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Monday, 17 October 2016

WE NEED TO TALK ABOUT GREEK TV LICENCING

[Attention! Work in progress]

Why are we talking about this at all?

This all started in February - when the Greek government, citing a then-unpublished study by the European University Institute of Florence, prepared a Bill for MPs to debate that would cap the number of Greek broadcasting licences at four. Despite not having read the Florence Institute Report (as it is now widely known), the coalition's MPs duly voted the measures through. Fast-forward to September, when the Government awarded these four licences in a bizarre auction/show trial process in which would-be oligarchs were forced to camp alongside government officials for three days - no doubt to the satisfaction of many Greeks. The shake-down was trumpeted by the Greek government as a resounding success - the Florence study had suggested a reserve price between EUR0.5m and EUR3.5m; the Government set a starting price of EUR5m; the highest bidder ended up paying 75.9m. In total, the Greek government raised EUR246m. By the time of the auction, six of the eight outbid broadcasters, facing forced closure, were already on the case, having taken the matter to Greece's constitutional court - the Council of State.

A tumultuous interval followed, in which the Government and its proxies made what seemed to be efforts to by turns blackmail and bribe judges. The Council of State's president adjurned one plenary citing political interference, his decision prompting two of its vice-presidents to resign from the Union of Judges and Prosecutors in protest. Eventually the Council of State found that the licencing law was unconstitutional - a split (14 to 11) decision to the effect that the licencing of broadcasters is not within the gift of Government but that of the National Council for Radio and Television. This cannot have come as a shock to the Greek Government. After all, they took a gamble precisely in order to circumvent the NCRT, whose leadership must be determined by cross-party consensus. Opposition parties could and did effectively block any appointments, and thereby the licencing process itself.

In any case the CoS's ruling unravelled a key plank of the Greek government's policy - and one of the few it had full control over - but also forced them to return the funds already committed by the winning bidders, which had already been pledged many times over to pet projects. This humiliation was hardly the first in the licencing saga - one of the top bidders had by that time had to withdraw their bid as their financial means statement turned out to be bogus - but it was the worst. Almost immediately, the Greek government and sympathetic journalists denounced the Council of State's decision as an attempted coup that would force children to go hungry, and launched into a bizarre discussion of whether the judiciary should have the power to rule a 'just' law unconstitutional at all.

Was Greek TV really that bad?

In short, yes. It was never actually very good. The Greek media landscape came to life as the plaything of dictators, and to this day our Constitution continues to stipulate, chillingly, that "Radio and television shall be under the immediate control of the State." Following a near-decade of Borat-style ignominy for Greek State television, (between 1981-9, ERT had thirteen chairmen and DGs, and sixteen news-directors with an average term of about eight months), Greece embarked on an ill-fated deregulation of  television broadcasting in 1989, with the government auctioning four regional TV licences. Upon deregulation, and with a few considerable exceptions, the sector exploded into an orgy of unimaginative programming and re-runs. TV stations proliferated, and even the biggest remained persistently unprofitable, and dependent, as were newspapers and radio stations before them, on a mix of 'either considerable yearly subsidies or soft state-bank loans or on the wealth of their owners.' In international comparisons, news pieces on Greek TV stations were much less likely than those in other countries to feature third-party expert opinions, and Greek TV channels were much less likely to offer science programmes.

So Greek TV was poor, and the people knew it. The Eurobarometer surveys, for example, reveal that only one in five Greeks tend to trust TV channels and on last count (Nov 2015), ours was the worst reading in Europe, with France, Spain, Cyprus and Slovenia following at a safe distance. This follows a steady loss of faith in television that started as far back as 2003, and a divergence between trust in television and trust in the press from late 2004 onwards. Interestingly, trust in the press has recovered slightly during the crisis, while trust in television  kept drifting. Meanwhile, anyone with an internet connection flocked to online portals, blogs and social media for not only their news but also the satisfaction of pushing back against the news agenda.

