countries to facilitate analysis
of the data. In line with the overall proposition of this chapter, the typology
combines market size with a historical, contextual dimension. We begin with
the historical sketch.
Historical sketch
The general history of Europe certainly affected the organisation of radio
broadcasting in the 1920s, which conditioned arrangements for the develop-
ment of television. Arguably the greatest legacy from the Golden Age of Radio
in Europe is the concept and approach generally characterised as ‘public ser-
vice broadcasting’ [PSB]. This approach defined the structure and objectives of
broadcasting in Western Europe (gradually, of course). The political division of
Europe after the Second World War deeply affected the organisation of televi-
sion. In Western Europe public TV became a cultural element of the welfare
state and liberal democracy, while in Eastern Europe broadcasting became part
of the state apparatus controlled by the Communist party.
The year 1950 was significant in this regard. Two organisations were launched
that year: the EBU in the West and OIRT in the East. There was considerable
130
diversity even in the West among EBU members, however. Not every country
that was accepted as a member practiced democracy. Dictatorships prevailed
in Portugal and Spain, and Greece was under military rule. The PSB approach
was imposed, to an important degree, on West Germany by the Allied pow-
ers – especially Britain and with America’s blessing. Television in the west was
not generally organised or operated as a private enterprise, although in some
countries noted here it wouldn’t qualify as genuine public service broadcast-
ing either.
The general pattern and the variance both serve to demonstrate that struc-
turing television was almost entirely a domestic affair for governments of
respective nation-states to decide. It was also that for technical reasons: TV
signals did not travel very far. As with radio before it, television was positioned
as a tool for nation building in a continent devastated by war, and especially
understood as a means for uniting rural and urban populations, as well as di-
verse provinces. During the 1980s this began to change with the introduction
of satellite broadcasting. In market terms, the European Economic Community
(forerunner of the EU) was growing in this period, incorporating the new de-
mocracies in southern Europe as they shook off post-war dictatorships. With
the Single European Act that was agreed in 1986, the era of closed national
television systems ended. The TWF directive in 1989 mandated the free recep-
tion of signals on minimal conditions. There were rules limiting the amount
of advertising, requiring that at least 50 % of content on any channel must be
European works [EW], and provisions for the protection of minors. The objec-
tives were to create a common advertising market and stimulate a common
European audiovisual market to compete with American media industry. At
best it was hoped that pan-European TV would facilitate some shared sense
of European identity. This aspiration was naïve from the start (Schlesinger
1993: 6-17). As we shall see, the net result did not hinder growth of American
content but in fact helped facilitate an escalation of that1 – especially in small
markets. In 1991 the Euromedia Research group did a content analysis of 53
channels and concluded:
It is undoubtedly in the cultural interest of European nations, as well as of
Europe as a whole, to recognize that the dominant economic and industrial
logics that motivated commercialization of television and the rapid develop-
ment of new communication technologies in the 1980’s have had the cultural
consequence of supporting neither nationally based production nor Euro-
pean production, but rather, of massively supporting Hollywood. Because of
1. “It is possible to argue that EU media policy is bringing about the opposite of what it states it is trying to
achieve. Rather than promoting Europeanness, the strategy of liberalization is creating more commercial chan-
nels, which are dependent on American programming. Americanization may be the unintended consequence
of Television without frontiers in Europe” (Kevin Williams, quoted in Terzis, 2007, p. 454). I will add it is
even more so if the TWF-directive is not respected by big member states, regulating channels broadcasting
to small states, as we shall see later.
131
American dominance, Europeans should be alarmed at the growing uniformity

of TV fare, which is frequently at the cost of their own cultural identity. It
is a major challenge to European TV stations, commercial as well as public
service, to fight this continuing American ‘cultural’ invasion.2
This perspective grounds our approach in this chapter, and particularly in light
of our interest in the smaller country context. The year 1989 was thus a turning
point for television in Western Europe, and moreover for television in Eastern
Europe after the Berlin Wall came down in November. In the early 1990s Eastern
Europe abandoned the communist model and (re-)introduced capitalism and
democracy (of varying kinds and to different degrees, of course). This happened
peacefully everywhere except in the former Yugoslavia. By 2005 most former
Soviet countries were members of the Council of Europe (and its European
Convention on Transfrontier Television) and then or later of the European Union.
In their national transformations television underwent two parallel changes. Pri-
vately owned and commercially financed stations were allowed, and the former
state television companies were redefined as public service broadcasters. This
latter change was often the most difficult, with persistent political interference
reported.3 As part of this process, former OIRT-members joined the EBU in 1993.
Typology of big, small, old and new democracies

This historical sketch grounds a typology characterising European countries by
associating population size4 with TV markets. The typology divides EU member
states into four categories:
1. Big countries (over 20 million) with a longer experience of democracy,
mature PSB and a higher level of income (Big West)
2. Big countries (over 20 million) in transition to the situation characterising
the first category (Big East)
3. Smaller countries (1-20 million) with a longer experience of democracy,
mature PSB and a higher level of income (Small West)
4. Smaller countries (1-20 million) in transition to the situation characterising
the third category (Small East)
The “longer democratic tradition” criterion primarily distinguishes Western coun-
tries from those in the East, but also pertains to distinguishing some Mediterra-
nean countries (Portugal, Spain and Greece) in terms of “Systemic Parallelism”.
2. Els De Bens, Mary Kelly and Marit Bakke (1992), p. 98.
3. Television across Europe (2009).
4. In practise only countries with data in EAO’s Statistical Yearbook 2008 are included, end even some of them
are too small to be taken into account.
132
This may position them as being closer to the “transition countries” of Eastern
Europe as described by Karol Jakubowicz.5 Transition countries lack any real
history with PSB and Jakubowicz thinks that is unlikely to be mended. At the
same time, and in many cases instead, the introduction of private television
was done quickly and without critical thought.
Table 1. Typology of members or candidates to EU/EFTA, excluding countries with a

population less than one million
Politically/economi-
Population > 1 million cally developed Transition countries
Big countries 1.(Big West) 2.(Big East)

Spain Romania
Italy (*) Poland
United Kingdom* Turkey
France*
Germany*
Small countries 3.(Small West) 4.(Small East)

(less than 20 million inhabitants) Ireland+ Estonia+
Norway Slovenia
Finland Latvia+
Denmark Lithuania+
Switzerland+++ Croatia
Austria+ Slovakia
Sweden Bulgaria
Belgium+ Hungary
Portugal Czech republic
Greece
Netherland
(Luxembourg)++
+= (partly) sharing language with big neighbours,* = sharing language with small neighbours
This categorisation is parsimonious and will ground the research questions that
steer the rest of the chapter. The objective is to ascertain whether the devel-
opment and conditions of TV in these countries feature similarity in patterns
that are determined more by the size of the country or by political-economic
traditions. We will develop answers by looking to find if Small West and Small
East are more closely related because they are smaller than Big West and Big
East, or if instead Small West is closer to Big West and Small East to Big East
because they share democratic traditions and are at some parallel level of
economic status. Moreover, if Small West is different from Small East, we will
look for evidence that Small West may not be the same as Big West primarily
because of size. The countries included in each category are not presumed
to be homogenous. The point is to facilitate analytical comparisons that can
answer the research objective. We shall begin analysis by looking to see when
the various countries included in the typology launched the two types of tele
5. The term ”transition country” indicates a transition to democracy after an authoritarian or totalitarian system,
see: Karol Jakubowicz (2007) p. 17.
133
vision broadcasting. The objective in this first analytical pass is to determine

whether there are generalisable patterns indicating preferred strategies, which
as hinted in the opening paragraph we believe to have uncovered (balancing
versus consolidation).
National strategies of media politics

Nearly all of the countries in Europe launched television as some form of state
enterprise in the 1950s. Of course we need to be careful how we understand
that term because broadcasting in the West was distinctively not oriented to
be any form of state broadcasting – as was the case in the East. But the fact
remains that in most of these countries television was largely financed by public
money and regulated by governmental agency. Licensing of private commer-
cial channels began with radio in the mid-1980s and continued through the
1990s, by which time it was also happening in television. Beneath this general
pattern of similarity one finds important variations that cast light on some of
the forces and dynamics explaining the development of television in different
countries, also according to their size. While all of the free and democratic
European countries except Luxembourg began with public service television,
the next step in system development diverged, demonstrating two directions.
One option was a balance strategy. In this approach the second channel was
licensed as a private sector offer because the first channel was the public offer.
The other option was a strategy of consolidation. In this approach the country
added more public channels before opening the system only later to private
sector ownership. Which countries chose which strategy, when and why?
Table 2 provides some useful answers, using the typology to plot the years
for the launch of public channels and private, free to air terrestrial television
channels that were made available nationwide 6. The table also shows the
number of public channels that were established before the launch of the first
private channel.
The Big West countries were the first (as a group) to introduce public tel-
evision and later were also first in adding private television. On average, they
introduced public television at least one decade before the other three categories
managed this. The introduction of private television varies widely in Big West
countries, however, often by multiple decades. Even in Small West countries
the process spans nearly 15 years. And one Small West country (Switzerland)
has not introduced private television to this day (also not an EU member, and
6. The analysis is limited to nationwide terrestrial channels because this is the most significant and top level of
media politics, and because the number and functions of local/regional channels or cable channels vary even
more between European countries. Satellite channels from other countries are left out in this first analysis,
since they are not decided by the country itself. We come back to these important channels later in other
analysis.
134
Table 2. Launch years for public and private TV, with number of public channels
established before the introduction of private TV
No of No of
public public
channels channels
Start of before Start of Start of before Start of
public TV private start private TV public TV private start private TV
Big West Big East

(Average) 1947 1978 (Average) 1959 1992
United Kingdom 1936 1 1955 Romania 1957 2 1993
France 1935 3 -> 2 1987 Poland 1952 2 1992
Germany 1954 3 1984 Turkey 1968 4 1991
Italy 1954 2 1974
Spain 1956 2 1990
Small West Small East

(Average) 1957 1993 (Average) 1956 1 1995
Ireland 1961 2 1998 Estonia 1955 2 1993
Norway 1960 1 1992 Latvia 1954 1 1996
Finland 1957 2 [0] 1989 [1957] Lithuania 1957 2 1992
Sweden 1956 2 1992 Check republic 1953 2 1993
Denmark 1951 3 1997 Slovakia 1958 2 -> 1 1991
Netherland 1951 3 1995 Hungary 1957 2 1997
Belgium (fr) 1953 1 1987 Slovenia 1958 2 1991
Belgium (vl) 1960 1 1989 Croatia 1956 1 2000
Austria 1955 2 2003 Bulgaria 1959 2000
Switzerland 1958 2 None
Portugal 1957 2 1992
Greece 1966 1 1989
Source: European Audiovisual Observatory (Mavise) and a few extra informants.
thus not subject to TWF or other EC directives). The prevalence of choosing

to add more public channels before the launch of private TV indicates efforts
to first secure PSB.
Big East and Small East countries evidence less variation in the launch years
for both public and private television. This is obviously because of communism,
and in the later instance consequent to its collapse. But it is important to observe
that the consolidation of public television is the rule for all four categories. The
balancing strategy was first used in the UK, and soon afterwards in Finland (after
a fashion). After a long hiatus, so to say (from the mid-1950s), Belgium was
the first to launch private television in the 1980s. In all three cases the launch
included mandates for private commercial channels to fulfil public service ob-
ligations. That is a similarity between Big West and Small West countries. The
balancing strategy is evident in Big East and Small East countries as well after
the collapse of the Soviet Union. But there the new private channels were not
mandated with public service obligations. The analysis strongly suggests that
historical, political and cultural factors were more important for explaining TV
policy strategy than market size. In the interests of conclusiveness we need
examine the cases in some detail with regard to the strategic preference for
balance or consolidation.
135
The balancing strategy

In countries where the second channel was private, the overall picture shows
only slight variation in the start-up year both for public and private TV. Brit-
ain is clearly the vanguard. Britain launched public television (BBC) before
the Second World War and launched the first private channel in 1955 (ITV).
Regarding the launch of private television, Luxembourg was also active in the
period with the launce of RTL 9 into France. At that time many countries had
not even started public television yet.
Today all European countries endorse a “dual system” in broadcasting
where public and private sectors compete – although as we shall see later the
duality is by no means equal in all countries. But here our interest is to see
how some countries choose the balancing strategy from the outset. After ITV
was launched, and even with some public service obligations, the BBC found
itself in trouble with competition for audiences (although not yet for money).
The balance was restored with the launch of a second BBC channel in 1964,
and this was rebalanced in turn with the introduction of Channel 4 in 1982.
France, another Big West country, also pursued a balancing strategy, although
in its own uniquely French way. Having first consolidated French public televi-
sion by establishing three channels (1935, 1963, 1972) balance was sought by
selling off the oldest and biggest channel to the private sector, TF1 in 1987.
(Although Canal+ was operational since 1984, it is a pay-TV channel and can’t
be included in this typology for analysis).
The balancing strategy inspired the Nordic countries to develop their versions
of a “hybrid model”. Norway copied Britain on a smaller scale and many years
later (1992). Its second channel was a private station with soft public service
obligations. This model was also used in Denmark (1988) earlier, but with
the state as owner and in the beginning (until 2004) with mixed funding. In
Sweden the balancing strategy was used after 1992, but only a long time after
public sector SVT launched a second channel (1969). Finland “integrated the
balance” from the start of television and was second only to Britain in launching
a private company in 1957, called Mainos Television (translation: Commercial
Television). MTV was in a subordinate position to the public operator, however,
because YLE owned both TV channels. MTV sold commercials and bought
transmission time, mainly in prime time. This arrangement lasted until 1989.
The public channels in Finland, Norway, Denmark and Sweden followed the
British model of funding public broadcasting exclusively by license fees, which
persists today, although YLE realised about 20% of its annual budget from
fees paid by MTV prior to the dissolution of that arrangement (after 1993 MTV
got it own channel, now called MTV3 – i.e. the third channel). The balancing
strategy with has been clearer here than most other countries. Elsewhere the
public channels have depended in part (often large) on advertising revenue,
and thus feature a mixed funding model.
136
In Belgium the balancing strategy led to the second Wallonian channel

being private. Two years later a hybrid channel was launched in the Flemish
territory, VTM (1989). It was “required to provide a balanced and diverse set
of programmes that should consist of a mix of information, education and
entertainment.”7 The public stations only got their second channels after the
launch of these private competitors.
Greece was late in starting television (1966). When private stations were al-
lowed from 1989 any sense of balance quickly collapsed because, after dreadful
years of military dictatorship, there was no real support for public channels
which were associated with state broadcasting. Five or six private stations de-
veloped commercial TV for a decade before the public station, ERT, received
its second channel (1999).
Among the Small East countries, the Baltic states balanced their TV markets
quickly. In Estonia and Lithuania with only one public channel each, several
foreign channels were operational soon after independence. Latvia had 1½
public channels – I use the half because the second only broadcast about four
hours per day. But there, as well, private stations were quickly welcomed.
Of the Baltic states only Estonia demanded any public service obligations
(requiring that news account for 5% of airtime). It was much the same in
the southeast with Bulgaria (no programme obligations). Hungary took the
French route to privatisation, although with the transmitters of the second
public channel rather than the channel itself, which was continued only via
satellite reception. Hungary demanded 20 minutes of news and some “public
programmes” in primetime hours.8 With few exceptions, then, the Small East
countries never considered the new private stations as “hybrid” channels. The
dominant private sector operators, like Nova in the Czech Republic, got rid of
the few obligations that were originally mandated within several years. To be
fair, the markets probably could not carry the weight of such obligations in
those contexts: “The media went from communist control to capitalist freedom,
but advertising revenue only expanded from a very low base; this was capital-
ism without much capital.”9
Despite its effectiveness, the balancing strategy can create problems as well,
especially in small countries. The hybrid model in the Nordic countries and
Belgium was a controlled version of balance and introduced only after many
years of public service monopoly. It developed because of pressures created by
new technologies (satellite/cable) that supported demands for more indigenous
TV output as a counterbalance to the growing presence of foreign channels. At
the same time it opened broadcasting to the influence and pressures of adver-
tising needed for business operations. In the transition countries we’ve treated
7. L. d’Haenens, F. Antoine and F. Sayes (2009), p. 55.

8. Television across Europe (2005), p. 175.
9. Jeremy Tunstal (2007), p. 70.
137
here, and in Greece where public service was new and fragile, the balance
in a sense became quickly imbalanced, tipping very strongly in favour of the
private sector. These channels have not normally had programme obligations,
and the little that was initially mandated is largely abandoned by now. As we
shall later see, these countries today have the weakest public TV of all.
The strategy of consolidation

If Britain is the vanguard of balance through liberalisation, Germany is the
vanguard of consolidated public TV. Although the German system was inspired
by Hugh Green in the 1950s, who was later a Director General of the BBC,
German television in the 1950s followed a unique path. By constitutional law
broadcasting became the province of the Länder (federal states). The Länder
joined to form ARD (TV 1) and later to launch of the second public channel,
ZDF (TV 2). Besides these two national public channels, most Länder launched
regional public stations during the 1960s. This resulted in an enormous public
TV system10 built without concessions to private broadcasting or any attempt
at counterbalancing. This persisted until 1984 when two channels, one foreign
(RTL) and one domestic (Sat 1), broke the public sector monopoly.
Similarly in Italy and in Spain there were two public channels before private
television was allowed, although private TV came comparatively early in Italy
(1974) and late in Spain (1990). The Big East countries, Poland and Romania,
also established two public channels before the introduction of private chan-
nels. One of the Small West countries, Portugal, did the same. Although I have
presented these as countries representing a consolidation strategy, the broad-
casting system has been heavily politicised in all these countries.11
Among the Small West countries the Netherlands is an outstanding example
of consolidation strategy. PSB was given three channels (1951, 1964 and 1988),
and there were continuous attempts to control private broadcasting from for-
eign countries down the years. The Netherlands only licensed its first private
station in 1995. On the other hand, there was always considerable variety in
the Dutch strategy founded on a unique notion of ideological “pillars”, which
led to the formation of associations and a variety of programming and chan-
nels for pluralistic purposes.
Other Small West countries with consolidation strategies are Ireland, Austria
and Switzerland. These are all smaller countries with big neighbours sharing a
language. Perhaps it is not surprising, then, that these countries awarded second
channels to public companies and kept out private stations as long as possible.
We will come back to the transborder situation. Although we earlier treated
10. The public system commands 59 % of the TV-revenue in Germany. In no other country with over 20 million
inhabitants is over 40% of total TV-revenue in the hands of public TV. This partly demonstrates the high
costs of the federal system. See table 3 below.
11. Hallin and Mancini (2004).
138
Sweden and Denmark under the balancing approach due to their use of hybrid
models in the introduction of private television, Sweden consolidated PSB early
when SVT was given the second channel (1969) and Denmark kept its hybrid
TV 2 in public ownership even if outside its traditional PSB company, DR.
In the Small East, Czechoslovakia had two public channels, and continued
with them after the country was divided. Slovenia and Croatia had consolidated
public TV with two channels each, as well. Not surprisingly, these four Small
East countries are the only ones with a public share of viewing over 20% today
(Table 3 below).
The consolidation strategy has proven effective for national television un-
der different circumstances: Germany, the Netherlands, parts of Scandinavia,
transborder competition countries (e.g. Austria and Ireland) and small transi-
tion countries (e.g. Czech Republic and Slovenia) all introduced second and
even third public channels before private television. The reason is keyed to the
operational possibilities for developing more advanced programming strategies
via profiling than is possible with only one mainstream channel. The small
countries who instead chose to balance the broadcasting system by introduc-
ing the second channel as a private station had no chance in the short term
of launching a second public channel, or of controlling private competitors
through soft public service mandates. This lesson was learned the hard way.
When small countries want to use television to achieve national cultural aims,
the results of this analysis clearly support the view that the strategy of consoli-
dation is the better choice.
Television provision by a country, for a culture, on a market

Both country and state are relevant geographical entities for an examination
of television. We’ve seen relevance of the former in the treatment of findings
derived from the typology, and the later is demonstrated by variations in policy.
But television is about other things as well, and crucially so. Broadcasting is
intimately related to culture, variously defined but especially including language,
and it is at the same time a commodity in a market environment. Linguistic
culture, and more besides but also dependent on that, is often bigger than
the state. Today the market in broadcast media is bigger than the state, since
television content is traded on a world market (see the chapter in this volume
by Hill and Steemers). A market can cover all states sharing and comprising
an approximate culture. The four Big West countries – Germany, France, Italy
and Britain – have languages that are spoken as mother tongues (of course
with differences in dialect, etc) with smaller neighbouring countries. This is
indicated in the typology with the plus sign (+) beside the country name. We
shall keep an eye open to these relationships.
139
How a smaller country will react in TV policy to sharing a language and

culture with a big neighbour is not clear. One view suggests that audiences
simply use TV from the big neighbour as a way to save money, increase
choice, and enjoy communality. A contrary perspective suggests that reactions
may be hostile rather than welcoming, as people may feel their sovereignty
and independence are threatened. A third view emphasises the instrumental
importance of resources keyed to the wider market environment – advertising,
subscriptions and even talent face external competition from the big neighbour.
It is clear that people as audiences want to have a variety of free choice op-
tions when watching television, but at the same time they want to be served by
forms of television primarily about and from their home country and cultures.
The state must find ways to balance these paradoxical wants and needs. Due
to economies of scale, sustaining PSB is a necessity rather than a luxury. Small
countries try to strike that balance in some effective way. To this point in our
analysis we have mainly looked at TV strategy from the perspective of how
the system is structured. Here we turn attention specifically to how different
countries position public television in their policy strategies.
In Small West countries PSB was protected for decades, while in Small East
countries private stations were invited to establish themselves as quickly as
possible after 1989. How is this reflected in the strength of PSB when com-
paring the smaller countries comprising these two categories? Answers can
be found in assessing the choices respective audiences make, as measured
by share of viewing, and in their economic strength on their home markets,
which reflect politically decided conditions for PSB and competitors. The later
can be measured by assessing the PSB share of total TV-revenue.12 Sources for
the share of revenue are not very consistent, however, and more research is
needed on this important subject. Therefore the indicator at present can only
be taken as a useful estimate.
In all small countries the public proportion of revenue is higher than in big
countries. Small West countries have strong PSB operators as evident in their
shares for both audiences and revenue. Audience shares are quite close to
the shares enjoyed by Big West operators (38% vs. 43%), while PSB’s share of
revenue is much higher in Small West than Big West countries (54% vs. 39%).
The most likely explanation is that big countries have big markets that generate
resources sufficient to support both a strong public sector and a robust private
12. EAO Yearbook 2008 Vol. 1. Revenue proportion calculated from table T.1.Country.1 and/or T.1.Country.2,
It means the summarised operating revenues of the TV companies, even if the channels are established in a
different country. It also means no distinctions between commercial income and public income from license
fee etc. The net-revenue of German advertising windows to Switzerland (174 million CHF, against 365 mil-
lion CHF of advertising on SRG) and Austria (183 million Euro, against 351 million Euro of advertising on
ORF) are included in the markets of the small countries (Source: mediareports prognosis 2009). The total
revenue may be to high, since some companies like British Sky also encompass distribution services. The
EAO Yearbook 2008 Vol. 2 p. 148 presents the public stations’ relation between audience share and share
of public funding. It shows no clear correlation.
140
Table 3. PSB’s slice of audience share and total revenue (license fee funding plus
advertising)
Pct. Public share Public share
Of viewing Of revenue Of viewing Of revenue
Big West (Average) 43 39 Big East (Average) 32 33

