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Policy Report
European Union Competencies in
Respect of Media Pluralism & Media
Freedom
Summer School for Journalists and Media Practitioners 2013
Freedom and Pluralism of traditional and new
media
Policy Report
European Union competencies in respect of media pluralism and media freedom
The report presents the phenomena of media freedom and pluralism, and in
particular:
 The importance of media freedom and pluralism for the democratic
regime
 Perspective on the measuring and evaluating of media pluralism.
 Analyses major aspects of media economics and ownership of media
players
 Examines the development of the debate on legal instruments and
jurisprudence
 Aims to suggest how the legislation in force could be used
Social and Political Aspects of Media
Pluralism and Media Freedom
Alina Dobreva
From Aristotle…
Communication and Democracy
…to McLuhan
Normative expectations of media
How to do it?
 Facilitates the flow of information about public
events to citizens
 Exposes politicians and governments to public
scrutiny
 Leads to better social orientation and therefore,
informed political choice
 Urges people to participate in the political process
 Leads to exposure to and exchange of different
views (increased political knowledge, understanding,
and tolerance)
Legitimate democracy
Definition of media freedom & pluralism
 Independence from government,
authorities’ control & intervention;
no governmental monopoly on
information
 framed within the media-
government relations
Media
pluralism
Media
freedom
 Independence from disproportionate
private control and influence of
1/few economic, social and/or
political power(s)
 based upon the tolerance and
inclusiveness in politics and society
precondition
s
Normative functions of media freedom &pluralism
Opportunity
(1) to provide a platform for
self-expression …
(2) to provide citizens with
access to information (not to
‘truth’)…
(3) to foster agonistic public
debate and deliberation …
(Czepek; McConnell & Becker)
Outcome for all groups
… reflecting the plurality of voices
without misrepresentation
… by various, easily accessible
sources, presenting wide variety of
viewpoints
… between all groups in a society
Media freedom Media pluralism
Media freedom
“Owner” of the freedom: ordinary citizens, journalists or editors/media
owners?
 Current de-professionalisation of journalists – tbd
 Freedom at the level of media source or freedom at the level of the individual
journalist – depending on the particular media system and its emphasis on
internal/external pluralism
Emphasis on violations versus proactive overall view
 Minimal definitions of democracy
 Focus on the presence or absence of
certain indicative problems, e.g., the
killing of journalists
 Social, political context &facilitating
legislation
 Focus on overall performance, higher
standards of democratic functioning
Media pluralism
 Variety, diversity and the plurality of media supply, free, independent and
autonomous media:
Ownership, media outlets, sources of information and range of contents, guaranteed by
market rules and regulations
Political and economic independence
 Public sphere, general public and/or audience
Actual consumption cannot be regulated, but easy access to pluralistic information should be
guaranteed
Led by factors beyond commercial viability and profitability
Results in access and choice of opinions & representations, which reflect the citizens of the
state in question; The result however, depends on social and political factors beyond media
as well
Measuring Media Pluralism across
Social & Political Contexts
Andrea Calderaro
Measuring Media Pluralism
• International Institutions (CoE, 2008 & UNESCO 2007)
• Non Governmental Organizations (Ofcom 2012)
• Academic Research (Valcke et al. 2009)
There is no agreement about how to measure
Media Pluralism
Challenges
• Identifying the indicators:
media-ownership concentration, media market competition,
content diversity, freedom of journalists
• Framing a comparative research design
• Selection a research strategies:
Quantitative/Qualitative methodologies
Comparing
- to explore the unequal behaviour of our observed
phenomenon
- to identify national peculiarities
- as a component of a larger transnational system
Standardizing
Benefits
• Focusing on the same national indicators
• Standardize research tools
• Collection of neutral empirical data
• Which can easily understood in different contexts
Vs Contextualizing
Quantitative Vs Qualitative
Independent Study on Indicators for Media
Pluralism in the Member States – Toward a Risk-
Based Report
Valcke, KU Leuven - 2009
3 level of analysis
• Legal Indicators
• Socio-Demographic Indicators
• Economic Indicators
Quantitative Approach
Criticism
• The lens that we use to observe and collect data in one
context, does not imply that is is equal valid in an other
contexts
(Adcock & Collier, 2001)
• By pursuing a neutral data, we risk to lose information
which is essential to understand the national context
(Peschar 1984)
Qualitative methodologies
• Ethnographic approaches
• Interviews
• Observatory participation
Produce explanation,
instead of dry pictures of facts
Standardizing Vs Contextualizing
Quantitatve Vs Qualitative
Concluding
Benefits
More powerful tool to develop a
deep knowledge of local
contexts, in order to understand
local Media Pluralism
Limits
It makes a transnational
comparison more difficult
Benefits
It generates neutral and easily
comparable data
Limits
It risks to loose information on
national peculiarities, which
might be the goal of the research
Standardization/Quantitative Contextualizing/Qualitative
Economic aspects of media
pluralism and media freedom in the
European Union
Giovanni Gangemi
 With few contestants, prices can grow up, thus narrowing the
access of new entrants (e.g. the TV sports rights)
 Dominant firms can keep the prices low (predatory prices),
making the market not profitable for potential entrants,
especially because of the high initial costs
 For press media marginal costs are low, as additional cost is
related to just a part of the product (paper, distribution…)
 For broadcasting media the marginal cost is zero, as any new
viewer/listener does not have any additional cost.