The Greek media aren't just increasingly mistrusted at the grassroots level, they are also rated increasingly poorly by a small, incestuous circle of experts in the field. Reporters without Borders ranks Greece 89th of 179 in its press freedom index for 2016 (with a score of 31.01, where 0 is the best possible and 100 is the worst possible; this is rated as 'problematic' under their methodology). Our ranking is up from 94th of 179 in 2014 but down dramatically from 18th of 160 in 2005, weighed down not just by falling pluralism but also by increased use of actual violence against reporters. The latter has come from vested interests, angry crowds, criminals, but also very often from their own employers and co-workers (see eg here).

At the other end of the political spectrum, Freedom House ranks Greece 94th of 199 countries with a score of 48 where 0 is the best possible and 100 is the worst possible (methodology here). This puts Greece in the 'partly free' category, ranking as one of the worst countries in Europe for press freedom. Interestingly, in Freedom house's ranking it is the weakness of the legal environment that weighs Greece down the most. Here too Greece's ranking has fallen dramatically since 2011, by 18 places.  

The EU-funded Media Pluralism Monitor* found a medium/high risk to medial pluralism in Greece in 2014 and also highlighted the legal framework as our biggest problem. However Greece did not participate in the Monitor in 2015 and the 2016 assessment is not out yet.

If the Greek people don't trust TV news anyway, why is it such a big deal?

Apparently the experience of watching news on the TV is a more passive one than, say, that of reading a newspaper or browsing the internet. Old people, the theory goes, are a particularly vulnerable, captive TV audience. My analysis of DiaNEOsis's surveys of 2015 suggests, for example, that right-wing women and older people do indeed trust the media more. And even those who don't trust the actual information, the theory goes, may still be susceptible to scaremongering through the TV as it bypasses their critical faculties. Stay tuned as I discuss this further.

Were Greek TV stations financially viable?

Depending on their audience the Greek government flits from one faux-technocratic excuse for its approach to TV licencing to another; the viability of TV stations is only one such. That's not to say this isn't important. The Greek government may be arguing in bad faith but its argument is still sound. A chronically unviable large TV channel is likely to be surviving on a cross-subsidy from corruption-tinged public works money and is likely to be leveraged to push more such prizes in its proprietors' way. Alternatively, it might be a zombie relying on endless loan rollovers which, in an economy such as Greece's, is only made possible by capital injections courtesy of the taxpayer. Or it might be both. And banks themselves have a media agenda which indebted press outlets might feel obliged to serve. We know, for instance that research has found a tentantive link between pro-bank newspaper bias and debt in Italy.

It's easy to see what happened to broadcasters' finances by looking at Eurostat's detailed enterprise data for the sector. Pre-crisis, the entire sector made some EUR1.2bn in turnover and employed 9,000 people (a number still used by the sector to lobby government in 2015). By 2014, and despite a tiny recovery from 2013 onwards, it was turning over barely one sixth of its pre-crisis figures and employing just over a quarter of what it once had. You can see the details of all major media restructurings in Greece here. There is still, in theory, some money to be made in the sector - the EUR246m oligarchs paid for licences provided them with access to just EUR41m worth of operating surplus in the short term. This is down, however, from EUR269 in 2008 and could, in theory, return to higher levels. A set of TV channels starting from scratch could, in theory, make money. But the existing channels were labouring under enormous debts - Mega alone owed EUR116m earlier this year.



Most of the fall in revenues happened between 2010 and 2012 and was driven by food, drinks and tobacco ad budgets being cut. The top ten advertising sectors* and their approximate advertising spend can be seen below (see links below for sources). It takes a long time for this detailed information to be released so the 2012 figures are genuinely the most recent ones.

201220112010
Manufacture of food products, beverages and tobacco 484682837
Manufacture of chemicals and chemical products356367
Manufacture of basic pharmaceutical products and pharmaceutical preparations334360
Wholesale trade, except of motor vehicles and motorcycles5481124
Retail trade, except of motor vehicles and motorcycles475486
Warehousing and support activities for transportation86100173
Telecommunications365371
Public administration, defence, compulsory social security495267
Creative, cultural and entertainment activities9096103
Activities of membership organisations657975

* a statistical mystery: for reasons I cannot fathom, both Eurostat's I/O tables for the Greek economy (latest edition 2010) and Elstat's tables for 2010 to 2012 record zero spending by financial services firms on advertising and market research. I find this very unlikely.

TO BE CONTINUED