United Kingdom 50 32 Romania 17 30
France 37 38 Poland 47 36
Germany 48 59 Turkey 23 ??
Italy 42 32
Spain 37 28
Small West (Average) 38 54 Small East (Average)

(excl. Croatia) 21 41
Ireland 40 77 Estonia 16 33
Norway 41 41 Latvia 15 36
Finland 43 50 Lithuania 14 45
Sweden 1
36 25 (38) Czech republic 32 39
Denmark2 72 64 Slovakia 23 55
Netherland 31 45 Hungary 17 26
Belgium (fr) 21 56 Slovenia 32 71
Belgium (vl) 40 68 Croatia 49 ??
Austria 44 77 Bulgaria 15 24
Switzerland 34 90
Portugal 29 31
Greece 16 27
1. In Sweden the PSB (SVT) is only TV. If SR (the radio PSB) is included, the PSB share of revenue is 38 %.
2. Denmark is an odd case: TV2 is a public station, completely financed by advertising. The station gets no state aid,
but is still owned by the state as long as several EU-court cases are pending, and therefore this station (5½ channels)
with a share of viewing of 40 % and 27 % of total revenue is categorized as public. It explains the extreme position
of Denmark in all the tables.
sector in television broadcasting. The Small West countries reserve more of their
proportionate revenue for the public stations and this seems to work rather
well in terms of securing audience share.
Defensive strategies vary partly as a function of language in transborder
television. The presence of German private channels, some with commercial
windows, has encouraged Switzerland not to open nationwide, private television
yet. Even a PSB operator as well financed as SRG has a viewing share of only
34% as a result of transborder competition from German operators. Caught in
the same dilemma Austria was rather forced by the European courts to allow (a
so far meagre) private TV presence. The viewing share for ORF is much better,
however, and still 44%. In the Nordic countries private TV was introduced both
by the state via licensing hybrid stations and by satellite transmission. The general
wealth of these small countries seems sufficient to sustain both sectors, and their
broadcasting markets are more protected due to non-international languages.
But in many Small West countries private sector competition originates out-
side the country and comes as “spill over” keyed to a shared language. Private
channels may also amount to local branches of big international conglomerates.
141
In all three situations the private stations only contribute modestly to production
of domestic programmes. Greece is the outlier because there private television
has been strongly favoured and PSB only got a second channel very late in the
game (as discussed earlier).
The Small East countries devote about the same proportion of revenue to
public television as the Big West and Big East countries, but which is much
less than in the Small West countries. Even though the proportion is similar, the
actual quantity varies as a function of comparative economic conditions. Audi-
ence shares are rather poor, with most having less than a 20% share. Croatia
is the exception with a share of 49% and largely because it consolidated PSB
before introducing private sector competition (see Table 1). The explanation for
poor results in PSB viewing in Small East countries may be related to problems
of quality in both programming and management, although the small income
in absolute terms is certainly a major factor. One really can’t make attractive
television on a shoestring budget these days. But a company can important
polished and popular programming from abroad on the cheap.
This analysis deepens understanding of the practical implications of the
TV strategies earlier considered, and again demonstrates that political and
historic factors are very important for explaining the organisation of television
in small countries – certainly more explanatory than small market size alone
can account for.
Turning attention now to private and foreign-origination television, it’s
certainly true that fulfilling the wishes of people in any domestic setting today
can’t be done only with national PSB channels. Audiences want to have choices
between kinds of channels and types of programmes. How are countries coping?
First we must analyse the strategies of small countries in this field. By focusing
on the regulatory options taken by each country we can discern patterns of
competition as the share of viewing in three parts:13
1. Share for publicly owned, national channels
2. Share for private terrestrial or satellite stations established in the country
3. Share for foreign stations (spill-over or satellite).
By legislative force the state can regulate terrestrial broadcasting, and determine
the balance between PSB and private stations. The state can’t do this regard-
ing the influx of foreign channels. Put differently, a state can either keep the
private stations in the country by licensing domestic operators with favourable
conditions, or it must accept that such provision will come from other countries
offering better conditions.
13. Source for public share is EAO Yearbook 2008, vol. 2, p. 147. The next cells are from the national chapters
in vol. 1 and less precise, because the table often ends in a group with “other channel”, which maybe should
be placed in other categories. The main picture is not disturbed.
142
For Big West countries television is not an international phenomenon inter-

nally. It might be that with regard to exporting programmes, but all viewing
is for domestic channels (Italy is an exception). The competition is domestic
and between public and private operators. Private television is indigenous,
although often with foreign ownership to varying degrees. But foreign stations
find much less opportunity in the Big West countries, while at the same time
their domestic private TV companies have less incentive to establish channels
in other countries directed at the home market. This inward focus is quite
nearly the definition of what it means to be a big country market. The irony, as
discussed later, is that some Big West countries are bases for private channels
directed to Small West and/or Small East countries, with the later manifesting
a stance we might describe as “be our guests”.
The three Big East countries are heterogonous. Turkey is a largely self-
sufficient country similar to Big West countries, while Poland and Romania
are relatively weak for big countries in the sense that foreign channels capture
shares of viewing in the 20-30% range.
The Small West countries have markets comprised of three components: 1)
public stations, 2) private stations (incl. satellites within the country) and 3)
foreign stations (either as spill over, including from public stations in neigh-
bouring countries, or channels delivered by satellite). Although on average
the three components play roughly the same role, the conditions and political
strategies are very different when comparing these countries.
At the one end of the spectrum we can position Greece and Portugal after the
fall of dictatorships. These Small West countries have allowed robust growth in
the private sector and don’t much support their public stations, either financially
or politically. The next three Small West countries (Finland, Flemish Belgium,
and Norway) have strong private, indigenous stations (termed hybrid stations
above) and only modest foreign TV. None of these countries share their lan-
guage (culture) with a big neighbour. Flemish is not the same as Dutch, and
the three Dutch public channels only have a share of 3,8% in Flemish Belgium.
Although Netherlands is a neighbour, it’s not a big one. This stance can be
described as “keep them in” because they strive to develop domestic private
operators, stimulate domestic programme production, and regulate the private
sector largely by the same rules that apply to PSB.
The next several countries have more private television from foreign chan-
nels than domestic stations. Some of the strongest channels in Sweden originate
from London, as in the Netherlands with Luxembourg. For Sweden and the
Netherlands, these foreign channels are results of economic strategies em-
ployed by the private stations, facilitated by the TWF-directive. Both Sweden
and Netherlands have argued for years that some of the private channels from
Britain or Luxembourg ought to be under their jurisdiction. This stance can be
characterised as a “bring them back” strategy.
143
The third strategy for handling private TV among Small West countries can
be deemed a “keep them out” stance because the state gives (almost) no or
only very late access for private stations, and almost all private sector view-
ing is for foreign channels. This describes the situation in Ireland, French
Belgium, Austria, Denmark and Switzerland. Excepting Denmark,14 these are
small countries with one or more dominant neighbours sharing a language.
In Ireland the British channels arrive both as spill over and by satellite, for
Switzerland and Austria the source is Germany (which also competes for adver-
tising revenue in the market by selling advertising in “windows” as mentioned
above). For French speaking Belgium, spill over competition is from France
and Luxembourg, and to such a degree that there’s been no great interest in
starting private channels.
These Small West countries have the same basic conditions: They are small
wealthy countries with mature democracies and deeply rooted traditions in
PSB. But their specific conditions vary greatly, as especially evident in language
cultures, which has a decisive impact on their strategic stance regarding the
private sector in broadcasting. This produces different policies, here character-
ised as trying to keep them in, keep them out, or getting them back.
Finally, we note that the Small East countries all opened investment markets
for private companies during the 1990s, a strategy that more or less combines
“keeping them in” with what I’ll call “inviting them in”. Among the leading
companies with stations established in several Small East countries are CME
from the USA, RTL from Luxembourg/Germany, Pro Sieben/SBS from Germany,
and MTG from Sweden.15 Thus it should be clear that how private television
is handled is also only partly a matter of market size. The big rich countries
mainly feature domestic private television while the smaller countries – both
richer and poorer – evidence different strategies depending as much or more
on other factors. Some of this is related to cultural protectionism, when the
small country is rich enough to afford that, and in other cases to efforts to grow
a market and economic prosperity in the first place. In each case, however,
politics makes the real difference in determining the basic conditions.
The open market – by satellite:

Making rules and keeping them?
The TWF-directive mandates a single market in the European television in-
dustry. Companies registered in any member state are accorded the right to
establish operations anywhere inside the EU and must not be discriminated
against when exporting services across member state borders. In return these
14. Denmark will belong to the first subgroup (”keep them in”) if TV 2 is finally privatized.
15. Association for Commercial Television (2008).
144
Chart 1. Strategic stance regarding private television operators
Share of viewing within the typology for public, national private and foreign channels (2007)
100
90
80
70
60
50
40
30
20
10
IT
FI
SI
IE
LT
PT
ES
TR
SE
PL
EE
FR
AT
LV
NL
DE
HR
CZ
DK
HU
GB
BG
RO
GR
NO
BE fr
BE vl
CH it
CH fr
CH ty
Type B
Type A
Type D
Type C
”Be our guest” ”Keep them in” ”Get them back” ”Keep them out” ”Invite them in”
Public Channels Private terrestrial or satellite Foreign (spill over or satellite)
145
companies are obligated to devote a majority of their schedules to program-

ming of European origin:
Article 4.1. Member States shall ensure where practicable and by appropriate
means, that broadcasters reserve for European works […] a majority propor-
tion of their transmission time, excluding the time appointed to news, sports
events, games, advertising and teletext services. This proportion, having regard
to the broadcaster’s informational, educational, cultural and entertainment
responsibilities to its viewing public should be achieved progressively, on
the basis of suitable criteria.
While the freedom to establish and transmit across borders is strictly enforced, this
‘demand’ for works of European origination is so elastic as to be practically com-
promised from the start: “where practicable”, when “appropriate” and “progres-
sively” on the basis of whatever can be construed as “suitable” decision-making
criteria. According to an official study conducted for the European Commission,
using “where practicable” in national regulation is not the decisive factor for how
much European works one finds on a channel; the market size seems to be more
important16. At any rate, the quota for EW was a political compromise from the
start, brought forward by France, and the Commission made it quite clear that
failure to comply would not be sufficient grounds for bringing a member state
to court.17 A judgement later issued by the European Court of Justice ruled that
Article 4 (EW) and Article 5 (Independent works) has no weight:
A television broadcaster comes under the jurisdiction of the Member State
in which it is established. The origin of programmes broadcast by the televi-
sion broadcaster or their conformity with Articles 4 and 5 of the Directive
are irrelevant in determining the Member State having jurisdiction over such
a broadcaster […] a Member State may not oppose the retransmission on its
territory of broadcasts of a television broadcaster over which another Mem-
ber State has jurisdiction when those broadcasts do not conform with the
requirements of Articles 4 and 5 of the Directive (C -14/96).
The freedom to establish has been robustly used, as demonstrated in Table 4

that reports the number of TV channels established in major states and directed
to smaller states. The quota requirement is another thing entirely, as we’ll come
back to shortly.
It’s important to understand that “country of origin” is merely a legal term for
jurisdiction, and not a cultural category. The 27 European countries transmit 667
TV channels to other parts of Europe18. Only a few of these channels are “within
16. Study…2009, p. 180.

17. Hirsch, M. and V. G. Petersen (1992) p. 46.
18. Only 549 of the 667 channels are targeted to the same 27 individual countries; some channels are directed
to “Europe” (17) or groups of countries, like “Nordic countries” (8) or “Baltic countries” (7) or to other single
countries like for instance Russia (33).
146
Table 4. Number of channels directed to other European countries
Difference,
From (country) To (country) “balance of
”export” ”import” trade”: Relative
Number of channels (to Europe) (from Europe) Surplus or deficit? difference
United Kingdom 380 24 356 0,88

Sweden 71 33 38 0,37
France 46 37 9 0,11
Italy 33 27 6 0,10
Hungary 31 41 -10 -0,14
Luxembourg 31 0 31 1,00
Germany 20 32 -12 -0,23
Spain 13 18 -5 -0,16
Netherlands 12 24 -12 -0,33
Austria 5 8 -3 -0,23
Czech Republic 5 25 -20 -0,67
Turkey 5 13 -8 -0,44
Romania 4 31 -27 -0,77
Belgium 2 5 -3 -0,43
Lithuania 2 1 1 0,33
Portugal 2 36 -34 -0,89
Finland 1 38 -37 -0,95
Greece 1 3 -2 -0,50
Ireland 1 12 -11 -0,85
Latvia 1 4 -3 -0,60
Slovakia 1 4 -3 -0,60
Bulgaria 0 19 -19 -1,00
Denmark 0 39 -39 -1,00
Estonia 0 9 -9 -1,00
Croatia 0 9 -9 -1,00
Poland 0 55 -55 -1,00
Slovenia 0 2 -2 -1,00
27 countries 667 549 118 0,10
Source: EAO: Mavise database. Excluding channels to own country or to countries outside Europe
the culture”. Britain clearly dominants, and by an enormous margin, transmitting

380 channels to other European countries – over half of the total. The transition
countries in Eastern Europe receive 189 of these British channels and the Nordic
countries get 61 channels. The companies behind these offers are typically from
the USA (Disney, Time/Warner, Sony, Discovery, MTV) or Britain (BBC, Flextech,
Newscorp), and feature domesticated versions of the same content broadcast in
their home markets. In London we also find companies from other European
countries including Viasat (Sweden) and Prosieben/SBS (Germany), directing their
channels to small countries. We will designate all this type as Re-flagged chan-
147
nels, borrowing terminology from international shipping practices where a ship

from a particular country gets itself re-flagged as though from another country
in order to get around some rules that would otherwise constrain operations.
Luxembourg only transmits 31 channels, but with their handful of RTL-
channels they enjoy significant market shares in Wallonia (26%) and the
Netherlands (24% share). The five channels broadcasting from Luxembourg
to France, and the three to Germany, are niche channels, however, with little
impact in these big markets.
Sweden is the Nordic centre for international distribution, mainly from
MTG-channels and versions of Canal+ which are broadcast to other Nordic
and Baltic countries. But Sweden also receives many channels, mainly from
Britain. Hungary has the same double role in Eastern Europe.
Germany originates seven channels targeting Austria and seven also for
Switzerland. These count as being “within the culture” because they share a
common language and create strong competition for the indigenous PSB stations
in the two smaller countries. As discussed earlier, this explains their resistance
to opening space for private channels, or at least their hesitance.
Re-flagged channels
Now we return to our discussion about the quota for European works, which
is set at 50%. In a sense that is supposed to be the price that imported chan-
nels are expected to pay in return for the opportunity to do business in the
country of reception. If a channel does not fulfil the quota and instead uses
programmes originating elsewhere, and that usually means America, then it
should by rights be construed as engaging in unfair competition. It is certainly
unfair for exclusively domestic public service channels, which as a rule adhere
to the law and always feature over 50% in European works. Little or nothing is
mentioned about this in discussions about PSB distorting markets and creating
an unfair playing field, which rather smacks of hypocrisy.
When a channel does not comply with Article 4 (about EW), the member
state (country of origin) is asked to explain the reason for this to the European
Commission competition authority. The Commission categorises explanations
under eight headings that are listed below19.
1. Programme orientation and special-interest nature of the channel
2. Higher costs of European programmes
3. Subsidiaries of non-EU companies
4. Groups of channels belonging to the same broadcaster achieve the re-
quired proportions when taken together, but not individually
19. Commission of the European Union (2008), pp. 15-17. The next report (2010) confirms the reasons.
148
5. Progress achieved since the last status (‘non-slip-back’ clause)

6. The recent nature of the channel (it takes some time to….)
7. Specific market conditions during the reference period (like Olympics)
8. Low audiovisual production capacity or restricted language area (small
country)
Only explanations 5,6 and 8 are supposed to be approved by the Commission
as acceptable explanations for failure to comply.
The consideration for small markets (number 8) is certainly not pertinent
to Britain. Reviewing the facts one would think they have quite a lot of ex-
plaining to do: Britain’s regulatory authority, Ofcom, reported 342 channels
in 200620. Of the total 158 (46 %) devoted less than 50% of transmission time
to European works. The most common explanation given by Ofcom was
“difficulty in finding European programmes at competitive prices” (number
2 above). The European Commission rejected this explanation: “Given the
objective of Article 4 to foster the European audiovisual media industry, this
reason cannot be taken into account.” Despite this, the EC then praised Brit-
ain for having stabilised the average result at around 53% and noted that for
terrestrial channels in Britain the overall proportion of European works was
87%. Britain implements the directive with higher quotas for its own terrestrial
channels, but only “where practicable” for its many satellite channels. It is not
surprising they would implement this at home because it supports growth
and profitability of their audiovisual industries that export to a world market,
and especially in Europe.
In a nutshell, this shows the two-faced character of Britain, the dominant
distributor in European television programming. With the BBC and private sec-
tor quality stations Britain is taken to be a standard for many and much smaller
countries that point to the British case as if it were ideal and can be modelled.
But British authorities allow Ofcom to turn a blind eye to the hundreds of Ameri-
can and other channels that are blunt about why they don’t include European
programmes: They are too expensive. In this Ofcom arguably demonstrates
disrespect for the cultural dimension of the TWF directive. In the Netherlands
and Hungary the authorities fine their channels if they don’t comply. Not so
in Britain with its much greater size, influence and wealth. One wonders what
would happen if Ofcom did the same – or even tried?
Examining some of the smaller countries mainly on the receiving end of
the stick is instructive for seeing which channels don’t comply and what the
20. The 342 channels include channels to Britain only, with 380 channels in Table 4 above only for export. The
explanation is the growth of channels during the three years from 2006 to 2009 For 2008 Ofcom reported
about 417 channels of which 225 channels (54 %) did not comply. So the situation has worsened, not im-
proved.
149
explanations are, if any.21 Initially the EC concentrated on channels with a

viewing share over 3%. Eventually realising that fragmentation of audiences is
a real problem, this approach was abandoned in the 2008 report. In Table 5
below we have collected information on four aspects of importance to the task:
1. Audience data in the reception country, which is needed to evaluate
whether the channel is important in the market
2. Country of jurisdiction, also called “origin” although the channels are
normally not receivable in the country of origin but only externally
3. Data on European works reported to the EC by the country of origin
4. Type of explanation (by number category as reported above) offered to
account for underperformance.
Unfortunately the report to the Commission is only biannual so it is not al-
ways up to date regarding trend in the specialisation of channels within single
(domestic) markets.
Note that in all but one case the explanations offered are not among those
that are supposed to be accepted by the EC (the exception being the case of
Estonia with Sweden’s Silver channel). Most often the explanation is related to
profit margins. Explanation number two accounts for 15 of the total, a bit less
than half. Worse yet, 12 of the total (about one-third) don’t offer any explana-
tion at all. This is the height of arrogance, in my view.
In Austria around 10% of viewing time is claimed by German channels that
programme less than 50% EW, but organise special advertising specifically
targeting the Austrian market. Switzerland evidences a similar situation with
over 11% viewing of German channels that programme too little EW. Of course
Switzerland is not a member of EU and therefore not “protected” by the TWF-
Directive. But the example holds, regardless of political affiliations.
Portugal is targeted by three satellite channels from Spain, all without clear
identification of authorisation and fail to report quota results to the EC. The
Netherlands is hit by underperforming channels from both the UK and Luxem-
bourg. This makes their strategy of “getting them back” even more understand-
able. In Estonia one finds other countries of origin, namely Sweden and Italy,
not effectively controlling their satellite channels. In Denmark 13% of viewing
is devoted to UK-owned channels with less than 50% EW. Note that Viasat’s
main channel, TV 3, is versioned for different Scandinavian countries but always
with less than 50% EW and also different market shares (Denmark 22% EW
and 5,3% share; Norway 17% EW, 5,2% share; Sweden 21% EW, 9,3% share).
21. The interest here is to study the small countries as ”victims” of the big countries due to lack of rigour in
regulation, therefore we ignore the cases where (small) countries ignore the non-compliance of their own
national channels. Details for instance on Denmark can be found in Commission of the European Union
(2008).
150
Table 5. Some channels not complying to the 50% European Works, their market
share in the receiving country and the explanation given to the Commis-
sion
share of
Country viewing EW %
Country of reception Channel of origin 2007 2006 Explanation
Austria Kabel 1 DE 2,5 26 1 – Films

Austria RTL 2 DE 2,6 43 None
Austria Super RTL DE 3 33 1 – childrens
Austria VOX DE 3,9 45 None
Belgium (Valloon) Club RTL LUX 4,8 42 1 – cartoons
Denmark TV 3 DK UK 5,3 22 2
Denmark Kanal 5 DK UK 2,6 8 None
Denmark TV 3+ UK 3,7 25 None
Denmark Discovery DK (Nordic) UK 1,3 43 2
Denmark Cartoon network (Nordic) UK 1,2 30 2
Hungary Discovery Channel (CEE) UK 0,8 45 2
Hungary National Geographic (CEE) UK 1 44 2
Hungary Cartoon Netwok (EMEA) UK 1,4 21 2
Hungary Hallmark (CEE) UK 0,7 19 2
Hungary AXN (Europe) UK 0,6 9 2
Norway TV 3 Norway UK 5,2 17 2
Norway Discovery Nordic UK 1,4 43 2
Norway Disney Nordic UK 2 30 1–3
Sweden TV 3 Sweden UK 9,3 21 2
Sweden Kanal 5 UK 8,2 18 None
Sweden TV 6 UK 4,5 35 None
Switzerland, (Germansp) Kabel Eins DE 2,2 26 1
Switzerland, (Germansp) MTV DE 0,6 30 1
Switzerland, (Germansp) RTL 2 DE 2,7 43 None
Switzerland, (Germansp) Super RTL DE 2,8 33 1
Switzerland, (Germansp) VOX DE 3,5 45 None
Portugal Panda ES not identified 2,6 ?? ??
Portugal Hollywood ES not identified 1,6 ?? ??
Portugal Odisseia ES not identified 1 ?? ??
Netherlands RTL 8 LUX 0,7 46 None
Netherlands Discovery (Benelux)) UK 1,7 44 2
Netherlands National Geograhic Channel NL UK 0,8 40 2
Netherlands Nickelodeon (Europe) UK 2,1 26 2
Estonia Fox Crime IT ?? 31 None
Estonia Fox Life IT ?? 38 None
Estonia TV 1000 Classic SE ?? 10 None
Estonia Silver SE ?? 48 5
The proportion of European works is to a high degree explained by the dif-

ference between private and public ownership, irrespective of country size.
The official study for the Commission found that on average PSB operators
151
have very high degrees of EW (78%), while subscription channels offer about
33% – again far below the 50% requirement.22
Frustration over Jurisdiction

During a May 2005 review of the TWF directive in the run-up to passage of an
updated version called the Audiovisual Media Services directive (AVMS 2007),
eleven smaller countries expressed concern over the way the principle of
‘country of origin’ works: Austria, Belgium, Czech Republic, Estonia, Ireland,
Latvia, the Netherlands, Poland, Slovenia and Sweden. In a letter to their fellow
member states submitted in the Council of the European Union, these countries
requested the EC should deal more with the issue of jurisdiction in the review
process. The concerned countries positioned the ‘country of origin’ principle
as the basis for assessment, but also noted that receiving countries have the
right to protest if, for instance, protection of minors or the list of national sports
matches are involved. As a general principle they observed:
Broadcasting is an important feature of the cultural landscape. Given the
impact of broadcasting, its indispensable role in the social, democratic and
cultural life of our societies and the importance of preserving cultural diversity,
one cannot regard broadcasting as a solely economic activity or service. Indeed
the promotion of cultural and linguistic diversity is one of the key principles
underpinning the Directive.23
The Swedish government wrote to the Commission again on 9 December
2005, this time on behalf of 13 smaller member states after Malta and Portugal
had signed on their support.
The AVMS directive was unanimously accepted in October 200724. The small
countries earned some concessions. They have the right to press their complaint
directly to the country of origin and can argue for circumvention with respect
to “the general public interest” of the receiving country. It “includes inter alia,
rules on the protection of consumers, the protection of minors and cultural
policy.”25 The Commission is required to react within three months and may
decide that the reasons are not compatible with the Treaty. In the end it will be
up to the European Court of Justice to sort out whether the new directive gives
small countries better guarantees for avoiding victimisation by TV corporations
from big – or small – countries. Sad to say, but breaking the quota for Euro-
pean works is still not considered an infringement circumventing the Treaty.
22. Study…2009, p. 173.