 On the internet, though, more viewers/listeners mean more
bandwidth, and more costs
Entry
barriers
High initial
costs
Low marginal
costs
Economies
of scale
Media markets tend to concentration
Media markets tend to concentration
 Due to high initial costs and to economies of scale, big
media firms tend to expand vertically.
 In the media markets, vertical integration is a strategic
issue as a firm could control both content production
and content delivery levels.
 Low marginal costs and consequent economies of scale
make more profitable for a media firm to expand
horizontally.
 Fragmentation increases this tendency, because the same
product will be available on a cross-media base in order to
match the audience, as the latter is more and more spread
on different means of communication. (Doyle, 2002)
Vertical
integration
Horizontal
integration
New context and the technological change
 On the one hand it lowers entry barriers, reducing dominance, with
positive effects on market plurality
 On the other hand it contributes to fragment the audience,
dispersing consumers and thus making the market less attractive
for new entrants.
 Aggregated consumers have stronger bargaining power, because
they constitute an attractive group and so stimulate tighter
competition (in particular when customer are well informed)
 If consumers are homogeneous and aggregated they attract
possible new entrants (and this reduces the incumbent market
power)
 If consumers are dispersed, fixed costs make entrance into the
market unattractive (the entrant will probably deal only with a
small proportion of consumers)
 Audience fragmentation in media markets could discourage the
access of new entrants
Lowering of
barriers to entry
Long tail
effect
Audience
fragmentation
Products
customization
Media concentration and ownership debate
 While the number of channels increased dramatically, the ownership of those
channels has narrowed to an even smaller few (Lessig, 2004),
 it is easier to speak, but harder to be heard (Einstein, 2004),
 five global dimension firms won most of the newspapers, magazines, book
publishers, motion picture studios and radio and television station in the United
States (Bagdikian, 2004),
 more does not necessarily mean different (Murdock, 1982),
 while there is indubitably greater “numercial diversity”, we are seeing a greater
concentration at the level of “source diversity” (Winseck, 2008).
 Media ownership is increasingly concentrated (Castells, Arsenault 2008)
 There are fewer and larger companies controlling more and more (McChesney)
 the media sky has never been brighter (Thierer 2005),
 more competition than ever (Compaine, 2000)
Pessimists
Optimists
Is concentration increasing or decreasing in the online media environment?
Dynamic of media concentration
Noam
u-shape effect
If barriers to entry increase and economies of scale decline, in
a first moment there is more concentration with less contestants, but
then, due to scale economies, there will be more players.
If barriers to entry drop, but economies of scale increase, then
in a first moment there will be more contestant, attracted by low
barriers to entry, but then competition will increase and contestants
will decrease
The lowering of distribution costs lead firms to allocate more
resources on the first copy of the product, to keep the same profit.
The increase of the costs of the first copy creates higher barriers to
entry and thus could lead to a reduction of diversity
Baker
Old and new concerns on media pluralism
As internet develops, traditional media move to the online, and online media
conglomerates boost their profits, notwithstanding the crisis. Though, all this is rising
a new patterns of concerns about pluralism and diversity:
 There is an unclear definition of relevant markets: what should be measured and
how?
 It is difficult to assess competition between offline and online media (level
playing field).
 Successful online information and content providers are not new but are mainly
traditional media outlets moving online (BBC, CNN, FOX…)
 New content providers are smaller and find hard to compete with traditional
players.
 Successful players are mainly intermediaries and aggregators, with low/no
investments in new contents.
Tendency to concentration in the online media markets
An further question is the increasing tendency to market concentration in new media
(search engines, social networks…): the winner takes all.
Some examples of concentration in the online media markets are
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
2007 2008 2009 2010 2011
Facebook
MySpace
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
2004 2005 2006 2007 2008 2009 2010 2011
Yahoo!
Google
Google and Yahoo! revenues 2004-2012 Facebook and MySpace 2007-2012
Source: eMarketer and data provided by operators.Source: Netmarketshare.
Note: figures include only revenues coming from audiovisual
Geographical market
A final concern is about the geographical origin of new players and the role of EU
industry.
 The balance of trade between US and Europe has mainly taken one direction,
due to internal market size, linguistic and cultural factors, general economic wealth
 New operators emerging from the internet economy are almost exclusively
coming from the US.
 Europe struggles to establish new players able to compete worldwide.
 The challenge is between local-based and well-established media firms and
international globalised organisations, mainly based in the US, operating as
content aggregators.
 Traditional instruments such as quotas or public funding to protect local
industries risk to be ineffective in the online media environment
The gap between US and EU audiovisual industry increases
EU industry has been deeply affected by the economic crisis, while US firms keep on
growing in the globalised economy. EU audiovisual firms revenues are flat, while US and
Japan companies increased their turnovers. This happens despite public funding (license
fee, grants, etc.).
0
50.000
100.000
150.000
200.000
250.000
2006 2007 2008 2009 2010
US
EU
JP
BR
MX
+4.8%
+0.5%
+7.8% Source: European Audiovisual Observatory,
Yearbook 2011.
Note: figures include only revenues coming from
audiovisual activities. They include results from the
50 leading audiovisual worldwide companies
Total revenues of the audiovisual industry 2006-2010
Million€
CAGR
CAGR
CAGR
Conclusion
 A greater diversity on the supply side could not correspond to a greater
diversity on the demand side, and could not lead automatically to more
pluralism.
 There is a need for a clearer definition of relevant markets to better
address both pluralism and market competition on media.
 An excessive fragmentation in the EU media markets and the lack of a
unified market risk to make European media outlets too vulnerable in the
globalised economy.
 It must be understood whether current tools to protect European
industry are still effective or not.
Media Pluralism and Freedom: Legal
Instruments for EU Intervention
Elda Brogi & Paula Gori
June 2012. As Vice-President N.Kroes affirmed: “Currently the
EU does not have the legal competence to act in this area [media
pluralism] as part of its normal business. In practice, our role [of the
EC] involves naming and shaming countries ad hoc, as issues arise.”
A legal overview
- the Treaties do not confer an explicit competence to the EU on “media pluralism and
media freedom”
- but the EU has not been “neutral” on the issue of media pluralism and media
freedom
- -subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if
and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member
States…
- the debate on EU competencies with regard to media pluralism and media freedom is
a long debate which is still on-going
- Media Monitor
- CMPF, HLG and Media Future Forum
in broadcasting regulation
1974. Sacchi Case: “…a television signal must, by its nature, be regarded as provision of services”
1989. Television Without Frontiers Directive (TWFD): First harmonisation instrument for
the free movement of TV services. It establishes the country of origin principle and refers
only to traditional linear broadcasting services.
It sets some minimum standards like the protection of minors and public order, consumer
protection, the promotion of European works, the right of reply.
The debate on the TVWF Directive
1999. Communication on the Future of European Regulatory Audiovisual Policy:
“…regulatory policy in the sector is aimed at safeguarding certain public interests, such as cultural and
linguistic diversity, the protection of minors and consumer protection…”
2005. Liverpool Conference : media pluralism still is responsibility of MS
The AVMS Directive
Technological developments - Same legal basis as for the TWFD, namely the free movement of services
- Linear services: Programmes provided by a media service provider at a scheduled time and watched
simultaneously by viewers
- Non-linear services: Programmes users select from a catalogue offered by the media service provider,
to watch at their own convenience.
However: the Directive does not define a general set of rules for the convergent services and excludes
the non broadcasting-like services that do not fall in the definition of industrially run mass media (Recital
22)
All media services have to respect a basic tier of obligations in some specific areas: identification of
media services providers, prohibition of incitement to hatred; accessibility for people with disabilities;
qualitative requirements for commercial communications; sponsoring and product placement.
However: two – tier system: stricter regulation for linear services
Recital 5 “Audiovisual media services are as much cultural services as they are economic
services. Their growing importance for societies, democracy — in particular by ensuring
freedom of information, diversity of opinion and media pluralism — education and
culture justifies the application of specific rules to these services”
Recital 10: “…Bearing in mind the importance of a level playing-field and a true
European market for audiovisual media services, the basic principles of the internal
market, such as free competition and equal treatment, should be respected in order to ensure
transparency and predictability in markets for audiovisual media services and to achieve low
barriers to entry.”
Recital 12: “…that regulatory policy in that sector has to safeguard certain public interests,
such as cultural diversity, the right to information, media pluralism, the protection of
minors and consumer protection, and to enhance public awareness and media literacy, now
and in the future.”