23. Brussels 13 May 2005, Doc. Nr 8806/5. http://register.consilium.europa.eu/servlet/driver?page=Advanced&
typ=&lang=DA&fc=REGAISDA&srm=25&md=100&ssf=DATE_DOCUMENT+DESC&cmsid=639.
24. Directive 2007/65/EC , Official Journal L 332, 18/12/2007.
25. AVMS directive Recital 32, which has a new wording compared to the Recital 44 of the TWF-directive, but
probably no different meaning.
152
Competition policy and state aid to PSB

The EU is premised on the principle of creating a single market, which means
a base on economic relations and development. That framework grounds di-
rectives mandating the free flow of international TV within the EU, which as
we have seen mainly means from big countries to small countries. The PSB
companies are the exception, and increasingly the target of attacks by private
sector lobbies. PSB operators are domestic electronic media, live mainly from
state aid in various forms, and serve to counterbalance the general trends
treated in this chapter – even to offset problems associated with the free flow
of what amount to cultural goods and services. In the European Union PSB is
legitimated in the Amsterdam protocol (1997) that states: “the system of public
broadcasting in the Member States is directly related to the democratic, social
and cultural needs of each society”.26 The Commission later defined the bounda-
ries for PSB more clearly with the Broadcasting Communication in 2001.27 To
minimise the impact of state subsidies on competition, the Commission requires
that member states define the scope of the public service remit and limit the
amount of state aid to the actual costs of the public service.
This treatment of PSB is rooted in the general ban on state aid articulated in
Article 87 (1) of the Treaty and the exemption for services of general economic
interest in Article 86 (2), which includes PSB. The “cultural exemption” in Article
87 (3) (d), however, does not apply to broadcasting – strange as that seems.
Broadcasting is not considered as culture in the narrow sense to which that article
applies, even though a single TV programme or film can qualify as culture.28
The Broadcasting Communication 2001 was allegedly drafted to respect the
concerns of the smaller member countries: “The Commission will also take
into account the difficulty some smaller Member States may have to collect
the necessary funds, if costs per inhabitant of the public service are, ceteris
paribus, higher” (Article 62). In a note the EC added: “Similar difficulties may
also be encountered when public service broadcasting is addressed to linguis-
tic minorities or to local needs.” Despite the article and note, in none of the
twenty cases about state aid decided since 1999 has the Commission based any
26. Protocol on the system of public broadcasting in the Member States, Official Journal, C 340/109. Note that
the letter from the 13 small countries about jurisdiction (note 23 above) used the same phrase.
27. Communication from the Commission on the application of State aid rules to public service broadcasting ,
Official Journal C 320, 15/11/2001.
28. In the cultural area the Commission has accepted many schemes of support for media and readily so in
smaller countries, also by taking the general aim of diversity into account (Treaty Article 151 (1): The Com-
munity shall contribute to the flowering of the cultures of the Member States, while respecting their cultural
and regional diversity and at the same time bringing the common cultural heritage to the fore). Based on this
cultural exemption, the Commission allows up to 50 % state aid to cultural films and audiovisual programmes
(Communication on cinematographic and other audiovisual works, COM/2001/0534 final). This scheme has
been used mainly by small countries (for instance: Ireland, Denmark, Slovenia, Czech Republic) or provinces
in big countries like Spain or Germany. Although this way to support national, cultural programmes of all
sorts – except news, which are related to ‘democratic’, not ‘cultural’ aims – may be an advantage to small
countries, we must keep in mind, that the amounts are small and each scheme is only for a limited time.
153
decision on the size of the market.29 This restraint is critical because PSB plays
a relatively much greater role in the Small West countries than in Big West or
all East countries – as demonstrated earlier in this chapter.
It is also important to observe that all cases about state aid have so far
only been registered about PSB in the Big West and Small West countries. No
complaints have been registered against PSB in any size Eastern state. The
complaints have been lodged by private TV companies, usually in collabora-
tion with their Association of Commercial Television in Europe (ACT). They
don’t have any need to complain about PSB in the eastern countries because
it is so weak to begin with, and there the conditions for private television are
extremely liberal. But for the Small West countries where PSB is relatively big
and more popular, limiting its development potential is their best opportunity
to grow market share quickly and cheaply – i.e. by rolling back the incumbent,
which in these countries are mainly PSB operators. The ramifications can be
quite serious for these countries, and not only for their PSB providers – certainly
more serious than for big countries where market volume offers ample resource
for both PSB and private media companies. Ironically, however, the complaints
against state aid for the public media sector most often come from the private
“re-flagged” companies based in big countries like the UK and Germany – the
very companies that do not themselves comply with quota requirements for
European works. The whiff of hypocrisy is pungent here. Their strategy is
self-serving and has nothing actually to do with anything other than profits: If
they can break PSB in the big countries then PSB in the small countries is far
more vulnerable and with less room to maneuver because they have far less
influence and resources to lobby with in the first place.
When the Commission issued the new Communication on Broadcasting in
July 2009,30 there was suddenly much activity around the article about small
countries – now Article 42. A new clause was added (emphasised in italics):
“The Commission will also take into account the difficulty some smaller Member
States may have to collect the necessary funds, if costs per inhabitant of the
public service are, ceteris paribus, higher, while equally considering potential
concerns of other media in these Member States”. The new sentence has an
interesting history. In the first draft presented in November 2008 this Article
(then number 62) was absent. In the next draft from April 2009 it was back,
but without the clause. The concerns of private commercial media were not
incorporated with the quoted clause until the final version in July 2009 (now
Article 42). What happened?
The answer becomes clear when reviewing the response of private media
organisations to the April draft. ACT wrote: “First, that much is made by pub-
29. A list of all cases is available at http://ec.europa.eu/competition/sectors/media/cases.html.

30. Communication from the Commission on the application of State aid rules to public service broadcasting,
Official Journal C 257 , 27/10/2009.
154
casters of the alleged difficulties facing public broadcasters in smaller linguistic

markets. But this point could equally be made of commercial broadcasters –
ACT member companies active in smaller linguistic regions have successfully
adapted their cost base to meet their market reality and their publicly-funded
competitors must not be free of the obligation to do the same.”31 One very
effective way members of ACT (including the transnational operators such as
RTL, MTG and SBS) achieved such remarkable results is by adapting their cost
base by using lots of American programming instead of the more expensive
European works they are obliged to provide (at least 50%). It is surely ironic
to observe that their best advice for PSB is to “adapt their cost base” too. Far
beyond market distortion there is surely some logic distortion in all of this.
Such senseless advice is simply not an option for PSB operators, even if some
might want to pursue that path. If they tried one can be certain that regula-
tors would pounce on any violation, undoubtedly in part as a response to yet
more complaints lodged by the ACT and its members, to make sure they fulfil
their remit.
The other significant reply to the April draft came from ENPA, the European
Newspaper Publishers Association. ENPA seemed to think the Commission was
adopting a new provision about smaller member states and strongly opposed
that. ENPA strongly preferred the provision be deleted, but short of that they
proposed a new sentence should be added: “also considering the particular
situation of commercial broadcasters and newspaper publishers on the relevant
market and potential negative effects that State aid to public service broadcasters
could have on them and their opportunities for development of new business
models”. This is all but certainly where the Commission got the inspiration
for the final clause emphasised in the quote above – and in the very last days
before publishing the Communication.
We have dealt with this in detail because of its obvious importance to the
private media industry as they have devoted so much time and expense lobbying
the clause. The private sector appears to be arming themselves for a new round
of complaints about state aid to PSB in small countries – laying a groundwork
they can build on. The detail is also useful to illustrate the role of lobbies and
compromises in the policy process, indicating aspects that really have little or
nothing to do with size even when the results have serious implications for
size-related factors – and even when small countries (a majority by number)
complained that what was happening wasn’t fair or helpful.
The most debated issue in the new Communication was that the Commission
strongly advised a “public value test” [PVT] for PSB’s new activities (mainly
online, and thus actually efforts to roll back PSM). The United Kingdom inaugu-
rated this system as a way of handling concerns about the BBC, often accused
31. The contributions to the consultation (7.04-8.05.2009) are available at: http://ec.europa.eu/competition/
consultations/2009_broadcasting_review/index.html.
155
of using its enormous size and brand power to overwhelm private operators
there.32 PVT has two assessment components: 1) a public value assessment
(will this serve democratic, social or cultural needs?), and 2) a market impact
assessment (will the negative effect on competition outweigh potential public
benefits?).
The Communication demands that member states develop some similar and
systematic process for value assessment with public consultations (Article 84)
and a market impact assessment (Article 88). It is doubtful whether the Com-
mission has the right to demand this from the member states, as by Treaty law
states have the competence to decide on the domestic public service remit.
But efforts to comply are already underway, and we can expect that putting
this kind of system in place will be an added burden on already stressed ad-
ministrative resources in most small countries. The cost of a single PVT test
in Britain has been in the double-digit millions of pounds. Aware of this, the
Commission has accepted that tests may be conducted with less exhaustive
rigour in some smaller countries, like Belgium and Ireland.33
While the first state aid cases were raised by private companies complaining
about subsidies, the recent trend is for complaints about the activities of PSB
on the internet and in other new media (e.g. mobile). So it is really an effort
to exclude PSB from any realistic potential to become PSM. Now newspaper
publishers are getting more involved because much in their development strate-
gies relies increasingly on harnessing opportunity in new media to offset loses
in the old one. They are keen on PVT because it offers an already accepted
route to curtail the drive for PSM that may hinder their self-interested objectives.
And they tend to focus directly on the smaller member states, as well, because
newspapers are still more domestic than international. So although the general
competition policy of the EU does not take market size into account, it clearly
is a factor in assessing which lobbies are involved with which complaints in
which countries, and for which essential reasons. The clause about small mar-
kets in the Broadcasting Communication has not been used, and may never
be. Even so, it was recently watered down when referring to “other media” at
the initiative of private sector publishers. That can only increase the dangers of
vulnerability for small countries, especially where PSB is of great importance
not only in broadcasting but, moreover, in the development of public services
online. The sheer burden of proof in responding to these cases and, in the
future, implementing PVT is a challenge of formidable dimensions.
32. The BBC Trust is responsible for the test: http://www.bbc.co.uk/bbctrust/about/how_we_govern/new_ser-

vices/index.shtml.
33. See state aid decisions about Belgium (E 8/2206) and Ireland (E 4/2005).
156
Conclusion
European history with PSB is indigenous and differs across regions. Western
and Eastern countries have different historical experiences and, correspond-
ingly, different levels of resources and perspectives on values. It is no surprise
they feature different media policies in turn. Similarly, southern Europe is quite
different in many ways compared with northern Europe, and unsurprising that
media policies differ as a result. Obviously size matters for how broadcasting
is organised and mandated in a country. Big countries and companies have
more resources and powers than small ones. Despite the differences, we have
noted important similarities among small countries. In the endeavour to nourish
vulnerable national cultures these countries share a common interest that is in
many ways oppositional when compared with big countries, which are often
neighbours and may be part of the problem from a small country perspective.
That is especially clear when treating the impact of company size, for example.
The small countries try to defend their national cultures, more or less against
the odds, which is a central justification for PSB in those countries.
But this chapter makes it quite clear that size is not the only factor, and may
not even be the most important with regard to policy and the dynamics involved
in making that. There are important differences between small countries, as
well, and not only between big and small. Small Western countries have had
as strong a PSB structure as the Big Western countries because they’ve been
able to afford it (so far, at least) and they’ve had political traditions that enabled
it. The Small Eastern or transition countries have been in a different situation
and have invited private stations to develop their audiovisual and advertising
markets. The internal, national policies for media development in the small
countries of Europe tend to be more different than similar, on the whole. That is
an important observation that may counsel against efforts to ‘harmonise’ media
policy across states. When histories are different, resource bases are different,
languages are different, value structures are different, and internal relations
are different, why, exactly, would media policies seeking to ignore – even to
erase – differences be expected to succeed?
The common interest among small states became clear when we introduced
the transnational perspective with foreign television. Foreign TV is not relevant
for big countries but is clearly decisive for small ones. As demonstrated, Small
Western countries react with different strategies in efforts to keep the foreign
presence in their audiovisual space, and culture, within some reasonable limits.
Sometimes this involves keeping them out, and sometimes bringing them back
under domestic control. The path taken depends on various factors, includ-
ing nationality of neighbours and the behaviour of private companies, as well
as general historical preferences rooted in value structures and also resource
parameters. The Small Eastern or transition countries have less room for ma-
157
noeuvre, or have opened their markets as a matter of principle due to years

of authoritarian state control that has encouraged a less suspicious embrace of
liberal philosophy – even seeing that as a source of liberation.
Despite differences between states, the single market and the TWF directive
have underlined the common interest of small countries. Small western and
eastern states were united in the attempt to modify the consequences of the
freedom to establish private commercial television after 2005, with even one big
country joining (Poland). We argue that the free flow of TV should be condi-
tioned by the demand for 50% European works, as already legally enacted, but
further that the law should be enforced on the private sector just as firmly as
it has been on the public sector. As we have seen in practice, however, it does
not work like that. Foreign channels with significant market shares operating
in small countries get along with much less than 50%, breaking the law with
impunity. Indeed, they profit from ignoring the law. In that way they cause
injury by fostering unfair competition in small, vulnerable media systems – and
on their public companies in particular; the very companies and sector they
accuse of distorting markets and causing an unfair playing field.
It is important to note that the countries of origin are not negligent. They
honestly report the facts to the Commission. But they most often either offer no
reason for ignoring the quota law, or seek to excuse violations by pleading that
it costs too much to do the right thing. The Commission responds with words
that encourage those supporting the quote system, but which in practice don’t
amount to anything. They can’t do much about these infractions. It’s a paper
tiger because this was politically declared from the start as something that would
not be legally binding, despite being a law. Unfortunately the cultural effects
are obvious: the proportion of American programming that the TWF directive
was supposed to restrain by stimulating a European production industry and
audiovisual culture has exploded rather than withered, as especially evident
on channels in all the small states. If the big states also accept many US pro-
grammes there is reason to think it more acceptable because they enjoy a much
greater range of domestic alternatives and can better afford to produce more.
The other arm of EU regulation in the field of broadcasting is the competi-
tion policy, especially the regulation on state aid. This is still in development
and the Court of Justice has so far defended the sovereign right of member
states to define the PSB remit as a domestic competence. But the Commission’s
primary responsibility is defending the Treaty, and so the EC must proof any
complaint about state aid to PSB. Every proofing requires threading the needle
between Article 87 and Article 86, which the Commission in July 2009 has de-
tailed in the call for PVT systems. This fight is not really with the Commission,
but rather with the big, private media companies who harass member states for
allowing their PSB companies to do what these corporations consider far too
much, mainly because it limits their possibilities for unfettered dominance and
158
expansionary strategies. Because PSB companies are proportionately bigger in

the small richer markets and weaker in the small poorer markets, where the
privates have a free hand anyway, they have concentrated their attacks on PSB
in the West – where the money is. The growing focus on the small countries
was clear in their lobbying for the new Communication where the clause on
special concerns for small markets was diluted in the final draft.
Has the typology that grounds this chapter been confirmed? The typology
is confirmed in the sense that two dimensions are demonstrated as having em-
pirical reality. Television was historically established first in the western part of
Europe according to the public service model, in both small and big countries.
In the east the PSB model was only an option after 1989, and the position of
the sector is generally much, much weaker and not nearly as popular as the
private commercial sector. This reality underlines the decisive, determinant
weight of political and cultural factors from the beginning, and continuing.
Although size has not been as important historically, it seems fair to conclude
that it is becoming more important in the context of the EU single market where
small countries are increasingly more vulnerable. Transnational companies are
directly investing in the eastern countries, while in the west they are working
mainly by satellite from bases in liberal host countries. This avoids costly de-
mands for domestic content quotas and public service obligations.
We expect that in the long run the peculiar history of European broadcasting
in the 20th century will be retired and that the effects of the size of countries,
companies and resources will come to dominate. Market liberalism will certainly
rule if the populations and politicians of small states forget lessons learned the
hard way in their unique and related historical experiences. If that happens,
the TV strategies of small, open countries will be best understood by looking
at big companies as their antagonists rather than at big states.
We suspect that policies and regulation of media in small countries will find
it increasingly difficult to protect and develop independence in audiovisual
policy and culture. European policymakers really should consider far more
deeply than they have so far whether the single market necessarily means a
homogenous market. Would that provide any advantage for small countries
trying to resist a take-over by outside channels and companies? The evidence
suggests the opposite, in fact, as we survey the prevalence of American pro-
grammes today in European TV channels.
For their part, media policy research needs to focus on the transnational
character of the single market and avoid the practice of relying on classic
country-by-country analyses, which very often don’t connect or add up to
anything generalisable. The most fruitful questions may arise when the ap-
proach is reversed: Europe never had a shared, common TV culture. The single
market project has invited private companies to try to create one. And they
appear to be winning in their battle against PSB. They have certainly been
159
persistent. The biggest obstacles to complete dominance have been stubborn

domestic PSB providers. But the private sector has learned how to leverage
the EU competition rules and judication system to weaken PSB by chipping
away at its resource base, limiting its scope for development, using their news
channels to harass and ridicule PSB, and taking advantage of deep pockets to
court favour. In domestic policy analyses one should keep an eye on whether
governments in member states argue that the EU is infringing their preroga-
tives for PSB. This is vitally important if TV is still to be important for national
culture in the future.
160
The Governance of Broadcasters
in Small Countries
Chris Hanretty
‘Governance’ is one of many social science concepts defined in numerous,

often incompatible ways, and which can be applied to bodies of vastly differing
dimensions – from small agrarian communities (Ostrom 1990) to global network
infrastructure. Part of its usefulness results from the fact that governance covers
both political and market activities. ‘Corporate governance’ is shorthand for
how companies are led, overseen, and audited, both internally and externally.
When applied to political organisations, ‘governance’ is often used as if it were
synonymous with ‘government’. In this chapter, I take advantage of the elasticity
of this term, and discuss the governance of both public and private broadcasters.
Although the two types of broadcaster share similar concerns, I concentrate
on the more political aspects of the governance of public broadcasters and the
more market-oriented aspects of the governance of commercial broadcasters.
In doing so I neglect the market-oriented aspects of public broadcasters, and,
to some extent, the political role of private broadcasters. These aspects are
also important: public broadcasters continue to hold ‘disproportionate’ audi-
ence shares in their respective television markets (Picard 2002); and media
entrepreneurs – either understood as individual Citizens Kane or understood
collectively – invariably wield political influence whether they admit it or not.
I also choose to dedicate more space to public broadcasters because they are
public institutions. Public broadcasters have governance structures which are
relatively specific about the obligations of certain groups of actors – national
governments, parliaments, audit courts, and so on. Consequently, certain as-
pects of PSB governance can be readily compared across countries. The same
is not always true of the governance of private media companies: I therefore
concentrate on one unwritten and constantly changing aspect of the govern-
ance of private companies, namely ownership structure.
As with the other chapters in this collection, my particular interest is the
governance of broadcasters in small countries – or rather, I look at aspects of
the governance of public and private broadcasters in general to see whether
161
Chris Hanretty
that differs between big and small countries (as defined for this project). I give
reasons why we should expect broadcasters in smaller countries to differ in
key aspects of their governance. Ultimately, however, I find that key govern-
ance features differ little between countries, regardless of size. In broad terms,
public broadcasters have the same distance from government in small countries
as in big countries, whether one considers the formal legislation that governs
these broadcasters or how that formal legislation is translated into practice. The
ownership structure of private broadcasters also looks similar in small and big
countries. These are ‘negative findings’ only in the clinical or academic sense.
Whether the findings are negative or positive for society is a different issue. The
finding, for example, that the level of public broadcasters’ formal and actual
independence from government does not vary significantly between small and
big countries undercuts a common argument in many classic works of political
science that smaller countries are more virtuous (assuming of course that PSB
independence is a virtue). Viewed differently, this finding suggests that small-
ness does not condemn any country to a particular pattern of governance, and
that there is therefore room for careful institutional engineering.
A note about smallness in the present application

As other contributors to this volume have noted, ‘smallness’ is complicated. It
can be perceived or actual; demographic, geographic, ethnographic or linguistic.
Here I am almost always talking about countries that have small populations. I
also often assume that smallness and bigness are matters of degree, and that if
there is any relationship between smallness and independence then it should
be a straightforward linear and additive relationship. Broadcasters in countries
with populations of three million will be x amount more independent than
broadcasters in countries with populations of two million, who in turn will be
x amount more independent than broadcasters in countries with populations
of one million. That assumption doesn’t always hold. In some cases – figures
1 and 2 for example – it is easier to see a relationship by taking the logarithm
of the population.
Governance of public broadcasters

Public broadcasters – those which aim to broadcast a wide range of socially
useful content, which are partly or wholly funded by state revenues or special
state-sanctioned taxes, and whose boards are directly or indirectly appointed
by state agencies – are not part of the state but operate at arms’ length from it.
That relationship differs from country to country, and in some the relationship
between the public broadcaster and the state is perilously close. It is revealing
162
The Governance of Broadcasters in Small Countries
that the Italian public broadcaster, Rai, is often described as the ‘televisione
di stato’, or state television in Italy. But public broadcasters normally operate
in a murky zone that is neither part of the government proper, nor of civil
society, nor of the market.The term ‘governance’ is therefore very appropriate
for this context.
Borrowing from RAW Rhodes, we can describe the ‘governance’ of public
broadcasters as encompassing the interdependent and repeated interactions
between the state and the broadcaster, each understood as autonomous within
its own sphere. These interactions have both their formal and ‘real’ elements.
The formal elements are concentrated in the legal texts which established the
broadcaster, which guarantee its continued operation, and stipulate, for example,
what the state is obliged to provide the broadcaster, and what the broadcaster
is obliged to provide in return. Although these elements have become less
legalistic in recent years (Coppens and Saeys 2006), an undue concentration
on the black-letter provisions of these laws is ultimately extremely stultifying
for everyone except lawyers. Indeed, this is part of the reason why the term
‘governance’ has become so popular: it draws attention to how these provisions
are cashed out in terms of interactions between the state and the broadcaster.
One way of examining the governance of public broadcasters in small and
large countries would be to run through a set of interactions – say, all those
interactions concerning the licence fee, all those concerning new operations,
all parliamentary hearings and committee meetings, and so on. Indeed, later in
this chapter I look at one aspect of governance in particular, namely whether
national legislatures are involved in appointing members of the public broad-
caster’s board. I would suggest, however, that it is more helpful to consider all
of these aspects as part of the broadcaster’s independence from politics. The
independence of public broadcasters from politics is one of the two classic
issues in public broadcasting.1 It is a classic issue because of perpetual ten-
sion between politicians’ desire to secure better coverage from the broadcaster
(which often enjoys a considerable influence on the reporting of current af-
fairs), and the role those politicians play in granting the broadcaster the funds
and the institutional support needed to continue operating. It’s an issue that
benefits from analysis through the lens of governance precisely because it has
both formal and real elements.
We can describe the independence of the broadcaster in real, or de facto
terms, as concerning “the degree to which PSB employees take day-to-day
decisions about their output or the output of subordinates, without receiv-
ing and acting on the basis of instructions, threats, or other inducement from
politicians, or the anticipation thereof; or considering whether the interests
of those politicians would be harmed by particular choices about output”
(Hanretty 2010). If politicians are constantly ringing up news-desk editors to
1. The other is the degree to which public broadcasters crowd out free market activity.
163
Chris Hanretty
have running orders changed, then the broadcaster is not at all independent.
Correspondingly, we can describe the formal or de jure independence as the
degree to which the law or laws governing the broadcaster give politicians
the formal means to sanction or reward the by appointing or dismissing board
members, altering the broadcaster’s funding, or scheduling extra committee
hearings on the broadcaster’s work.
The relationship between these two aspects of independence is by no
means straightforward. Some organisations maintain a high degree of de facto
independence despite laws that, in appearance, would permit politicians any
number of opportunities to interfere in the broadcaster’s work. Conversely,
some organisations have low degrees of de facto independence despite laws
that would seem to give the broadcaster a number of guarantees against politi-
cal interference. As a result, we need to check whether smallness affects either,
both, or neither of these aspects of independence.
What’s smallness got to do with it?

There is a surprisingly large literature on the effects of country size on the
characteristics of the polity. This tradition dates back to Plato and Aristotle,
both of whom discussed the size of the ideal polity. Both believed that de-
mocracy was only possible in cities with a limited population. Their positions
were, admittedly, quite extreme: Plato believed that the optimal population for
a democracy was around 5,040 full citizens – i.e. excluding women, children,
slaves and freedmen (Plato 1926, Book V). Similarly, Montesquieu believed that
only democracies with relatively small populations would be able to follow the
‘public good’. Large republics, for him, lacked the ‘fellow’ feeling present in
small republics. Consequently the average citizen’s perception of the common
good would be diluted as it passed through the population (de Montesquieu
1989, Book VIII). These arguments were typically based on organic metaphors
or abstract considerations about individuals’ capacity to sympathise with other
individuals whom they had never met. Yet more recently, Robert Dahl and
Edward Tufte examined the effect of country size on ‘citizen effectiveness’ and
found that indeed citizens are less effective in larger states (Dahl and Tufte 1973).
These pessimistic conclusions about large republics have been challenged. In
the Federalist Papers (Hamilton et al. 2003) James Madison argued that small
republics were at greater risk of being captured by a single faction that could
suddenly rise to prominence. In large republics, converse, even should a sin-
gle faction enjoy a sudden swelling of support it would have to anyway work
much harder and longer to capture the levers of power.
These arguments might seem abstruse, but they help us to understand the
complexity surrounding the issue of public broadcaster independence. Public
164
service broadcasters are embedded in the polities they must serve. Conse-
quently, characteristics of the polity – high trust, or high factionalism – should
be expected in those relationships that govern the broadcaster. If small coun-
tries are virtuous democracies populated by civic-minded individuals, and if
an independent media is a civic virtue displayed by such societies, then we
should expect that public broadcasters in smaller countries are more independ-
ent of politics, both in formal terms and in terms of their day-to-day activities.
Conversely, if small countries are subject to capture by motivated factions, then
we could expect public broadcasters to be captured by those factions as well,
and consequently less independent of politics. This link might not be straight-
forward, however. Politics structures a lot of the work of public broadcasters,
but it does not explain everything. There are of course other structural features
to consider: the state of the media market in each country, the cultural base
in the country, general economic conditions, and so on. Equally, we cannot
ignore the role of agency – many public broadcasters owe their current rude
health to charismatic chief executives who have moulded the broadcaster in
their image, or at least moulded the broadcaster so as to follow their precepts.
I will return to such factors towards the end.
Smallness and independence

To measure the degree of formal independence given to the broadcaster, I
have elsewhere developed an index of formal independence (Hanretty 2010).
This index has several items dealing with the method by which board mem-
bers and the chief executive are appointed, their tenure in office, the ease
with which they can be removed, and whether they can be re-appointed.
There are also items concerning the method of funding, and how often the
broadcaster is called upon to account for its activities to the legislature and
executive respectively. These items have been chosen because they are all
features found in the legislative acts establishing public broadcasters, and
because they are all means through which politicians can influence or pres-
sure the broadcaster. Each of the different responses to these items is scored
evenly on a scale from zero to one, with higher scores indicating greater
(formal) independence.
These scores can be reviewed in Table 1. The data was gathered for 36
different broadcasters, the majority of which are in Europe. The scores for the
relevant items are then averaged together to give an overall measure of how
independent the broadcaster is, purely based on the features of its legislation.
Broadcasters with high degrees of formal independence include the German,
Danish, and Portuguese broadcasters; broadcasters with low degrees of formal
independence include the Canadian, New Zealand, and Israeli broadcasters.
165
Chris Hanretty
When these scores are plotted against country population we find almost no
relationship between the smallness of a country and the formal independence
granted to its public broadcaster. This is true whether one looks at the popula-
tion of the country as is or taking the log of the population which helps remove
the distorting effect of countries with much larger populations (see Figure 1).
Figure 1.
1.0
CHE
NOR
FIN AUS DEU
IRLDNK
BEL AUT
CHL GBR
JPN
SWE CAN
EST ITA
0.8 BELNZL ISR
LVA POL USA
FRA
SVN
De facto independence
CZE ROM
0.6 ZAF
BGR PRT ESP
LTU
ITA
0.4 SVK
HUN
BGR
0.2
0.0
50000
100000
150000
200000
250000
300000
Population (thousands)
Countries with a bigger population grant their public broadcasters slightly less
formal independence than countries with smaller populations, which would
tally with our view of small countries being more virtuous and more content
to devolve true authority. However the relationship is substantively negligible,
and in any case is not statistically significant. Put differently, if we were to plot
the population of each country against the degree of formal independence it
gives its broadcaster, and then draw a line of best fit between all the points,
we would be faced with a flat line. It’s difficult to make a strong case that the
governance of public broadcasters differs between small and big countries –
166
at least as far as this crucial aspect of formal independence vis-à-vis politics

is concerned.
Although there is no evidence to suggest that formal independence is af-
fected by country size, might country size affect the de facto independence of
broadcasters? This was actually one of the first systematic hypotheses examined
regarding the independence of public service broadcasters. Eva Etzioni-Halevy
in her book, National Broadcasting under Siege (Etzioni-Halevy 1987), had
two hypotheses. First, she argued that countries with partisan bureaucracies
(as opposed to professionalised, meritocratic bureaucracies) would have less
independent broadcasters because they could not draw on the experience of
a non-partisan (and hence independent) bureaucracy. Second, she argued that
broadcasters in smaller countries would be less independent, other things being
equal, than broadcasters in larger countries. Since Etzioni-Halevy ultimately
found no major differences in independence between these broadcasters, the
role of country size was left unexplored. But it is rather easy to reconstruct her
reasoning: Each society needs an elite to fill a certain number of posts within
a society; small societies have relatively few people to fill a relatively rigid
number of posts; these people are likely to encounter one another in numer-
ous contexts; and by encountering each other will likely form relationships
which go beyond what is set down in law or by practice. These relationships
can only hurt the broadcaster because politicians (that most élite of élites) will
call on their acquaintances within the broadcaster to favour their interests.
When one considers individual small countries this reasoning can seem
convincing. It is worth noting that almost every polity, big or small, has some
term for referring to that small circle of politically connected individuals who
populate the media and political elites. Britons talk about the ‘Westminster vil-
lage’, Americans talk about what goes on ‘inside the Beltway’ (which becomes
inside the Queensway for Canadians), and Estonians talk about what happens
on Toompea. So this hypothesis is provocative and needs testing.
To deal with these aspects of independence in a systematic way we must
invent measures for abstract concepts like de facto independence. I gathered
data on the chief executives of the same 36 broadcasters for which I had pre-
viously gathered information on formal independence. For each broadcaster
I calculated two things: first, the reciprocal of the average tenure of directors-
general or chief executives of the broadcaster in years (so that higher figures
indicated more frequent turnover), and second, the percentage of government
changes which were followed, within six months, by a change in the director-
general or chief executive of the broadcaster. I reasoned that where incoming
governments or legislatures frequently force out directors-general, the public
broadcaster is likely to be less independent from politics; and where changes
of director-general are frequent (for whatever reason) the broadcaster is less
likely to be able to defend themselves from political interference. By taking an
167
Chris Hanretty
average of these two figures one can arrive at a reasonable proxy for measur-
ing how much de facto independence each public broadcaster has. Broad-
casters with high de facto independence include the BBC, ZDF, and the Swiss
broadcaster SRG-SSR. Broadcasters with low de facto independence include
Italian broadcaster Rai, the Hungarian broadcaster MTV, and the Slovakian
broadcaster RTV-SLO.
Here too, however, there is little evidence that the size of a country affects
the degree of independence that the public broadcaster there has (see Figure 2).
Figure 2.
1.0
CHL
0.8 BEL
SWE
SVN DNK
CHL GBRDEU
PRT
POL
De jure independence
EST LVA AUT USA

NOR AUS
0.6 IRL BGRCZE ZAF
JPN
BEL
LTU HUN ESP ITA
FIN ROM
BEL CAN
NZL ITA
0.4 SVK ISR
FRA
ITA
BGR FRA
0.2
0.0
50000
100000
150000
200000
250000
300000
Population (thousands)
In contrast to our findings on formal independence, there is a very small

positive relationship between population and the degree of independence the
broadcaster has, but again this relationship is not statistically significant and in
substantive terms doesn’t really matter.
We have examined the simple bivariate relationship between the size of
countries and the degree of independence (de jure and de facto) their broadcast-
168
ers have, and found no real relationship at all. It might be the case that there
is a relationship out there complicated by confounding factors. In the original
research which produced these measures of de facto and de jure independence
I tried to model de facto independence and included two other explanatory
factors (or covariates) alongside the degree of de jure independence: the size
of the market for news, measured in terms of per capita circulation of news-
papers, and whether or not the country had formerly been under Communist
rule earlier. The size of the market for news is, in turn, a shorthand way of
referring to two other developments that gain speed as the market for news
increases: journalists’ professionalisation project and the development of press
agencies. Both are powerful factors in establishing norms about journalistic
content, how it is produced, and how it is not produced (i.e., without the
input of politicians).
All of these developments happen to have a marked geographic distribution:
countries in southern Europe tend to have smaller markets for news just as
they also have fewer major and long-established press agencies and journal-
ists’ associations. Although it is not the very fact of being in the north or south
that explains this pattern, these factors do cluster geographically to give us a
baseline expectation of how independent the public broadcaster will be. This
baseline may subsequently be improved upon or made worse, depending on
the degree of de jure independence possessed by the broadcaster.
This model explains about half of the variation in de facto independence.
When we add the size of a country to our model, however, we don’t explain
any more variation and the effect of population is not statistically significant.
So even with the best model of de facto independence available at this time,
the size of a country doesn’t offer any explanation about the degree of inde-
pendence for a public broadcaster.
Of course these are statistical findings and may not always be convincing.
It is open to us to say that whilst there is no overall effect of population on a
broadcaster’s independence, the history of broadcasting in a particular small
country shows us that there, at least, size did have an effect, even if it has no
effect elsewhere. Or we might suppose that size has quite opposite effects in
very large countries and very small countries, which cancel each other out.
Finally, it might be that whilst the size of a country has no direct effect, it does
affect other factors that in turn affect independence. I examine this possibility
in the last section of this chapter.
Smallness and other aspects of governance

If the smallness of a polity – understood as the population of that country – is
unrelated to both the de jure and de facto independence of the public broad-
169
Chris Hanretty
caster in that country, perhaps there are links between the size of a country and
particular aspects of the governance of the public broadcaster? One particularly
intriguing aspect of the governance of the public broadcaster is the method
by which the top ranks of managers are appointed, and in particular whether
organs like the board of the public broadcaster are appointed by the executive
or the legislature branches of democratic governments. In my index of de jure
independence I assumed that appointment by both the legislature and the execu-
tive should be scored more highly (i.e., more ’independently’) than appoint by
the legislature alone; and further assumed that appointment by the legislature
alone should be scored more highly than appointment by the executive only.
This ordering comes directly from the literature on central bank independ-
ence and is questionable. There are good reasons to suppose that appointment
methods which involve both the executive and the legislature will result in
more independence for the broadcaster based on the assumption that where
multiple actors must agree to appoint an individual, that individual will, in all
likelihood, be less beholden to any particular actor. There are, however, few
good reasons for supposing that appointment by the legislature would result
in more independence than appointment by the executive branch. Each ap-
pointment method involves a different source of interference, but in many
European countries the same sets of political parties would be involved. One
may even make an argument that appointment by the legislature, being more
public, makes it more difficult for non-political individuals to be appointed
since they are unlikely to excite party or group politicians enough to lobby on
their behalf. Consequently groups of politically well-connected appointees may
be nominated as part of a package deal (see Hanretty 2009: 71-95).
Even if appointment methods are unrelated to independence, they might
still be important. Consider two PSB companies with the same degree of (de
facto) independence from politics. One of these has a board appointed by
the government; the other has a board appointed by the legislature. In the
first case we presume that threats to the broadcaster’s independence are more
likely to come from the government, whilst threats to the second broadcaster’s
independence will come from parliamentary committees and/or influential
backbenchers. Thus, even if the organ by which board members are appointed
has no overall effect on independence, it might nevertheless be indicative of
the source of political pressure on the broadcaster. Public broadcasters whose
boards are appointed by parliament may choose to spend more time assuaging
the concerns of influential legislators rather than ministers or ministerial aides.
We can use data gathered by Steven Fish and Matthew Kroenig to look at
parliamentary power and parliamentary involvement in appointment. Fish and
Kroenig (2009) collected data on the concrete powers enjoyed by legislatures
around the world, including the power to appoint directors of public media
companies. They also calculated the overall power of each legislature. Once
170
again, the empirical evidence reveals no real link between the population
of a country and the governance structure of its public broadcaster. Smaller
countries are not more likely to involve parliament in appointing the boards of
their public broadcasters. This is true irrespective of whether we focus on all
of the 158 countries covered by Fish and Kroenig, or only focus on the same
36 countries used in my analyses reported above.
At the same time, however, there is a modicum of evidence to suggest that,
considering just the 36 countries used in my analysis, parliament tends to be
more important the smaller the population of a country. Consequently, public
broadcasters in smaller countries who wish to remain independent might have
to spend more time dealing with potential threats to their independence from
influential committee members instead of potential threats from junior ministers.
Smallness and learning

It seems, therefore, that smallness has very little to do with the governance of
public broadcasters. These findings can be qualified. As suggested earlier it does
matter how one measures smallness and simply because it doesn’t matter on
aggregate doesn’t mean it has no effect in a particular case. Or there may be
no effect of smallness on PSB governance because other factors have a more
determinate influence. In terms of legislation, political scientists have shown
that governments devolve more power to organisations like public broadcasters
when governments of opposite political persuasions turn over rapidly. Thus if a
left-leaning government is replaced by a right-leaning one, only to be replaced
again within the space of a decade, then organisations like PSBs would likely
be granted more independence in legislation. Yet despite Madison’s warnings
about the ease by which one dominant faction can acquire and maintain power
in a small republic, rates of government turnover do not seem to vary between
big and small countries; smallness doesn’t capture this effect.
Equally, as far as the de facto independence of broadcasters is concerned,
I have suggested that the size of the market for news plays a much larger role
(alongside, obviously the degree of de jure independence). Here, however,
the assumption that the state is the most important unit breaks down. States
are not coextensive with markets, nor are populations equivalent to consumer
bases. In linguistically divided societies – and, as the Estonian experience dem-
onstrates, even small states are not immune to linguistic division – one state
may have multiple media markets divided by language. Or, in societies with
homolingual neighbours, the market may span multiple states. Although this
may not be true, indeed it might never be true, for the market in content it is
much more likely to be true for media market inputs: capital, labour, technol-
ogy, and know-how.
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Chris Hanretty
By returning to a principle noted by so many of the contributors to this

volume – that smallness has multiple dimensions – we can consider one way
in which the governance of PSB companies in small states might be affected
by size, even if this leaves no aggregate pattern. That way is via imitation –
either unconscious in which case we would more naturally talk of mimicry, or
conscious in which case we might either still talk of imitation or, depending
on the audience, follow best practice. There is a body of literature suggest-
ing that small states are more open to policy innovation, and also to policy
learning. This might be an artefact: larger federal states already have a myriad
of policies at the federal level that they can learn from. Such ‘laboratories for
democracy’ are not often available to smaller states (though Switzerland is a
notable exception), and so the putative openness of small states to policy in-
novations might merely result from the absence of options within the country.
Nevertheless, we might find that certain aspects of PSB governance more often
migrate to smaller countries.
I would like to give two examples of how public broadcasters in smaller
countries might learn practices which bolster their independence, or which
change their governance in broader ways. The first example comes from a
small country that learned from a much larger homolingual neighbour when
it was setting up its own public broadcaster: the Republic of Ireland where
the source of innovation was the British Broadcasting Corporation. RTÉ and
its predecessor organisations, 2RN and Radio Eireann, relied on the BBC for
labour: the first BBC Director-General, John Reith, sat on the station’s first
interview board. One of RTÉ’s most important directors of television, Maurice
Gorham, was a former BBC employee. The BBC supplied 2RN with news
broadcasts in its early years. And many of the key documents in RTÉ’s his-
tory, and in its relationship with the state, used language that is redolent of
language used in the BBC Royal Charter and the BBC’s Editorial Guidelines.
Ultimately, RTÉ was able to repay the favour: when RTÉ’s promise to self-
regulate its news coverage of the IRA and Sinn Féin led to the government
removing a statutory ban, the case for similar restrictions on coverage in the
UK was greatly weakened.
Of course not every small broadcaster is situated so close geographically,
culturally, and linguistically to a broadcaster as internationally recognised as the
BBC. Equally, this situation of a broadcaster in a small country learning from
its larger neighbour may be misleading because it suggests that all learning is
unidirectional (although we have demonstrated interactive influences in the
example above). A second example of policy learning is among Scandinavian
broadcasters, all of whom operate in small countries and who, with the excep-
tion of the Finns, are not quite homolingual, although often mutually intelligible.
The network of contacts between these broadcasters does occasionally lead to
transplants of ideas from one context to another.
172
I should stress that policy learning is a neutral phenomenon. There is no

guarantee that learnt policies or innovations in governance will not be harmful.
We find an example of this between two large states: the Italian broadcaster Rai
in the late 90s decided to borrow the practice of assigning screen time between
the government, the legislative majority, and the legislative minority, in roughly
equal proportion, from the French Conseil Superieur de l’Audiovisuel. This rule
of three-thirds, as it was known, was not terribly successful, however: it both
bound news editors and gave them a crutch, allowing them to disattend from
individual programme standards. It was abandoned a couple of years after its
introduction. The worst-case scenario for policy learning is where a broad-
caster operating in a small country has no homolingual neighbours of any size
whose experience can be drawn upon. This broadcaster would therefore be
small twice over: in a small sized country and in a small language community.
Beneficial policy learning would thus have to come from membership in, and
links with, peak organizations like the European Broadcasting Union [EBU].
Governance of commercial broadcasters

The governance of commercial broadcasters is different in that it cannot be
so easily reduced to independence from the state or its politicians. Because
we’re dealing with a private sector, by definition politicians are not so inti-
mately involved in their activities. True, these broadcasters must obey rules on
broadcasting but that’s not a very pointed form of interaction. The governance
of private broadcasters may still be related to the broadcaster’s independence
from politics, however. Of the two broad issues to consider only one, that is
the ownership structure of the company, is relevant here. The other issue,
board structure, is in very many cases determined (or strongly suggested) by
company law in each country, and the available literature suggests that the
choice of a unitary board or a dual board structure involving a separation
between management and supervisory functions likely has no conclusive ef-
fect on either financial performance (Dalton et al. 1998) or legality (Kesner
et al. 1986). Thus it is unlikely to have a conclusive effect on a broadcaster’s
relationship with politics.
Ownership structure, however, has more often been linked to political influ-
ence over the media – either through the actions of major shareholders who are
keen to avoid negative political repercussions or through capture by politically
active shareholders. Media firms are known to have more concentrated owner-
ship structures than other firms (Demsetz and Lehn 1985), perhaps because
majority stakes in media outlets deliver not only material benefits in the form
of dividends and stock value, but also intangible benefits in terms of steering
the national debate. The popular image of corporate media owners is almost
173
Chris Hanretty
invariably negative: network executives, typically pressured by the ultimate

owners of the network, are depicted as pressuring courageous journalists to
quash stories which are uncomfortable for their corporate parents (George
Clooney’s rose-tinted portrayal of Edward Murrow, Goodnight and Good Luck,
fits this category). This influence is not always political – it may be ‘merely’
commercial, as when General Electric spiked a number of negative stories on
NBC concerning nuclear power, an industry in which General Electric was in-
vested. But we may say, moderately, that the negative impact of concentrated
ownership structure is stronger in the media market than in other markets.
For quite separate reasons companies in smaller countries typically have
access to smaller stock markets, higher capital costs, and thus a more concen-
trated ownership structure (Pedersen and Thomsen 1997). There is a danger
that media companies in small markets will be subject to a double hit: their
ownership structure will be more concentrated because they operate in the
media, and because they operate in a small country. This will not affect mul-
tinationals, or companies that trade in overseas stock markets. Nevertheless,
there is the potential for private broadcasters in smaller countries to be more
subject to capture by powerful corporate or political patrons.
Despite these theoretical risks, there doesn’t seem to be any obvious con-
nection between media companies in small countries and a concentrated
ownership structure. Bureau van Dijk’s Amadeus database includes informa-
tion on the ownership structure of thousands of public and private companies
across Europe, including summary information on what they describe as the
‘independence’ of each company from shareholders. Companies with single
shareholders with a majority stake in the company score the lowest; compa-
nies with no single shareholder owning more than 25% score highest. The
rationale is that companies with a single controlling shareholder will be much
more subject to pressure from that shareholder, in particular pressure to drive
coverage a particular way rather than either making coverage which maximises
audiences or which follows professional norms.
I therefore gathered data on the 512 public and private companies operating
in media markets across the EU27, in order to test whether media companies
in smaller countries are more likely to have dominant shareholders. Again I
found the relationship is almost flat: although companies in larger countries
are slightly more likely to have a diverse ownership structure, this finding
is not statistically significant. There may of course be developments more
difficult to discern somewhere beneath the surface. The Amadeus database
only contains ownership information on a limited number of companies; it
may be that many of the smaller companies (in smaller markets) have a more
concentrated ownership. Equally, information on current ownership structure
does not preclude that future politically-minded entrepreneurs might choose
to invest in media companies.
174
Conclusion
Smallness in the narrow sense used here as country size in terms of popula-
tion seems to have little to do with the governance of either public or private
broadcasters. Smaller countries are not more likely to give their public broad-
casters greater independence, in either de jure or de facto terms, and this is
true whether or not one controls for other relevant factors. There is slight
evidence to suggest that broadcasters in smaller countries are more likely to
be appointed by legislatures rather than the executive branch, which would
suggest that public broadcasting managers in these countries should try to
spend more time on managing their relationship with influential legislators than
junior ministers. There is no evidence to suggest that private media companies
in smaller markets have a more concentrated ownership structure of the kind
that might facilitate political influence.
There are, however, reasons to think that small countries might be better
placed to learn lessons from their neighbours than larger countries. In these
kinds of relationships other aspects of smallness – the smallness of a language
community or a media market – do tend to play a role. Consequently, broadcast-
ers in small but well-connected countries may enjoy a comparative advantage
in governance not held by broadcasters in larger countries.
175
Broadcasting for Minorities
in Big and Small Countries
In this chapter we argue that just as public broadcasting is a public good

characterised as non-excludable and non-rival in consumption, language is
similarly a public good. Moreover, just as the production of public service
broadcasting [PSB] for minor markets must withstand pressurising competition
in services coming from big markets, similarly the production of services for
small language groups is under pressure due to the influence of scale as a
primary size-related factor in domestic settings. In short, many of the issues
treated in other chapters focusing on the national-international dimension are
approximated within national contexts with regard to broadcasting for majority
and minority language groups. Using a case study approach, our focus is on
situations where broadcasting is offered to a particular audience in a different
language than what is spoken as the predominant national language.
Our studies show that broadcasting for minorities in big and small coun-
tries is less a question of size of the country than of political will. Size of the
market matters, but broadcasting for minorities is dependent on public service
also in cases where the minority is relatively big. Minorities display a prefer-
ence for locally produced broadcasting in their language and, where possible,
broadcasting from neighbouring countries in the minority language is highly
significant. Our studies also show that the development of new broadcasting
technology has in some cases created obstacles for transborder broadcasting,
which needs to be addressed at both state and EU level.
As characteristic for anything that qualifies as a public good, the proportionate
size of a population does not as such reduce the need for each individual to
be fully served. In media this is especially important with regard to necessary
services in one’s mother tongue. The international instruments pertaining to this
field have generally accepted the principle that audience size is a valid argument
for provisioning different tiers or levels of service. In everyday practice there is
also variation in broadcasting policies that treat minority groups of similar size
quite differently in comparative contexts. It’s important to understand at the
177
outset that such differences are irrespective of the size of the hosting country.1
Both policy and practice condone different levels of service for minority lan-
guage groups; there are no standardised, mandatory rules about this.
Although this area of research is keenly important given concerns about the
dynamics of globalisation, the body of literature on minority language media
is still relatively thin (see Moring & Dunbar 2008). It is clear, however, that
the totality of media supply in most countries tends to undermine rather than
strengthen the position of language minorities. The dominance of media in
the majority language, and the growing trend to import channels as well as
content from international media markets where the predominant language is
English, account for increasing difficulty in maintaining a competitive supply
in minority languages. The situation has encouraged the notion that broad-
casting for small language communities has a ‘restitutionary’ function (Dunbar
& Moring 2008; see also Kymlicka 1995); here the purpose of broadcasting
is to compensate minority cultures for loss in the media domain and to sup-
port minority languages in the context of daily life where this is contested
by supranational and national competition. This chapter presents examples
that predominantly – but to various degrees – are based on public service
broadcasting.
Attuned to the focus of the book, we investigate whether the size of the
country determines how states provision broadcasting for minorities residing
in their territories. Does the size of a minority population determine the level
of service that is offered, or is this more a matter of political choice irrespec-
tive of size? How do bigger countries and smaller countries serve cross-border
minorities in situations where new media technologies have been introduced,
especially digital television? Has this changed the conditions under which
transborder flows emerge and are accessible to minorities in neighbouring
countries? We are interested in the consequences of introducing digital broad-
casting. Has it increased services for minority language populations, or has it
caused new problems through encryption of signals that stop service delivery
at the borders of a country?
In our discussion about policy obligations for handling broadcasting at the
intersection of market and country size, the service provisions for regional
audiences within countries form a special case that we also address. There
are some international instruments that regulate this field in Europe, although
only a few and not always validated by state governments. Maintained by the
Council of Europe, the United Nations, and the Organisation for Security and
Co-operation in Europe, these instruments are particularly aimed at encouraging
appropriate minority language broadcasting services in national and regional
settings. Although some countries have chosen to adhere to these instruments,
1. We follow the terminology described in the introductory chapter, referring to country as the general term
whereas using the terms nation or state in references to policies and related agreements.
178
Broadcasting for Minorities in Big and Small Countries
many have not; and those that have vary quite a lot regarding the level of
services they offer minority audiences. Thus, one finds a great variety of solu-
tions for the 50 million or so speakers of national minority languages within
EU member-states. In addition, there is a multitude of migrant minorities that
are not covered by international agreements in this field.
The cases considered in this chapter were chosen with the typology char-
acterising between bigger and smaller countries formulated by Christian Berg
in chapter three. We look at eight cases in seven countries, four of which are
comparatively big (Italy, Spain UK and Germany) and three of which are rela-
tively small (Finland2 Denmark, and the Netherlands). Across these countries
broadcasting in minority languages is provided in different ways, as we will
see. In three cases (German in Italy, Swedish in Ostrobothnian Finland and
Danish in Germany) the minority language populations can access spill-over
programming in their respective language from channels that cross the borders
between kin-states (or kinship-states), meaning states sharing a border where
the language of transition is a minority language on one side but the dominant
language on the other side. In three cases there are no bordering kin-states
(Catalan in Spain; Welsh in UK and Frisian in the Netherlands). In two cases,
there are limited kin-state services available, though not free to air (Swedish
in Southern Finland3 and German in Denmark).
All the minorities treated in this chapter are, through various arrangements,
covered by radio and television in their respective mother languages. Thus,
it needs to be clear that the situations assessed are not representative of the
general situation in Europe where most of the approximately 50 traditionally
spoken minority languages do not have access to a television channel in their
mother language, and where a multitude of migrant languages must depend
on global satellite channels and, perhaps, some programmes on local radio.
Of course some have no broadcasting services at all. This chapter takes a
benchmarking approach. We are looking at a relatively privileged group of
minorities to study how the availability of public broadcasting service varies
across countries as a function of investment in services particularly targeted to
language minorities, and where pertinent also how the existence of services
from kin-states affect the situation.
2. It should be noted that Swedish in Finland is not a minority language but one of two national languages, by
constitutional law. Swedish speakers do, however, constitute a minority of the population as they constitute
less than 6 percent of the population.
3. Ostrobothnia on the Finnish west coast and Uusimaa in Southern Finland can be distinguished in this re-
gard. Ostrobothnia by tradition has had access to spill-over broadcasting from Sweden, later maintained and
reinforced by special arrangements, whereas Southern Finland has not had such access but has received
a compilation of programmes domestically produced by the public service broadcaster SVT from Sweden.
Today, at a cost, broadcasting from Sweden is available also in Southern Finland on some cable networks,
and the compilation of domestic public service programmes is available on air for those who purchase a
decoding card. This arrangement has, however, not encouraged wide viewing of television from Sweden in
Southern Finland.
179
Supranational obligations
regarding media production for their minorities
The current regulatory regime for minority issues in the European Union dates
back to problems arising from the First World War. In the post-war division
of Europe into a variety of new nation states an obvious problem was that
not all distinct groups were large, compact or strong enough to be granted
an independent state of their own. As the Yiddish linguist Max Weinreich is
reputedly said, “a language is a dialect with an army and navy”. Also, in many
cases state borders divided areas where the population is some mixture of two
nations, creating bilingual areas on either or both sides of the new border.
These situations produced the phenomenon here referred to as minorities with
kinship-states.
Immediately after the war there were efforts to form a regulatory regime
for minority populations, but it only came to fruition in the last decades of
the 20th century (Kymlicka 1995), and even then only with international rules
pertaining to what is often referred to as autochthonous (or national) minori-
ties – meaning minorities with a traditional presence in the region where they
live. In the broader picture of the formation of integrated Europe, this limita-
tion is of course problematic as Europe has been moulded and remoulded
throughout its conflicted history by population movements for various reasons.
This movement continues within EU and its member states today, in fact (see
Cormack & Hourigan 2007; Salovaara-Moring & Moring 2010).
Today there are international instruments to help ensure the beneficial treat-
ment of minorities in the European Union, including also access to broadcasting
services in minority languages. Moreover, a body of ‘soft law’ has gradually
formed that has encouraged a great many European states to ratify pertinent
international conventions. Minorities in states that have not ratified such
conventions, and also in cases where more recent mobility have also created
new minorities, these instruments are taken as international benchmarks. The
contents of the main instruments in this field are briefly summarised in Box
1 below.
The European Union as such has not agreed on formal regulations with
regard to broadcasting for minority audiences within member states. Regula-
tions pertaining to national minorities and minority languages are mainly in
the principles of non-discrimination and respect for cultural, religious and
linguistic diversity, both established in the Charter of Fundamental Rights of
the European Union, Articles 21 and 22. The EU’s non-involvement in this field
is based on the principle of subsidiarity, which is applied to minority policies
in general. The sentiments expressed in the Audiovisual Media Services Di-
rective are positively disposed to trans-frontier exchange (formerly known as
Television without Frontiers). Whilst the directive introduced basic principles
180
Box 1. International policy instruments for broadcasting
International instruments for protecting minority language broadcasting

At the level of soft law, three bodies in particular carry instruments that include obligations for
minorities residing in European states: the United Nations (UN), the Council of Europe (CoE) and
Organization for Security and Co-operation in Europe (OSCE). A particular feature of these soft-
law instruments is that they all pertain to minorities with a traditional background in the state
where they live; thus there are no specific quotas or content requirements that would regulate
media for migrant minorities. Also the European Broadcasting Union has principles that foster
broadcasting to minority audiences.
United Nations
UN approved a Declaration on the Rights of Indigenous Peoples 2007. This declaration grants
rights to culture and media for indigenous people. However, it has the status of a recommenda-
tion and is not monitored.
Council of Europe
The Council of Europe has two instruments that specifically require services to minority groups
or in regional or minority languages.
The Framework Convention for the Protection of National Minorities is in force in more than 40
states. Its article 9 includes provisions for the right of national minorities to their own media.
The European Charter for Regional or Minority Languages is in force in 25 states. Its article 11 in-
cludes a menu of provisions regarding radio and television broadcasting. In states that carry out
a public service mission, the undertakings range from ensuring the creation of at least one radio
station and one television channel in the regional or minority language to making adequate
provision so that all broadcasters offer programmes in the regional or minority languages. Simi-
lar undertakings are proposed also regarding commercial broadcasting. The Charter aims at
guaranteeing freedom of direct reception of radio and television broadcasts from neighboring
countries in minority languages, and requires states not to oppose the retransmission of such ra-
dio and television broadcasts. Furthermore, the Charter encourages production and distribution
of audio and audiovisual works in the regional or minority languages.
Organization for Security and Co-operation in Europe

The High Commissioner for the Protection of National Minorities of the Organization for Security
and Co-operation in Europe (OSCE) has issued two recommendations that are based on exis-
ting international law and soft-law. Both these instruments have a character of policy guidelines,
based on other international instruments, such as the Oslo Recommendations Regarding the
Linguistic Rights of National Minorities from 1998 and the Guidelines on the use of Minority Langu-
ages in the Broadcast Media from 2003.
European Broadcasting Union

According to the European Broadcasting Union (EBU) membership conditions members of the
EBU are under an obligation to provide varied and balanced programming for all sections of
the population, including programmes catering for special/minority interests of various sections
of the public, irrespective of the ratio of programme cost to audience. According to the EBU
Statutes, programmes catering for special/minority interests must reflect the linguistic, cultural
and religious diversity of the national audience, constitute an integral feature of the schedule,
and must be broadcast at times of day when the target audience can reasonably be expected
to be watching or listening.
regarding the free movement of television programmes in Europe’s internal

market, and stipulated quote requirements for broadcasting ‘whenever pos-
sible and practical’, in fact transmission time does not typically afford 50% in
European works.
But there are, in principle at least, some binding EU regulations. In con-
trast, the international instruments that cover policies in regard to minorities
181
in different EU member states are, given the lack of effective sanctions, rela-
tively much weaker yet. Whilst policy documents that relate to broadcasting
for minorities do provide an internationally established normative framework
within which states may chose to operate, states may also chose not to adhere
to any of these principles in the field of broadcasting, which characterises
the situation in France and Greece, and many of the former Soviet states (see
Grin et al. 2003).
A observation of generalisable importance is that media markets in Europe
do not provide broadcasting services to minorities in the absence of public
service broadcasting, except in the rare case where the minority language au-
dience is sufficiently large to comprise an attractive market in its own right.4
The only case where this potential could exist that we find inside the EU is
Catalonia with more than four million speakers of Catalan. In certain cases,
as TV Breizh in France, the argument of serving the minority has been used
to solicit approval for a license to broadcast, but in practice the transmissions
have been predominantly for other purposes (Guyot 2007: 39).
Essential issues related to minority needs and obligations

As noted at the outset, language and broadcasting are public goods. In practice,
however, providing full broadcasting service for minority language audiences is
not always doable. In reality we find a variety of approaches with sometimes
more and often less services. One approach to address the issues of supply
and use in minority language media features the concepts of ‘institutional and
functional completeness’, both of which are measured as a level. Institutional
completeness means the extent to which a country provides media services
for a minority (language) group. Functional completeness means the extent to
which the group leans on these services in its media use.
Ideally, a complete broadcasting supply would allow the minority to fulfil all
the pertinent requirements of its culture for the minority to be self-sustaining in
this regard. In the literature on services to minorities in general and media ser-
vices in particular (Grin et al. 2003, Moring & Husband 2007, Moring & Dunbar
2008) it is customary to look at policies from three different aspects: 1) what is
the supply, 2) which is the demand, and 3) how do use patterns emerge in the
light of supply and demand? In parallel with research on the vitality of different
minorities (see Moring & Husband 2009), these aspects are seen as institutional
support (supply), preferences (demand) and functional completeness (use).
As a background to understanding the importance of media to language, we
need to take the discussion on supply and demand aspects of media provision
in the context of regional or minority language usage a bit further.
4. C.f., the Mercator Media web site, http://www.mercator-central.org/ (22.4.2010).
182
The supply of broadcasting

Institutional backing for language is a necessary but insufficient prerequisite
for media to serve a restitutionary function for regional or minority languages
(Kymlicka 1995). It is important to note that different types of media, includ-
ing newspapers, radio, television, the Internet and mobile services, each serve
somewhat different communication purposes. People don’t use radio in precisely
the same ways or for all the same gratifications they find in television or in
newspapers. The various media are also used most often in different dayparts
(Moring 2007). Radio, for example, is most used in the mornings and mid-
afternoons (‘drivetime’, as the Americans define this, although in the Nordic
countries most radio listening still takes place in the homes). Over time the use
of radio has in many instances been identified as an important vehicle for the
development (and then the maintenance) of a standardised spoken language
(Grin et al. 2003) – in the USA, for example, this has been accounted for the
spread of a ‘Midwestern’ accent. Among all minority media, radio stations have
so far had a leading position with respect to availability in minority languages
because of the medium’s relative cost-effectiveness.5
Television programming is by far the most expensive medium to maintain,
especially on a broad scale and daily basis. It is, however, of the utmost im-
portance for a regional or minority language to have a reasonable presence on
television because it is the most frequently used in most countries. Television
has a vital role in cultivating the community’s image, not only as this reflect
inwards on the community’s view of itself but also reaching out to the broader
majority community. Subtitling techniques have in many instances been ef-
fectively used to maximise the impact of television broadcasts in regional or
minority languages within society at large. Television is particularly effective
as a vehicle for the establishment of cultural relations with other groups in
a country with multiple languages. Television is also a particularly important
carrier of media content from neighbouring countries where the regional or
minority language is predominant (i.e. the kin-state).
Where the supply of programmes for the minority is sparse, and especially
when scheduled in slots within a channel that operates in the majority language
or as a collect platform for many minorities, the placement of items presented
in the language tends to become a crucial problem. Often broadcasts in a
minority language are scheduled for fringe hours that are less attractive for
broad viewing or listening. Very early or very late slots reduce the possibili-
ties for a minority audience to attend these programmes. On the other hand,
scheduling such programmes at highly competitive peak hours may also be a
problem if the bilingual part of the audience finds the competing programmes
more attractive.
5. C.f., the Mercator Media web site, http://www.mercator-central.org/.
183
The role of new technologies in helping resolve this tangle is still ambiguous.
It is evident that the Internet (both stationary and mobile platforms) will have a
huge impact eventually, but of what kind/s and in which condition/s is unclear
for now. It is safe to say, however, that these platforms are obviously different
from broadcasting media and it is not very likely that they will substitute for
broadcasting; quite the opposite, we see cross-media effects emerging where
for example patterns in the use of television apparently transfer to patterns of
use for the Internet.6
Aspects of demand
In assessing demand for broadcasting services within minority audiences, it is
critical to understand the importance of a rich and varied supply. The demand
for broadcasting among any audience group includes not only daily news in
the mother language and about its self-interested community, but also other
programme genres offered in all the various media, such as youth programmes
and different types of popular content like drama and comedy (Moring & Dun-
bar 2008). This wider range of needed services is rarely met for minority audi-
ences, however, particularly where domestic production is not complemented
by access to kin-state supply. Thus, part of the demand for broadcasting tends
to be fulfilled through the use of contents in the majority language.
From a demands perspective, a language would always require the support
of full and comprehensive media services on all platforms and genres. From
a practical perspective, international standards allow for adjustment to lower
levels of supply to accommodate various constraints mainly related to required
investment to facilitate fulfilment (ibid). That said, it is certainly arguable that
states should do all they are able to do to make the most effective use of all
the means available to support minorities and their languages, including ar-
rangements involving offerings available in neighbouring countries. As argued
above, such arrangements would be of an important, though complementary,
character.
It is natural that minority audiences, even when being well served in their
mother languages, will turn to other outlets for some things in varying propor-
tions – either in the majority language or other languages offered in today’s
increasingly global media environment. But wherever reasonable demands are
met in regard to broadcast quantity, quality and generic diversity, audiences
would be expected to show a marked preference for the use of media in their
own language. If this condition (the strict preference condition, as discussed
by Grin et al. 2003) is not met, or only weakly met, it will be of little use to
make further investments in services to a minority. However, only in very few
6. This observation has been presented by Laszlo Vincze in his ongoing research, as presented with permission
in Moring and Godenhjelm (2010) and also on Moring et al. (forthcoming).
184
cases is the ceteris paribus condition of equal supply to minorities actually

met. An asymmetric supply inherently disadvantages the minority and leads
to more fragmented use patterns among minority audiences because they so
often can’t find a complete but only a complementary broadcasting supply in
their own language.
Aspects of use
Where media services include a complete array of media platforms (e.g.
newspapers, radio, television, the web) and genres (programmes for older
and younger people, with news and information as well as entertainment
programmes) the prerequisite for functional completeness is met. But even in
situations where broadcasting supply in a minority language is institutionally
complete, or next to complete (such as we find in Catalonia for Catalan, in
South Tyrol for German, in Wales for Welsh, or in Finland for Swedish) it would
be normal to find bilingual speakers using a large proportion of media in the
majority language. This is not a problem in itself, and on the contrary can be
understood as beneficial in the potential for fostering good relations between
groups within and between societies. In those situations where a language
coexists in a positive relation with other languages it can be considered quite
normal that bilingual or multilingual speakers use media across a spectrum of
languages. It does, however, become a problem where the use of media in
the majority language is caused by a lack of quality minority language media
due, for example, to a lack of resources.
Linguists use terms related to domain loss and domain expansion, which refer
to the domains in people’s lives where a language is normally used (Laurén et
al. 2008). In this context the lack of attractive programmes directed for a young
audience in the minority language, for example, would foster a domain loss
in use of the language through media among them. On the other hand, it has
been shown (Grin et al. 2003) that an investment in, for example, youth format
radio in a minority language can bring back a lost audience generation, thus
compensating for the influx of global formats that tend to promote uniform
media behaviour among young people. In such cases, there is a potential for a
domain expansion, or domain re-conquest, reversing earlier patterns of domain
loss for the language.
Aspects of space
The provision of media services to minority audiences is dependent on aspects
of their territorial organisation (Patten 2003: 299-305). All types of market-
based media services may emerge in minority languages within federal states
or territorial divisions where the minority locally forms a viable market that
185
is sufficiently dense. However, in situations where the minority is dispersed

and also locally marginalised, even numerous minority populations may find
it impossible to maintain market-based media services. Also different types of
media require different conditions in this regard. Newspapers are particularly
sensitive to distance, whereas radio and television broadcasting more easily
can be developed to cover large territories. But advertising markets tend to
seek population centres and find it most cost effective to buy space in the
major outlets, usually leaving minority audiences aside even where relatively
big markets could be found (Moring & Salmi 1998).
In international parlance, different and complementary aspects of media-
related functions are frequent. Such include the “right to share”, the “right to
be heard”, and the “right to be understood” (Downing & Husband 2005). In
some instances, media offerings may be predominantly translations of whatever
is provided for the majority language population, with little specific relevance
for the speakers of the minority language community. In such cases the media
supply is ‘for’ or perhaps ‘about’ the community using the language, but not
‘from’ or ‘of’ that community. The particular interests of minority groups would
require their point of view be represented and taken into account in the content
of such broadcasts, in which case services are based in the community and
speak from and of the community itself. This is not really possible for a mainly
international service and thus can normally only be domestically produced.
This does not exclude the added value of transborder supply from kin-states
where the language is used by a majority of the population and the supply
of broadcasting services, consequently, are more complete. In the light of the
needs for any community to formulate itself in order to be able to deliberate
within a society about issues that are relevant to all and need to be decided in
some collective democratic fashion, this does not substitute broadcasting that
serves the local needs.
When looking at Europe from the point of view of supply factors, demand
factors, use factors and factors relating to the organisation of space, we find
several different types of solutions with ambitions to address the problems of
how to best offer broadcasting in minority languages. As we shall see in the fol-
lowing section, the differences are evidently related to cultural contextualisation
(kin-state or not kin-state), size, composition and density of the minority itself;
whereas differences are less evidently related to the size of the hosting country.
Similarities and differences in smaller versus bigger countries

The eight cases discussed in this part of the chapter are all cases where minor-
ity languages are served – more or less generously – by radio and television
broadcasting. As noted, to clarify problems associated with offering broadcast
186
services to minorities in different contexts we selected eight cases. Four pre-

sent broadcasting within a bigger country, and four within a smaller country,
and as also noted the cases include variation in the availability of kin-state
broadcasting (Table 1).
Table 1. A summary of the cases
Variables
Minority´s regional Availability of kin-

Minority language Minority size weight state broadcasting Language regime
German in South 350 000/60 milj. 350 000/500 000 Free Official language in
Tyrol 0.6 % 70 % the province
in Italy in South Tyrol
Danish in Germany 50 000/82 milj. 50 000/3 milj. Limited availability No official status
0.06 % 1.6 % (Bilateral
in Germany in Schleswig-Holstein agreement)
Catalan in Spain 4.3 milj./46 milj. 2.4 milj./7.3 milj. Not available Co-official language
9.3 % 33 %
in Spain in Catalonia
Welsh in the UK 588 000/61 milj. 588 000/2.9 milj. Not available Official language in
1% 20 % Wales
in the UK in Wales
Southern Finland On demand National language

Swedish in Finland 290 000/5.3 milj. 7.3%
5.4 % Ostrobotnia Free
3
National language
in Finland1 50.9 %2
German in Denmark 12-15 000/5.5 milj. 12-15 000/260 000 Free No official status
0.01-0.02 % 5-6 % (Bilateral agre-
in Denmark in Sønderjylland ement)
Frisian in the Nether- 474 000/16.5 milj. 474 000/643 000 milj. Not available Second official
lands 2.9% 74 % language
in the Netherlands in Friesland
1.
Source: Befolkningsregistercentralen, 2010.
2.
Source: Kommunförbundet, 2010.
3.
Functionally it is equivalent to free viewing although a small fee is required to cover costs for technical transmission.
To clarify the geographic locations for our eight cases, we drafted a map
(Figure 1). The cases we have selected for analysis are found in different
parts of Europe, representing different contexts in terms of media landscape
and political cultures. However, most of these cases (all within the EU) fea-
ture a minority served by domestically produced daily television services. In
addition to those cases that we have studied here, television services in the
form of a separate channel can be found, for example, also in the Basque
country in Spain, in Ireland for Irish, and in Scotland for Gaelic. As situations
vary, strict comparisons are not meaningful. However, the cases provide a
basis for benchmarking and furnish examples of practices to inform policies
in this field.
187
Figure 1.
The map portrays the location – in white – of the eight regions with minority language broadcasting
that are discussed in this chapter: In big countries South Tyrol in Italy, Wales in the UK and Catalonia
in Spain, in small countries Ostrothnia and Uusimaa in Finland, Friesland in the Netherlands and Aa-
benraa in Southern Denmark
Public service broadcasting for minorities in big countries

German speakers in South Tyrol
One of the most generously equipped media landscapes for a minority is in
the South Tyrol region in northern Italy. The German speaking population
consists of approximately 350.000 German language speakers, or 0.6 percent
of the total Italian population with a regional weight of around 70 percent in
the Trentino-Alto Adige province. German is an official language in the region,
and in South Tyrol is actually growing. It is also obviously the majority language
in several kin-states. The media landscape for the German-speaking minority
in South Tyrol can be regarded as complete both from an institutional and a
188
functional perspective. This minority has access to several TV and radio chan-
nels, as well as printed and internet-based media.
The German-speaking population has a particular status in this autonomous
province. The language enjoys strong policy backing from regional authorities.
The most significant TV broadcasting comes from a local PSB television station,
RAI Sender Bozen, and from cross-border TV broadcasting by Rundfunkt-An-
stalt-Südtyrol RAS. The RAI channel broadcasts two to three hours of German
language programmes per day, and its most popular day show (Tagesschau)
features coverage of local news and events. The programme attracts a signifi-
cant portion of all viewers every day, even though they have access to a wide
variety of other channels.
The publicly owned company, RAS, enables border-crossing media from
the neighbouring German speaking countries. The technical solutions and a
quite particular arrangement regarding copyright issues enable RAS to provide
access to a multitude of different TV and radio channels to the province free
of charge. The arrangements are based on a special agreement to include
broadcasts for South Tyrol in copyright agreements within the neighbouring
countries. This arrangement excludes retransmission of major sports events,
however, the copyright issues of which have not been resolved.
Figure 2. Viewers by channel among speakers of different languages in South Tyrol

(daily reach %)
Rai Senden Bozen (German)

German language channels
ORF1
ORF2
ZDF
Other German language channels
ARD
SF1
Italian language channels
RAI1
RAI2
RAI3
Other Italian language channels
Rai Sender Bozen (Italian)
0 10 20 30 40 50 60 70
German language Italian language
Source: ASTAT, 2005.
189
The German language in South Tyrol is thus served by a well function-

ing media landscape both in terms of transborder media supply and locally
produced media supply. Although the region enjoys an exceptional supply of
transborder media, the most popular content is nonetheless locally produced.
This emphasises the need not only for media in one’s own language but also
about one’s own language community and culture.
However, the situation in South Tyrol has led to a clear division between
speakers of German and speakers of Italian in the region, where the two lan-
guage groups remain separated despite of geographic proximity. This division is
evident in media consumption; the minority demand among German speakers is
primarily directed towards German language media, whilst the Italian-speaking
population’s demand is primarily directed towards Italian language media.
The exception, as noted earlier, is the local RAI station (Figure 2). Media use
is therefore also to a great extent language exclusive. The extent to which the
German language in South Tyrol represents an average minority language per
se can therefore be questioned, to some degree at least. This does not exclude
the fact that the solutions adapted in South Tyrol can be regarded as an ideal
case in terms of minority language media. But it must be observed that the
economic investments in locally produced television in German in South Tyrol
is not bigger than in some of the small countries we have also been studying
(e.g. Finland and the Netherlands); the unique situation occurs mainly as a
result of a combination of the local and transborder supply, as well as loyal
viewers due to the strong cohesion of the language group.
Danish speakers in Germany

Looking at the situation of Danish speakers in northern Germany, we see a
different picture. This minority lives in and around the Flensburg region located
at the border between Denmark and Germany. So the Danish language com-
munity in northern Germany has a small kin-state (Denmark) just across the
border. The minority consists of approximately 50,000 Danish speakers, well
under one percent of the total German population. It has a regional weight of
around 1.6 percent. The Danish language is regarded in Germany as a minority
language and protected by a bilateral agreement with Denmark. The agreement
primarily covers print media, but to some extent includes transborder television.
The media landscape for the Danish-speaking minority in Germany can be
regarded as incomplete both from institutional and functional media perspec-
tives. In northern Germany there is a bilingual daily newspaper that mainly
serves the Danish-speaking population. There is also a quite marginal locally
produced amount of television, internet and radio supply. But there are signifi-
cant problems regarding access to PSB television in Danish. Only a portion of the
Danish speakers living on the German side of the border is covered by spillover
190
from terrestrial digital broadcasting. Access to the public service broadcasts via
satellite provided by Danmarks Radio [DR] is restricted by encryption due to
problems associated with copyright protection. The government of Schleswig-
Holstein has offered a terrestrial channel to Denmark for relay-broadcasting,
but DR has not accepted the offer due to copyright problems. Cable networks
operating with analogue technique carry the DR channels, but this issue has
not been solved for digital cable networks.
Many Danish speakers in the region therefore receive a limited supply of
TV-programmes from Denmark, and the situation has deteriorated with the
introduction of digital television. This case illustrates problems associated with
language minorities living in big countries at the border of small kin-states,
especially how broadcasting from a small country is associated with more
problems than broadcasting from a big country.
Catalan speakers in Spain

For assessing the situation for minorities in big countries that do not have
kin-states providing transborder services, we selected Catalonia in Spain. This
language group does not consider itself a minority, but rather sees Catalan as
a regional language. This is a special case also because the minority is numer-
ous. However, in its competition with the Castilian spoken by the majority
throughout Spain, the situation of the Catalan language is contested. Situated
in southeastern Spain, the Catalonian language group consists of approximately
4.6 million speakers, or nine percent of the total Spanish population. In the
region, approximately 33 percent speak Catalan. The Catalan language is a
co-official language in Catalonia. We here regard it as a language without a
kin-state although Catalan is the official language of the small adjoining coun-
try of Andorra in the Pyrenees mountains – itself the sixth smallest country in
Europe. So there is not a lot of transborder supply from Andorra.
The media landscape for the Catalan-speaking minority in Spain can be
regarded as complete both from an institutional and a functional perspective.
Television and radio broadcasting in Catalan is focused on the region, where
in contradiction to the national level advertising revenues can still be generated
in support of public service broadcasting in the minority language (this right
to advertise has also been defended from the point of view of the presence of
Catalan language in advertising, as the public service broadcaster is the only
broadcaster that broadcasts exclusively in Catalan language). In a Spanish
context this arrangement has been accepted as necessary to secure the funding
base necessary for regional broadcasting (Moring & Godenhjelm 2010). The
minority language is fostered by new children’s channels explicitly intended
to grow skills in Catalan among children of migrants. There is a considerable
influx of migration from Latin America as an audience living in Catalonia. The
191
number of Catalan speakers is also big enough to attract some private com-
mercial broadcasting.
Figure 3. Use of media in Catalan and Castilian language among speakers of the
two languages in Catalonia (reach, %)
74
45
Catalan language
Consumption in the Catalan language 43

37
23
group
55
22
Consumption in the Castillian language 48
49
36
31
14
Castillan language
Consumption in the Catalan language 15

15
5
group
80
43
Consumption in the Castillian language 52
47
38
0 10 20 30 40 50 60 70
Television Radio Internet Weekly Daily
newspaper newspaper
Source: El Barómetre de la Communicació, 2008
As an example of a language without a nation state, the Catalan-speaking

minority illustrates something of an ideal case. The size of the minority lan-
guage audience has created a demand that is catered to in all types of media,
to varying but important degrees, of interest also to commercial broadcasters.
However, even in these extraordinary circumstances PSB has maintained a
leading role in the provision of services in the Catalan language, and is sup-
ported by extraordinary arrangements to secure a sufficient funding base for
this. The population in Catalonia is predominantly bilingual and therefore to
a great extent use media in both Catalan and Castilian.
Whilst this is also the case regarding the majority language Castilian-speaking
population, among whom about one-third of the population views Catalan
language TV broadcasts, the situation is typically asymmetric to the benefit
of the majority language (Figure 3). This is not necessarily only an effect of
media supply; it may be affected by asymmetry in language skills if speakers
of Catalan are bilingual to a greater extent than speakers of Castilian.
Welsh speakers in the UK

Turning to a small minority without support from a kin-state in a big coun-
try, we can look at broadcasting in Wales. Situated in the western part of the
United Kingdom, the Welsh language group consists of approximately 588.000
192
Welsh speakers, or roughly one percent of the total UK population. About 20

percent of the regional population speak Welsh, which is an official language
in Wales. The media landscape for the Welsh-speaking minority lacks a daily
newspaper, but for broadcasting it can be regarded as institutionally complete.
The minority has access to its own Welsh-language TV channel called S4C,
its own distinctive radio channels, and print as well as internet-based media.
However, as we shall find, only in regard to television within the core group
of Welsh speakers is the use of media close to functionally complete. Welsh is
mainly used as a second language, and although big efforts by both the public
sector institutions, mainly the Welsh Language Board and educational institu-
tions, the Welsh language is rarely spoken at home. This is also reflected in
the use of Welsh media, regarded as a complement to English language media.
S4C is a publicly funded TV channel that operates in close cooperation
with BBC Wales. In addition to state funding, it can generate extra income via
advertising revenues, which in turn are primarily used to benefit non-Welsh
speakers by providing subtitles in English. This TV channel presents an in-
teresting case in terms of rights to broadcast sporting events such as play in
Figure 4. Media use and social participation in Welsh among people with different
levels of language skills (%)
Watched welsh TV
Followed news in Welsh
Read news about UK in Welsh
Listened to Welsh radio
Read a newspaper or magazine in Welsh
Participated in a Welsh cultural event
Read a book in Welsh
Gone to a Welsh theater
Participated in an event related to litterature
Visited a Welsh webb-site
0 20 40 60 80 100%
Speaks fluently Speaks well Speaks fairly well
Source: Beaufort Research, 2005)
193
the Rugby Union. Due to its size and broadcasting with a Welsh commentary,
S4C can buy broadcasting rights at a lower price and thus enjoys a favourable
competitive advantage compared with larger TV stations. This feature helps the
channel reach an audience that would otherwise not be interested in Welsh
programming because sporting events gather a significant amount of viewers
among the majority language speakers even though the commentary is in Welsh.
In international comparison, the television supply in the Welsh language
enjoys a uniquely high level of funding. It can be concluded that the level
of funding has, indeed, proven its worth in terms of a high level of reach
particularly for Welsh television among viewers with different levels of lan-
guage skills (Figure 4). The present media landscape in Wales thus illustrates
the potential benefits that public service provision has not only for minority
language speakers but for majority language speakers as well. It also indicates
that media usage is guided by content quality rather than quantity. The Welsh
language TV station has recently been faced with the threat of major cutbacks
in funding which might lead to future changes in its operations (Guardian
20.10.2010)7. As it stands now, the case of Welsh language media in the UK
illustrates how minority language media can operate without support from a
kin-state. It also illustrates how essential public media provision can be for a
small minority language to survive; and it further provides a case where a big
country can decide to share out considerable resources to support a relatively
small minority, this not being the case in many other big countries in Europe
such as France and Germany.
Public service broadcasting for minorities in small countries

Swedish speakers in Finland
Finland is a particular case as a small country with two national languages
(Finnish and Swedish) that are accorded equality by constitutional law. This of
course affects everything that is language related, and thus also broadcasting.
The Finnish broadcasting company (YLE) is expected to “…treat in its broad-
casting Finnish-speaking and Swedish-speaking citizens on equal grounds…”
(Act on Yleisradio Oy. Section 7). The Swedish-speaking population in Finland
is mostly located in the far south (Uusimaa province) and northwest (Ostro-
bothnia province) of Finland. The population consists of approximately 290.000
Swedish speakers, or 5,4 percent of the total Finnish population with a regional
weight of 7,3 percent in Southern Finland and 50,9 percent in western Finland.
The Swedish media landscape in Finland is institutionally next-to complete.
There are eight daily newspapers, two PSB radio channels (one mainstream
channel, called Radio Vega, and a second for young people, called Radio X3M),
7. Guardian 20.10.2010, S4C’s budget to fall by a quarter over four years. BBC to take over most of the re-
sponsibility for funding the Welsh-language broadcaster from the DCMS in 2013. [Available: http://www.
guardian.co.uk/media/2010/oct/20/s4c-budget-cuts-bbc] (10.12.2010).
194
and a dedicated TV channel (FST5) with daily broadcasts covering the entire
prime time. Whilst Swedish is a national language in Finland, due to its mar-
ginal proportion of the total population it is de facto in a minority position. The
Swedish language has a kin-state (Sweden), but the extent to which the Swedish
culture in Finland leans on the kin-state relation differs considerably between
the predominantly bilingual south (Uusimaa) and the western coast (Ostroboth-
nia) where there are much closer relations with Sweden, and in earlier years a
traditional presence of analogue spillover broadcasting on radio and television.
In Ostrobothnia relay stations increasing the coverage for television pro-
grammes from Sweden were set up during the era of analogue broadcasting
(before August 2007). Arrangements allowing distribution of the full contents
of all major television channels from Sweden are continued in the digital era.
A relay station network for direct on-the-air access was set up at low cost for
this audience. This arrangement was made possible by a special agreement with
broadcasters in Sweden. In Uusimaa a compilation of programmes produced
by the public service broadcaster in Sweden (SVT) was available free to air
until the digital switchover, but is now only available for monthly subscription8
that requires a decryption card.
Among Swedish-speaking Finns, the weekly reach of FST5 is around 60-
70 percent (Finnpanel 2009). This domestically produced Swedish-language
channel produced by YLE (FST5) has proven to be the crucial medium for the
language minority to reach the majority population, as well: a recent survey
among Finnish-language speakers shows that almost 70 percent sometimes fol-
low Swedish media via FST5. Television is the most important medium among
the population; 56 percent say they follow FST5 and 6 percent say they follow
television channels from Sweden (TNS-Gallup 2009, N=1142). Thus, for the
Finnish population the contact to Swedish language television almost exclusively
occurs through the domestic public service channel.
In contrast, among Swedish speakers in Ostrobothnia programmes from
Sweden dominate viewing while in southern Uusimaa the more limited service
has never attracted much interest among predominantly bilingual speakers.
Thus, in terms of functional completeness in broadcasting, we see two quite
different landscapes in Finland (Figure 5). Interestingly, the preferences for
language do not differ dramatically between southern Finland and Ostroboth-
nia, whereas the actual behaviour does. This signals that also in predominantly
bilingual southern Finland, the strict preference condition is met. The problem
relates to supply, and the actual media use would look different if full access
to kin-state broadcasting from Sweden was available.
A second interesting observation is that the viewing of the domestic televi-
sion channel FST5 is almost equally popular in Uusimaa and Ostrobothnia. The
difference in viewing pattern emerges mainly from a different choice of com-
8. In the Capital Region cable television network the cost was circa 14 Euro per month in 2010.
195
Figure 5. Preferences for television language and actual language use among
Swedish speakers in Southern Finland (Uusimaa) and the West Coast
(Ostrobothnia). (N=703) (%)
4
8
20
43
66 28
Mostly in Finnish
67
Equally in both languages
Mostly in Swedish
53 52
23
25
11
Preferred Used Preferred Used

language language language language
Uusima Ostrobothnia
Source: TNS-Gallup 2009)
mercial contents. In Ostrobothnia Swedish speakers chose TV4 from Sweden,

while in southern Finland they chose the Finnish commercial channel MTV3.
Swedish television in Finland receives dramatically less funding than Welsh
television in the UK (approximately 20 percent at current financing levels
2010). This case demonstrates that television services catering for the needs of
minorities can be – and have been – made available also in small countries.
Moreover, as in Wales and South Tyrol, this case yet again demonstrates the
relevance of domestically (locally) produced television supply in the minor-
ity language to bridge between the language communities. The differences
observed between media use among Swedish-language speakers in southern
Finland and Ostrobothnia provides further evidence of the importance of un-
hindered transmission of kin-state broadcasting.
German speakers in Denmark

Despite being a small minority in a small country, the German-speaking mi-
nority in Denmark is extensively served by transborder radio and television
broadcasting. The German-speaking minority is mainly located along the bor-
der between Germany and Denmark. Exact details regarding the amount of
196
these speakers vary, but it can be estimated at something between 12.000 and
15.000, representing well under one percent of the total Danish population.
The regional weight of this minority is estimated at something between 5-6
percent. The German language in Denmark is regarded as a minority language
guided by the previously mentioned bilateral agreement between the two states.
In contrast to the situated presented earlier regarding Danish-language
television supply in Germany, German-language television in Denmark is not
encrypted. This allows for relatively free access to German television program-
ming. This case provides a useful example, paralleling South Tyrol, of how
minorities close to big kin-states suffer less from copyright restrictions than
minorities related to small kin-states. Whilst the transborder access to German
media is large, the media landscape can, however, be regarded as incomplete
from both institutional and functional perspectives.
There is a regional daily newspaper in German and small scale internet and
radio media services produced in the region. But there is almost no locally
produced broadcasting supply for this minority. In this situation, and with a
growing supply of Danish and also English-language television, the German
audience has to a significant extent abandoned German language television
and is partly in a process of assimilating into the Danish majority (see Moring
and Godenhjelm 2010). Thus, this case provides an example of how lack of
locally produced broadcasting supply, even in the presence of extensive kin-
state supply from a big country, may contribute to a negative development of
the minority and its related culture.
Frisian speakers in the Netherlands

Friesland in the Netherlands is an example of a small country that, through an
arrangement of combined funding (public funding from the state and the region;
in addition to some advertising revenues) offers PSB radio and television in a
minority language. The Frisian language is spoken by approximately 470.000
people, most of whom live in the province of Friesland. This is 2,9 percent of
the total population in the Netherlands, and 74 percent of the population in
the region. Frisian enjoys the status of second official language, which requires
provisions of a full range of services in Frisian.
Whilst there are groups of speakers of Frisian speakers also in Germany
(the total size of which is estimated to be about 10.000 speakers and a total of
30.000 who understand the language), Frisian is not supported by a kin-state.
In terms of media supply, in the Netherlands this is much richer than in Ger-
many.9 Thus, Frisian language and culture is in practice dependent of media
supply provided in the Netherlands.
9. For details, see the monitoring reports of the Charter, available: [Available: www.coe.int/t/dg4/education/
minlang/Report/Default_en.asp] (1.12.2010).
197
From an institutional perspective, the supply of broadcasting in the Fri-

sian language (provided by Omrop Fryslân) is relatively complete. The total
budget of Omrop Fryslân amounts to about one-tenth of the budget of Welsh
television in UK. With this, the company offers a radio station that broad-
casts 17 hours a day, and a television station broadcasting 2 hours daily. The
rest of the media landscape is rather weak; newspapers use some Frisian
and publish articles in the language, and there is an extensive literature in
the language. But in terms of daily media supply there is a predominant
dependence on PSB and related web services. Thus, this case provides an
example of a small minority in a small country that is served by a relatively
rich broadcasting supply, in a situation where neither the market nor a kin-
state provide media services.
Conclusions
In this chapter, we have studied examples of broadcasting services for minori-
ties in select European countries, and across a rather good range of regional
locations. Our main question, following the theme of this book, relates to how
size affects broadcasting. In this case the focus has led us to investigate numer-
ous minorities in both larger and smaller countries. Moreover, the topic of this
chapter has encouraged focusing not only on the size of the country that hosts
the minority, but also on the size of a relevant neighbour, here called kin-state.
The similarities and differences we identified may not be entirely expected.
Regarding the size of the hosting country, we know from the literature that
many big countries do not cater for broadcasting to minorities. But we did find
that one of the big countries (UK) has equipped one of its minorities (Welsh)
with a particularly well-funded television channel that has made a difference
for this minority, not only in how it reaches Welsh-speakers but also in how it
is able to cross the language barrier between populations. For the policy maker
this points to the essential fact that money matters in this field as in all others,
and that only funded policies are likely to produce desired results.
In another big country, Italy, we found that domestically produced broad-
casting wins over even very rich kin-state broadcasting. In South Tyrol it is
the regionally produced German-language channel that engages the audience
most strongly, whilst the transborder supply from surrounding countries serve
to enrich the German media landscape further and make it functionally com-
plete for this audience.
We have also presented examples from small countries that support their
minorities with less costly yet effective broadcasting services. The Frisian speak-
ers in the Netherlands are among the few European minorities that are served
by a daily domestically produced broadcasting service. For this language,
198
radio and television broadcasting are essential mass medium in support of the
language’s daily use
For Swedish-speaking Finns, broadcasting services vary – demonstrating
important nuances and variation even within a single country. In Uusimaa the
services resemble those of a country without a kin-state while in Ostrobothnia
the transborder influx from Sweden is considerable. This case allowed us to
study differences in preference and use patterns. We found that preferences
are quite stable. Whilst the south is predominantly bilingual and Ostrobothnia
more unilingually Swedish, it is nonetheless clear that preferences for television
services in Swedish are almost identical in both regions. The unhindered access
in Ostrobothnia to kin-state broadcasting from Sweden has led to a function-
ally complete media use in this region, whereas the use is complementary in
southern Finland. Based on this example, the policymaker may consider the
fact that also predominantly bilingual minorities may fulfil what we here have
called the strict preference condition: if relevant services with competitive
quality are available, the minority will prefer to use them. The Finnish case
also, in the context of a small country, shows how a domestically produced
television channel may involve the interest from the minority and at the same
time bridge between language groups, something of considerable importance
for prosperity and peace.
In cases where there are no domestically produced broadcasting services
available in minority languages, the supply across borders is particularly crucial.
Two minorities on either side of a shared border between Germany and Den-
mark provide examples of how the size of the neighbouring country matters.
In Denmark access to German language broadcasting is good. Germany, as a
big country and market, has a broadcasting policy that allows for transmitting
contents more widely, and especially regionally, without encryption. In con-
trast, adherence to variable copyright regulations often means that small states
must encrypt their signals – and thus are at a comparative disadvantage. In the
digital age this has introduced a sharper border between these countries as
many Danish speakers in Germany are not willing to pay for access to chan-
nels they earlier viewed without surcharge.
In South Tyrol in Italy and in Ostrobothnia in Finland, copyright related
problems have been solved through special agreements between the countries
with their broadcasters. Policymakers would likely benefit from study of such
arrangements in cases where transborder services to minorities have been hin-
dered rather than improved by digitisation. We also see this as one particularly
relevant policy field where the EU could helpfully secure common policies to
benefit more members in member states.
A final reflection is that irrespective of country size or the size of a language
minority, in all cases we have studied PSB operators are key players in securing
an adequacy of services for minorities and regional cultures. This is factually
199
the case even in Catalonia where the minority is of a population size that ex-
ceeds many of the smaller European countries. Even in an institutionally rich
media landscape offering a good supply of contents in the Catalan language,
we find effects caused by asymmetry that typically reflect negatively on the
position of a minority: Catalan speakers use Spanish media more than vice
versa. And there is a general acceptance that regional PSB broadcasting, such
as in the Catalan language and contrary to national broadcasters, should have
the right to broadcast advertisements in order not to lose competitiveness in
a increased competitive market. Thus, issues related to the appropriateness of
different approaches and mixtures of funding require a more nuanced treat-
ment than seems to be preferred among many policymakers today, given the
trends in ex ante legislation.
Does size matter in the aspects being treated in this chapter? Yes, it absolutely
matters. But it is vital to understand that policy matters more. In bigger and
smaller countries, and for bigger and smaller minorities, broadcasting services
vary more according to the will and activity of policy makers in establishing
principles and solving problems related to size, among much else, than only in
terms of any mechanical relationship to size. If our effort to cultivate a deeper
appreciation of the richness of practice in broadcast provision for all the varied
and lively populations that comprise the people of Europe has been grasped,
this chapter has done a fair service. If the substance encourages efforts to craft
solutions that are appropriate in varying contexts with differing circumstances,
this chapter will have achieved its greater purpose.
Acknowledgements
This chapter partly relies on data collected as part of a project financed by Magma, the
Swedish think tank in Finland (Moring and Godenhjelm 2010), and has been written as part
of the project Bilingualism, Identity and the Media in Inter- and Intra-cultural Comparisons
(BIM). This project has benefitted from financing provided by the Academy of Finland. The
authors also thank Professor Eva Pons, Doctor Cristina Cullell March, and researcher Laszlo
Vincze for their assistance with data gathering in Catalonia and South Tyrol.
200
Big Formats, Small Nations
Does Size Matter?
It is not that the small countries follow on from the big countries. Everyone
wants to start. But the biggest are the key springers of the business. (Gary
Carter, FremantleMedia)
At a time of perceived crisis in contemporary broadcasting, some commentators

claim we are witnessing the mutation of television from a universally avail-
able medium consumed “within the home, addressed to a national audience”
into something more fragmented, smaller and “radically privatized” (Turner &
Tay 2009: 1). Although our traditional understanding of television may be un-
ravelling with the proliferation of new platforms and modes of consumption,
television entertainment formats appear to represent something reassuringly
familiar and at the same time new. In the first instance entertainment formats
continue to be acquired and adapted by big and small nations alike because of
the large audiences these media events garner. In the second formats represent
both a creative and commercial response to the challenges facing television
broadcasting in multimedia environments to engage audiences in a much more
participatory way. This chapter investigates what accounts for the success of
entertainment formats in relation to two aspects where the size of a country
may have an impact: namely production and reception.
First the chapter investigates how the flow of format trade works in relation
to larger and smaller European markets where, in theory, formats can be made
to measure and thus work well regardless of production cultures. Larger players
are mainly based in larger countries and have often taken the lead in develop-
ing more expensive high profile reality entertainment shows. The issue to be
treated is the extent to which lucrative and larger scale primetime studio-based
entertainment formats can also emerge from smaller territories, and as opposed
to cheaper factual entertainment or game show formats for less lucrative slots
(typically daytime and early evening). This distinction is important. Although
primetime entertainment formats accounted for less than 6% of format episodes
201
exported globally between 2006 and 2008 (Frapa 2009: 21), in Europe they
accounted for 64% of spending on formats – e.g. Pop Idol and Deal or No Deal
(Attentional 2009: 60). This chapter investigates the extent to which players in
small nations can function as key actors in the global format business.
Second, this chapter considers audiences and reality entertainment formats
by investigating why programmes like X Factor (Syco) are so successful across
large and small nations worldwide. The case study of FremantleMedia is useful
for exploring two themes: 1) risk management in the format business and 2)
the idea of international formats as made to measure for small nations. Given
the case and industry issues of key focus, we confine analysis to Europe. Com-
bining political economy and audience analysis, the chapter generates insights
about production in and between broadcast markets of varying size. In this we
aim to deepen understanding of the relationship between media production
and reception in big and small nations.
Format trade
One outstanding feature of television programme trade in recent years has been
the growth in formats as producers and broadcasters seek the cost benefits of
global production and distribution. According to a report by industry analysts
Oliver and Ohlbaum (2007: 3), global TV formats accounted for 10-15% of peak
time schedules across Europe in 2007, and 20% (€3bn) of all non-news content
spend. International formats were expected to take as much as a 40% share of
peak time schedules in the future (ibid: 5). Moreover, according to the format
trade body, Frapa (2009: 8), the global value of the production volume gener-
ated by traded formats grew from €6.4bn in 2006 to €9.3bn in 2008. Of course
this trade in formats is not new and can be traced back to the earliest days of
television, and even before that to radio. Yet one notable characteristic of this
trend since the 1990s has been the extent to which some smaller nations have
emerged as players and exporters alongside players based in larger countries.
Historically the United States has dominated global trade in finished program-
ming. Indeed, broadcasters in most European territories have a trade deficit
with the US because they acquire substantial amounts of American feature films
and television series which are available at low cost and thus efficient for fill-
ing round-the-clock channel schedules (Attentional et al. 2009: 148; Steemers
2004; EAO 2002). According to the Television Research Partnership (2008: 20),
the US accounted for 76% of the global trade in finished programmes in 2007
(59,600 hours), followed by Britain with a 7% share.
But in the format trade business American dominance is not nearly as strong.
The same study by Oliver and Ohlbaum (2007: 19) found the US in second
place with a 13% share of global formats by source, ahead of the Netherlands
202
(9%) by a fair margin but trailing far behind the UK’s impressive 43% share.1
But it’s certainly important to observe that the Netherlands was the third larg-
est exporter of formats in 2009 in number of formats, hours of adaptations,
and exported episodes (Frapa 2009: 13-15). Sweden is an emerging player,
although Britain exports more formats than Sweden, Norway, Denmark, the
Netherlands and Germany combined (ibid: 101). It is worth noting that while
some smaller, richer countries export a few formats, as with Sweden, they are in
fact net importers (Waller 2006a). According to Frapa, between 2006 and 2008
the Netherlands (64 imports; 35 exports) and Sweden (39 imports; 22 exports)
imported more formats than they exported. Compare this with the UK which
imported 37 formats but exported 146 (Frapa 2009: 11). In fact four countries
accounted for over 75% of exported episodes (Frapa, 2009: 14): the UK (15,981
hours), the USA (13,485), the Netherlands (9,364) and Argentina (6,877).
It is perhaps encouraging to note that small European countries with minor-
ity languages (the Netherlands and Sweden) have managed to break into the
international marketplace as originators of formats (Waisbord 2004: 361). Indeed
some small countries do rather better at exporting formats than exporting more
dramas which are more culturally-specific. But to what extent is market size a
key factor in determining success? It is true that larger transnational corporations
like UK-based FremantleMedia are keen to secure shows from ‘emerging ter-
ritories’ outside Britain and America (Rushton 2010). According to Tony Cohen,
FremantleMedia Chief Executive “The prejudices about where things come from
are all melting away. ‘Is it good or is it not good?’ is the only question [now],
not ‘Where did it come from?’” (cited in Rushton 2010). Indeed investment in
format ideas can be lower than for more complex drama projects, and it does
not really matter where a format idea originates. Creatives in small countries
come up with ideas too. However a key factor is global implementation, which
does, as we shall see later, tend to imply consolidation in order to compete on
the global stage. As Waisbord suggested, in the long term the cards are stacked
against smaller countries and smaller producers: “Although the pool of global
exporters has expanded beyond traditional Hollywood studios as industries
matured, companies based in big and wealthy countries have better chances to
become global exporters” (2004: 362) simply because they have more resources
to translate their hit shows globally.
Format exports by some small countries do run counter to an oversimplified
view of media imperialism because smaller countries do occasionally achieve
international success, even in America which is one of the most culturally
resistant yet commercially lucrative overseas markets. The most notable of
these is the Dutch company Endemol, originator of Big Brother, Deal or No
1. A similar study by the Television Research Partnership gave the UK a 53% share of format airtime and 52%
of titles in 2007. The Netherlands accounted for 18% of format hours and 9% of titles; and the US accounted
for 14% of format air time and 19% of titles (2008: 28)
203
Deal, and Wipeout). To be fair, however, one should note that the Spanish
company, Telefonica, owned the majority shares until 2007 and today Endemol
is co-owned by Berlusconi’s Mediaset, America’s Goldman-Sachs and founder
John de Mol (Ashton 2010). So even when a company from a smaller country
is successful, that doesn’t mean it will remain a small country company. We
will come back to this later.
Some of the success that various players enjoy in format trade seems to
be a factor of cultural proximity between different countries – what Sinclair,
Jacka and Cunningham (1996) called ‘geolinguistic regions’. They concluded
that countries are more likely to exchange programmes if they share cultural,
linguistic and historical ties. Thus Britain tends to get preferential access to
the American market because of a shared language (Collins 1989). Within
Scandinavia there is cultural proximity, a geolinguistic region, and a tradition
of working co-operatively that provides a platform for exchanging formats
there. This has allowed companies to strengthen their expertise in adapting
shows to take account of different cultural values and traditions (Frapa 2009:
91; Attentional et al. 2009: 148).
Shifting focus from exports to imports one could argue that formats help to
reinforce the idea that smaller countries are ‘producing’ home-grown content
to satisfy cultural and political objectives even if the formats are acquired from
transnational corporations based in larger countries (Moran 1998: 22-3). For
smaller countries formats can reduce the financial pressures of development,
as more of the risk is taken on by independent producers which are compen-
sated by the retention of secondary, overseas and ancillary rights (Oliver and
Ohlbaum 2007: 25). Even with relatively ‘closed adaptations’ there is still some
scope for “omission, inclusion, substitution or permutation” (Moran 2009a: 46).
The adaptations help to satisfy local preferences and cultural sensibilities and
therefore maintain audience attention (Njus 2009: 125). These changes may
focus on the obvious, such as the choice of host or question topics, but can
also extend to the vibrancy of colours on screen, the length of the show, and
slight adaptations to game rules, programme structure or set design to match
the prevailing television culture of each country (ibid).
This works as long as the overall integrity of the brand is not damaged be-
cause “the ideal format has to be global, but it has to look local” (Jarvis 2010).
The general assumption is that given a choice most people prefer whatever
seems like home grown entertainment (see Morley and Robins 1989; O’Regan
1993; Sinclair, Jacka and Cunningham 1996; Larkey 2009). In this respect Straub-
haar suggested the issue is ‘cultural proximity’, the idea that audiences prefer
programming and content that “is closest or most proximate to their own cul-
ture” (2000: 202). Similarly from an economic perspective, Hoskins and Mirus
suggested the notion of ‘cultural discount’, the idea that cultural differences
relating to style, values, belief, institutions and behavioural patterns will limit
204
the appeal of foreign programmes (1988). Formats have the potential to over-
come this cultural discount and achieve cultural proximity precisely because
they are adapted to local preferences (Lantsch et al 2009).
The “glocalisation” (Robertson 1995) of formats, involving globalising, re-
gionalising and localising forces, is “a commercial strategy to maximise profit”
(Waisbord and Jalfin 2009: 57). In this sense formats are also one outcome of
globalising tendencies where transnational companies customise their formats,
channels and products to appeal to differentiated local markets and maximise
revenues. At the same time formats allow local media producers in smaller
countries to “draw on the codes and conventions...of the global popular to stamp
their own product, channel, distribution network as professional, competitive
and attractive to [domestic] audiences and, more importantly, to advertisers
who sell transnational products” (Boyd-Barrett 1997: 16; see also Waisbord
and Jalfin 2009: 57-58).
Reasons for the success of formats

‘Size doesn’t matter, at least not for this country [the Netherlands]’ (Frapa,
2009: 81)
One can argue that country size is but one factor in the global format business,
and that is certainly true. There is a strong case for the argument that “media
policies, funding, market competition and broadcast history…shape local pro-
duction” as much as “national social cultural particularities” (Jensen 2009: 165).
Increasing demand for formats with an established track record elsewhere is
keyed to the fact that such content is less risk-laden and less costly than original
programming (Waller 2006a; Oliver and Ohlbaum 2007: 3). Broadcasters like
entertainment formats because they are less risky than other kinds of content,
especially important in an economically unstable environment. Growth has been
driven by the rise of multi-channel television. In this sense smaller countries
function as testing grounds for new ideas. Risk-averse US networks, for example,
can outsource much of their risk-taking to producers and networks in Britain,
the Netherlands, Scandinavia, Japan and New Zealand, using performance in
these territories as a basis for making their own decisions for launch (Oliver
and Ohlbaum 2007: 16; TBI 2010a: 10)
This begs the question: why are some countries more prepared to take risks?
Both Britain and the Netherlands, the first a larger country and the second a
smaller one, have been significant exporters of formats while larger European
territories such as Germany, France, Italy and Spain have been among the
greatest importers (Oliver and Ohlbaum 2007; Frapa 2009). This would suggest
they are more risk averse. One way to pinpoint the factors determining export
205
propensity, and success, is to ascertain what countries that are successful in

formats such as the UK, the Netherlands and Sweden have in common (Waller
2007; Oliver and Ohlbaum 2007).
First, successful format exporters in Europe tend to have a vibrant independ-
ent production sector that is “bedrock” for development and grows experi-
ence in navigating the international marketplace (Jarvis 2010). But a vibrant
production sector is not enough. The sector has to be sufficiently ‘incentivised’
to take risks and develop new formats because they are allowed to retain the
rights to exploit these in overseas and ancillary markets. This is where British
producers have benefited from a transfer of rights away from broadcasters to
content makers since the 2003 Communications Act. They have also benefited
from quotas that require broadcasters to commission 25% of their output from
independent suppliers. Similarly the Dutch independent production sector
has become strong because it has retained rights (Frapa 2009: also Oliver and
Ohlbaum 2007: 11). The historically fragmented nature of Dutch public service
broadcasting also encouraged independent suppliers over many years to supply
a broadcasting system used to commissioning as well as to originating content
in-house. This stands in stark contrast to Germany, Italy and Spain where inde-
pendent producers have fared less well in format production and distribution.
In Germany’s case this is because broadcasters do not pay for the development
of formats, and if they do they prefer to retain rights (Biernat 2010).
Second, the successful origination of formats depends on a competitive
broadcasting sector, which in the case of Britain, the Netherlands and Sweden
encompasses strong public service as well as commercial outlets that are willing
to invest in new ideas and trial them. In Britain public service broadcasters will
invest in development (Jarvis 2010), unlike their German counterparts. Accord-
ing to Frapa, public service broadcasters in the Netherlands originate or com-
mission 53% of all new formats “demonstrating impressively that it is not only
up to private networks to foster creativity” (Frapa 2009: 80). This suggests that
entertainment is still an important part of the public service remit, promoting
innovation and investment in domestic content and providing a showcase for
overseas buyers. However, most format commissioning within Europe is by
commercial broadcasters who invest about 10% of their programming budgets
in formatted programming that is mainly developed elsewhere, compared to
only 0-3% similarly invested by publicly funded broadcasters (Attentional 2009:
13). But the key point is that some broadcasters with public service remits in
countries like the Netherlands, Scandinavia and Britain are willing to invest
in developing new home grown formats rather than buying them in. This is
because public funding makes them less focused on audience share and more
open to risk-taking (Attentional 2009: 306).
Third there must be a tradition of making reality and factual entertainment
shows for peak viewing hours (Waller 2007), which can then be most readily
206
adapted for overseas markets. In the case of formats this means the ability to
generate and develop many ideas quickly for the international marketplace. It
also depends on generating the expertise necessary to translate these ideas to
other settings (Moran 2009: 44).
Thus, being small is not a disadvantage for countries like the Netherlands
and Sweden because of these success factors. Clearly, then, format trade is
not only down to size. Like Britain, a larger competitor, the Netherlands and
Sweden have a number of key independent producers who have access to
a sufficient number of domestic outlets that are willing to experiment with
new ideas. There is a history of developing formats for different parts of the
schedule, resulting in a depth of expertise about how to translate these to other
territories. Importantly, in both countries there has been demand from public
service media as well as commercial outlets. In contrast, many of the smaller
markets in Europe are “still reliant on tried and tested formats from the larger
nations and, with very little overall export activity, have little incentive to drive
growth in formats that could potentially be sold in the international market”
(Attentional 2009: 317). Under such conditions smaller nations have been far
more active in the import rather than the export trade.
Who are the real winners in the format business?

In terms of format development and trade, size of a country is less relevant than
the ability of companies to operate on a transnational basis as “global content
networks” (Waller 2006a). This enables rolling out the larger more complex
‘shiny-floor’ reality entertainment shows efficiently and quickly across different
territories (Waller 2007). Size in this case is no longer the issue, as explained
by Colin Jarvis at BBC Worldwide:
To be honest there isn’t so much difference … In the past you would have
had difficulties with some of the equipment. You would have had difficul-
ties with the personnel, the expertise of various production people. And you
would have had difficulties with budgets in the sense of the amount people
will pay for television. But in the last few years, all of that has found a level.
And successful formats no matter how big or small, they kind of traverse
all of the markets because technical expertise now is easily accessible and
available and trainable (Jarvis 2010)
This transferability underpins the strategy of those major companies that have
built their success on cornerstone properties such as Pop Idol (19/Fremantle-
Media) Big Brother (Endemol), Test the Nation (Eyeworks) and Dancing with
the Stars/Strictly Come Dancing (BBC Worldwide). The largest, most successful
properties mainly come from large international producers, usually in Britain
207
and America, with the expertise and resources to roll out a format quickly and
efficiently across many countries.
Where the format business was once focused on small companies licensing
properties to third parties, the business has now consolidated into more “verti-
cally integrated giants with production arms in multiple territories” (C21 2010a).
These companies are intent on retaining their intellectual property, “controlling
the brand” (Jarvis 2010) and using established formats to open new markets
that secure the overseas revenues necessary for growth at scale (C21 2010b;
Oliver and Ohlbaum 2007: 3). This has also impacted smaller countries because
it is characterised by a rise in consolidation and acquisitions.
In the Netherlands the top six independent producer groups already ac-
counted for 75% of the independent production sector in 2007 (Oliver and
Ohlbaum 2007: 12). In recent years, however, foreign rivals from large countries
have acquired key players. So, for example, Endemol has been owned by an
investment group since 2007, led by Goldman Sachs, Mediacinco and Cyrte. It
has also expanded its operations beyond the Netherlands through subsidiaries
and co-ventures around the world, including Latin America and the Middle
East. With a population of only 16.5 million the Netherlands is also home to
other leading format players. Several of these were similarly acquired by larger
transnational companies: 2waytraffic (acquired by Sony Pictures Entertainment
in 2008), IDTV (acquired by UK-based All3Media in 2003), and Blue Circle
(owned by FremantleMedia).
Similarly Sweden with a population of only 9 million has punched above
its weight, producing 78 international versions of 40 original formats between
2006 and 2008 (Frapa 2009: 85). These included The Farm and The Bar, origi-
nated by Strix, part of Sweden’s Modern Times Group. Strix was the company
that licensed the first production of Survivor (Planet 24, now Castaway), which
became Expedition Robinson in Scandinavia. Like the Netherlands, the inde-
pendent production sector in Scandinavia was already highly consolidated with
four producers (Strix, Zodiak, Metronome, and Nordisk) accounting for 60%
of all TV productions in 2006 (Waller 2006b). The market has since become
still more consolidated with the acquisition of Blu in Denmark by the UK’s
FremantleMedia in 2005. Dutch-based Eyeworks (Test the Nation) has acquired
companies in Denmark (Easy Film) and Sweden (ProduktionsBolaget and Nova
TV). Silverback in Sweden was acquired in 2008 by the UK’s ITV. Metronome
Film and Television was incorporated into the UK-based Shine Group in 2009.
Agostini, which is based in Italy, acquired Zodiak Entertainment in 2008. For
larger transnational companies the Scandinavian market offers an opportunity to
expand the scope of their global content and test new ideas ahead of a launch
in the bigger, costlier markets – especially the UK or the USA (C21 2009). This
in itself raises a set of questions about the home base of local companies that
are acquired by companies located in larger countries.
208
In summary, success in formats is not only an outcome of country size but

is more connected to the ability of companies to operate globally, which se-
cures the capacity to roll out ideas quickly. Ideas for new formats can come
from anywhere, including small countries. Yet any format player with serious
global pretensions needs to depart from the model of simply licensing their
ideas for a fee (through a distributor or on their own) to local producers or a
global producer. The largest and most successful players participate in produc-
tion through local subsidiaries or co-production partnerships. They build and
maintain their brands across countries, nurturing long-term relationships with
local broadcasters (Waller 2006c). In this way companies benefit from licensing
and production fees, and can control the production and distribution of their
creations much more effectively (Frapa 2009: 18; C21 2010b).
Audiences of Entertainment Formats

The question of size and reasons for success in the previous section are taken
up here through an extended analysis of formats as cultural and social experi-
ences. The intention is to combine political economic analysis of the format
trade across big and small nations with critical theories regarding risk and
knowledge. What makes entertainment formats a success with audiences has
been the subject of speculation for a decade, since the phenomenon of Who
Wants to Be a Millionaire? (Celador, now Sony 2waytraffic), Survivor (Castaway
Television) and Big Brother (Endemol) changed the face of television. Peter
Bazalgette said these reality formats started a billion dollar game (2005). The
story of formats is therefore not only about economic success but also about
how these big shiny floor shows represent a cultural phenomenon. A case study
of FremantleMedia offers insights into the success of these shows. Douglas
Wood (2010), former Head of Audience Research at Fremantle UK (now Head
of Research at Shine), commented on Got Talent (Syco and Fremantle):
It was up 40 per cent last year, how do you explain this phenomenon? What
shocked me during the week before the Got Talent final I had these conversa-
tions everywhere about the show, like with my grandmother, and I thought
‘you are watching Got Talent – that’s amazing!’ It replaced the weather as
something to chat about.
Such a cultural phenomenon is not limited to Britain or America but is appar-

ent in big, medium and small nations worldwide. As Wood noted, “it is very
rare that these shows don’t work. I have never come across a case where we
have launched a format in a small country and it hasn’t worked. Ninety nine
per cent of the time it works” (2010). Figuring out why these shows work is
the million-dollar question.
209
Risk evaluation
One reason for the success of entertainment formats is related to risk. The rise
of reality TV coincided with the rise of a ‘risk society’, to use a framework
popularised by Ulrich Beck (1992). According to this German sociologist,
people live with real and symbolic risks to health and life expectancy. These
risks are associated with modernisation. The perception of risk becomes key
to understanding how people manage different types of threats, such as the
perception of risks from car travel as opposed to aeroplanes. It is often noted
that the public is far more worried about flying than driving despite the fact
that they are statistically at far higher risk when driving. In the sociology of
risk researchers have identified strategies for risk evaluation and management
(see Palmlund 1992). This can include the management of visible risks such as
dangers to health, or livelihood, and the less visible such as moral risk.
Reality TV is a feral genre (Hill 2007). The genre is like a nature experiment
gone wild, where the introduction of a new species takes over a habitat and is
resistant to re-containment. Many cultural commentators have criticised reality
TV for being a moral risk – trash TV for the masses. It has also been perceived
as a cultural risk, contaminating local production with imported formats. This
perception of reality TV as a real and symbolic threat to quality TV and national
values is one way of evaluating a feral genre. But it’s also important to under-
stand that television is a risky business and reality TV is a way of managing
risk through the introduction of a strong and virulent genre. In this way we can
see negative and positive perceptions of reality TV as economic and cultural
risks. Different ways of evaluating risk become significant to understanding
the phenomenon of formats. International producers in the format trade can
be cultural risk producers, as some critics suggest, or from the point of view
of broadcasters they can be risk takers in the development of formats, and at
the same time risk containers, strategically evaluating and managing cultural
and economic risks in media environments.
From an industry perspective reality entertainment formats are a necessary
risk in an economically challenging market – necessary because audiences like
them. It’s a style of television that mixes different genres to create hybrids, such
as a variety show with singing and dancing and a game show with competi-
tion and voting. Reality TV reinvents itself on a rolling basis. At the same time
this is a genre that attracts audiences who want to see themselves as cultural
risk takers – trying out one new show, dropping another. This makes for an
unstable audience that like to watch a constantly changing genre. To make a
successful reality format means a production company has to be a both a risk
taker and a controller of risk. There will be failures. Rob Clark, President of
Worldwide Entertainment at Fremantle pointed out: “These shows are thought
through. They are finely tuned. They are not written down on the back of an
envelope” (2010). From the failures a finely tuned format may emerge; that is
210
the format that circulates worldwide as a low risk product in a high risk industry
with products aimed at a fickle audience.
In this sense, the risk factor certainly relates to matters of size. The players
willing to take risks have changed over the past decade as the business has
evolved. A common explanation for the success of reality TV in the 1990s was
that shows like Airport (BBC) were cheap to make compared to drama and,
as importantly, they rated highly with audiences. Even at then this was an
easy explanation for a complex phenomenon (see Hill 2005 amongst others).
Nevertheless, the relatively lower economic risks of reality TV (as opposed
to soap opera, for example), combined with independent production quotas,
meant that smaller producers and smaller nations could garner success from
big reality series. We saw in the previous section how the Netherlands and
Sweden have both performed well in the format trade. As the trend in reality
shows shifted from lifestyle experiment to talent, however, the opportunities
for smaller players reduced as the scale and expense of these live-event shows
increased. At present, the statistics indicate English language countries are
dominating. As the roll out of these formats continues apace, the key players
become the cultural and economic risk managers that other companies and
countries trust to produce hit shows.
The rollout of an entertainment format to different regions and countries
follows a discernable pattern, as mentioned previously. This geographic pattern
is not only about geo-linguistic regions and cultural proximity, but also about
the perception of risk. According to Rob Clark (2010) “there is a minimisation
of risk at a regional level”. If a format works well in Britain and America that
doesn’t mean it will work in Asia. Other countries need to trust that a format
can work in a similar culture or region. For example, the reality dating format,
Farmer Wants a Wife, (Fremantle and Associated Press) had a rollout that
worked across a large, a medium and a small European nation first. Clark (2010)
explains: “There were three things which happened to make it a success. It
went to Britain and had a great launch. It was formatted in Belgium. By giving
it a structure it minimised the risk because all of a sudden there was a pattern
to follow. And it went to Holland and was a huge hit”.
The perception of risk was further reduced as Farmer Wants a Wife was
transformed into a reality format and rolled out across Western Europe, then
to Southern and Eastern Europe, before breaking out to Australia. Thus, for-
mats are not only about selling but also about understanding how to evaluate
and manage cultural risks. Freemantle certainly understands this. Douglas
Wood (2010) comments: “The rest of the world looks to the UK and US as
a source of formats. This has changed over the past five years. If a format
launches on a Sunday night in the UK I know by Monday morning I will get
calls from France, Spain, and Italy for example, saying send us the ratings
for this format now”.
211
When a format launches successfully in the UK the risks are attenuated for
other broadcasters and smaller nations. Gary Carter (2010) notes: “TV is expen-
sive in the first series. Once you have done it once, you understand how to
make it leanly and that is the other benefit to the licensing broadcaster. They
buy on the basis of comfort and justification because of track record. They can
see it very clearly. They don’t have to imagine it”.
What broadcasters in other big and small nations look for is not only the
finely-tuned format but also risk management in action.
Made to Measure
Another reason for the success of entertainment formats is that shows like X
Factor are formats that adjust to local environments. In Albert Moran’s research
on the format trade he called this flexibility in production “open versus closed
formats” (2009). An open format is customised to suit a specific international
region or country. An analogy with fashion is useful, however, as a format like
X Factor is not so much open or closed as made to measure for a broadcaster
and their audience. The format is like a designer suit – you pay for their expert
eye, knowledge of cloth and form, and their instinctive sense of how a good
suit feels just right. The suit is made to measure in the way small adjustments
make it fit better. But the design, what you are paying for, remains the same.
As in fashion there are only a handful of producers that make it to the top
in the format industry. Clark (2010) comments on the clustering of production
talent for formats: “In theory anyone can join. In practice there are lots of bar-
riers, and it is better to hook up with a Big Daddy company who will promote
and market and give it love and attention and put the money behind it to go
international.” These Big Daddy companies manage real and perceived threats
associated with formats with regard to legal matters, production, marketing and
distribution issues within the format chain. They also offer needed skills in how
to make a quality format designed for mass audiences and publics worldwide.
As Clark (2010) says, “It is not the pony end of independent production. You
must have systems to roll out formats as quickly as you can without compro-
mising on the quality. We make it look easy, but it isn’t”. In the same way
that fashion lovers can tell one designer suit from another, from an industry
perspective there are shows that have the look and feel of one of the format
houses. For Clark (2010) it is important that “you always know a Fremantle
programme, there is a certain sheen and gloss and quality to it”.
A successful made to measure format from Fremantle is first and foremost
one that sticks with its original design. Other broadcasters from smaller produc-
tion environments are buying the look and feel of a specific format that already
has a gloss to it. Clark’s job at Fremantle is to make sure that local producers
know the format is a made to measure product: “The worst producer in the
212
world is one that knows better than the format. You don’t want that person. If
something is successful all over the world why would you want to change it?
Ninety nine times out of a hundred it won’t make it any better”.
When Fremantle sells a format to other regions and nations they sell a show
that can fit any broadcaster, with minor alterations. Vasha Wallace (2010), Senior
Vice President of Format Acquisitions Worldwide, noted that “the way we market
the format is always the same. It is always the essence of the show. Lets Dance
(Whizz Kidd) is about celebrity iconic dances. Hole in the Wall (Fuiji) is about
people falling in the water. Keep to the essence, what makes it a success”.
Fremantle has flying producers who work with local broadcasters and re-
gional production companies to ensure a format has a good chance of success.
From a production perspective, the scale of a local production environment is
not about the size of the nation and its population but rather the wealth of a
production culture and its knowledge base. The previous section noted how
Scandinavian countries were perceived within the industry as having good
production bases with skilled workers and access to sophisticated technology.
Eastern European countries must work harder to acquire such knowledge and
skills, usually with much less money. When a flying producer goes to Serbia
with Got Talent, the system at Fremantle ensures it looks the same as America’s
Got Talent – including the graphics, title, and music. The format system means
Serbia’s Got Talent immediately “associates itself with the biggest show on earth,
it brands it that way and gives it class” (Clark 2010). The system of the ‘format
bible’ puts in place the foundation stones – the set, auditions, casting, judges
– and the flying producers back this up with workshops where they pass on
knowledge from one production culture to another. Research on Norwegian
Idol, for example, showed precisely this balancing act of conserving the bible
whilst incorporating small variations in the local scripts (Njus 2009).
This made to measure approach can be seen in the way Got Talent works
in Sweden. Blu is a Scandinavian production company that is owned by Fre-
mantle. The Managing Director of Blu Sweden is Claus Leinstedt, former Head
of Production for Strix and responsible for reality formats such The Farm and
The Bar. The broadcaster of Sweden Talang (TV4) have bought the format
and the production skills and talent of Blu and its Big Daddy company. Got
Talent is a format that suits Sweden and needs few local alterations. According
to Leinstedt (2010) Swedish audiences tend to like British shows because of a
cultural affinity between these nations. He explains:
Got Talent should have the same look as the UK version because we think it
is perfect. … We have a smaller crew, smaller set design. We have less editing
hours, we do casting in another way. It is impossible for us to have a couple
of thousand people in the audience, so we use smaller venues... We are used
to this way of working in Sweden. We know how to make things work for
213
less. It is hard to get the quality of the UK show, so we have to find smart
ways and use creative producers who make it look as good for less money.
Leinstedt (2010) understands “what is good about a format is that you can watch
the idea” and see how it will work with some adjustment in another culture
and production environment.
To summarise, the question of why entertainment formats are so successful
with audiences raises several issues. Broadcasters like entertainment formats
because they are perceived as low risk products in an economically unstable
media environment. These formats mainly come from large international pro-
ducers who know how to manage the perception of risk in a cultural industry.
They produce a finely tuned format that broadcasters and local producers can
see in action at a launch, usually in Britain or America, and subsequent roll out
to other regions and countries. The visible reduction of cultural and economic
risks through the successful launch of a format leads to increased trust in a small
group of international producers. The format is made to suit other production
cultures through minor alterations. This made to measure approach ensures
broadcasters buy a well-designed format that local producers can adjust with
few major problems. The relationship between the format producer and local
producer is explicitly handled through formal structures and systems, such as
the use of a bible and flying producers, and it is also implicitly handled through
knowledge of how a format works for local audiences. The combination of risk
management and flexible format production make Big Daddy companies like
Fremantle “key springers”, as Gary Carter put it, in the global entertainment race.
Conclusion
In the case of formats certainly size matters, but how and why reveals nuances
and complexities that are changing and merit better understanding. Ten to
fifteen years ago the size of a country was less important because good ideas
can come from anywhere. Yet as the format industry has grown into big busi-
ness, size has become paramount. The format industry has been successful in
some small, rich countries like the Netherlands and Sweden (Attentional 2009:
62). Although they have languages not widely spoken elsewhere, they have
managed to break into international markets. In 2008 in terms of exported
formats per million inhabitants, episodes exported per million of population,
and the amount of production costs generated per million of population, the
Netherlands and Sweden were reasonably successful on the global stage (Frapa
2009). Global presence, however, has only been maintained by consolidation
into larger transnational concerns, capable of rolling out programmes quickly
on an international stage. What is also noticeable is that in the main the larger
214
more expensive prime-time ‘shiny floor’ shows, which are more commercially
rewarding, tend to originate with transnational companies in larger countries
like the UK. Such countries have the resources to experiment with more costly
formats (TBI 2010b), and can extend that expertise to the all-important US
market as well (White 2010: 36-39). Size does matter in relation to companies
and the type of large-scale format they are promoting. The research reported
here demonstrates that although size may not have always mattered as much
in the past, it has become increasingly significant in the past ten years – and
should be expected to be at least as important in the years ahead.
In the end, small countries are limited by the smallness of their domestic
markets, the lack of sufficient resources to sustain more expensive entertainment
shows, and the cheapness of overseas products, including reality entertainment
formats, which serve as bankers for larger ‘superindies’. As small countries
they continue to be limited by a restricted range of producers, fewer viewers /
consumers, and less advertising or licence fee revenues; all of that even while
the costs of production remain high, whatever the size of the market. Even
for those few that break out internationally from small countries of origin, the
trends suggest that ultimately consolidation and integration within a globalised
marketplace will make them part of big country companies.
Acknowledgements
Our thanks goes to Ute Biernat, Chairman of Frapa, and Chief Executive Officer of Grundy
Light Entertainment Germany; Gary Carter, Chief Operating Officer, FremantleMedia and Chief
Creative Officer, FMX; Rob Clark, President of Worldwide Entertainment FremantleMedia,;
Julie Donovan Senior Vice President International Development at FremantleMedia; Colin
Jarvis, Director of International Format Production BBC Worldwide; Claes Leinstedt, Managing
Director of BLU, Sweden; Elin Thomas, VP of Format Sales for EMEA, BBC Worldwide; Vasha
Wallace, Senior Vice President Format Acquisitions Worldwide, FremantleMedia; Douglas
Wood, Head of Research FremantleMedia UK.
215
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Small Among Giants

• Media and Communication Research Findings in the Nordic Countries

• Trends and Developments in the Media Sectors in the Nordic Countries

• Research on Children, Youth and the Media Worldwide

Gregory Ferrell Lowe & Christian S. Nissen (eds.)

Gregory Ferrell Lowe & Christian S. Nissen (eds.)

© Editorial matters and selections, the editors; articles, individual

Cover by: TBA

Gregory Ferrell Lowe & Christian S. Nissen

Gregory Ferrell Lowe, Christian Edelvold Berg & Christian S. Nissen

Christian Edelvold Berg

Erik Nordahl Svendsen

Tom Moring & Sebastian Godenhjelm

Annette Hill & Jeanette Steemers

Author Biographies 217

Gregory Ferrell Lowe & Christian S. Nissen

In September 2007 the BBC rounded up an international group of ‘the usual

The Research Project

to have some continuous and fundamental influences on a country’s media

Overview of the book

Steininger. The chapter provides a good overview of The Socio-Cultural Context

Finlly, we want to express our appreciation to NORDICOM for publishing

Tampere, Finland and Copenhagen, Denmark, December 2010

Gregory Ferrell Lowe Christian S. Nissen

Gregory Ferrell Lowe, Christian Edelvold Berg

Small countries as a specialised area of study

Hybrids and intervention

or regions integrated in an overarching consensus. Social corporatism seeks

One consequence when applied to media markets, especially TV broadcasting,

examples, despite their respective assessments of different scales of analysis

Grappling with similarities and distinctions in broadcasting

Systemic, contextual, unique, commodified and variable

Degrees of Vulnerability and Dependency

economies. State intervention via regulation of media markets is justified on

How to understand ‘content’

a minority audience in a specific language and cultural setting, whether a mi-

Smaller countries in shared-language areas thus face unique challenges due to

Clarifying the variables

consumer expenditures. The general economic conditions of a country,

of channels, programmes and formats – media markets are no longer

Why and how size matters in television broadcasting

Table 1. Comparing bigger and smaller countries

Bigger country Potential effect of size Smaller country

Trade High Degree of self-sufficiency Low

Weight in international policy Low

Capacity to influence or Lower

Potential to benefit from eco- Lower

Degree of diversity due to Lower

Potential for provisioning Lower

means smaller country markets typically feature higher proportions of imported

Some micro countries < 0,2 mio.

Vatican 0,001 Liechtenstein 0,033 Ile of Man 0,08

Some smaller countries > 0,3 < 20 mio.

Iceland 0,3 Lithuania 3,4 Switzerland 7,4

Some larger countries > 20 mio.

Australia 21,3 Ukraine 47,4 Germany 82,6

Measures of country size

Worldwide, countries range in population size from 783 in Vatican City to

Implications of economic characteristics

An exploration of size and broadcasting

Coefficient (OLS) 47,356 * 0,002 *