Public service broadcasting/media
Instrument to safeguard media pluralism and freedom – 2000
Communication of the EC on Services of General Interest in Europe
“…the broadcasting sector has, since its inception, been subject to specific regulation in
the general interest. This regulation is based on common values such as freedom of
expression and the right to reply, pluralism, protection of copyright, promotion of
cultural and linguistic diversity, protection of minors and of human dignity, consumer
protection…”
PSB is seen as an instrument to ensure the coverage of a number of areas and the
satisfaction of needs that private operators would not necessarily fulfill to the optimal
extent. (COM 2001/C 320/04)
…
As a service of general interest it is covered by Article 106(2) TFEU as
interpreted according to the Amsterdam Protocol on Public Service
Broadcasting (1997): “… the provisions of the Treaty establishing the European
Community shall be without prejudice to the competence of Member States to provide
for the funding of public service broadcasters insofar as such funding is granted to
broadcasting organisations for the fulfilment of the public service remit as conferred,
defined and organised by MS, and insofar such funding does not affect trading
conditions and competition in the Community to an extent which would be contrary to
the common interest, while the realisation of that public service shall be taken into
account”.
two principal EC Communications (2001/C320/04 and 2009/C 257/01):
set of guidelines and rules followed by the EC when it comes to decide
state-aid cases in the PSBs domain.
Fundamental rights. Article 11 of the Charter
• (1) Everyone has the right to freedom of expression. This right shall
include freedom to hold opinions and to receive and impart information
and ideas without interference by public authority and regardless of
frontiers.
• (2) The freedom and pluralism of the media shall be respected.
Other legislation
 Electronic commerce
 Electronic communications
 Information society services
What we say in the report
- media pluralism is a principle that can operate and be
implemented at various levels in the EU order
- a list of potential instruments
Article 11 of the Charter and article 10 of the ECHR: Media
pluralism as a general principle of the EU order (1)
- Article 11, Paragraph 2 Charter explicitly states that: “The freedom and pluralism
of the media shall be respected”.
- art. 6 TEU says the Charter has same legal value as the Treaties
- the provisions of the Charter are not to extend the competences of the
Union as defined in the Treaties
- the Charter is addressed both to the EU institutions, bodies, offices,
agencies, with due regard to the subsidiarity principle, and to the Member
States when they are implementing EU law (art. 51)
Article 11 of the Charter and article 10 of the ECHR: Media
pluralism as a general principle of THE EU order (2)
Article 52 (3) of the Charter affirms that:
“In so far as this Charter contains rights which correspond to
rights guaranteed by the Convention for the Protection of
Human Rights and Fundamental Freedoms, the meaning and
scope of those rights shall be the same as those laid down by the
said Convention. This provision shall not prevent Union law
providing more extensive protection.”
Article 11 of the Charter and article 10 of the ECHR:
Media pluralism as a general principle of the EU order (3)
- Another bill of rights acknowledged by Article 6 TEU is the
Convention for the Protection of Human Rights: “The Union shall
accede to the European Convention for the Protection of Human Rights and
Fundamental Freedoms.”
- Fundamental rights, as guaranteed by the ECHR and as they
result from the constitutional traditions common to the Member
States, are to constitute general principles of the law of the
European Union
Article 11 of the Charter and article 10 of the ECHR: Media
pluralism as a general principle of THE EU order (4)
- Charter, ECHR and constitutional traditions of MS form a normative
corpus that has already had, and will potentially have, a role in the
interpretation and application of European law.
- The two European Courts, the European Court of Justice of the
European Union and the European Court for Human Rights, for
instance, can play an important role in the definition and in the
application of common European principles starting at “case level”.
Competition and cultural aspects: Article 167.4 TFEU
- article 167.4 TFEU pluralism-specific considerations in competition
analysis.
The Commission must take cultural aspects into account in the framework
of the Union’s competition policy. Articles 11(2) and 51(1) of the Charter of
Fundamental Rights establish the Commission’s responsibility to respect and
promote pluralism. On the basis of these provisions, European competition
law needs to be applied in the spirit of the overall objectives pursued by the
Treaties.
Pluralism and internal market harmonization
Article 26 TFEU – internal market
Article 114 TFEU – internal market harmonization
- The European Parliament and the Council shall ... adopt the measures
for the approximation of the provisions laid down by law, regulation or
administrative action in Member States which have as their object the
establishment and functioning of the internal market
- The European Union can exercise its competences whenever the
proper functioning of the internal market is negatively influenced by the
existence and application of diverging national provisions in any sector
which is not expressly excluded from the founding Treaties
ownership; ownership transparency; libel; copyright... national legislation
-All these differences can hamper the functioning of the internal market: their
existence may be detrimental to the free movement of services or the right of
establishment, since operators may find it difficult to establish or to provide services
in another Member State, for instance, where dominant positions are in place (see
European Citizen initiative)
Pluralism and internal market harmonization
The implementation of AVMS and the role of NRAs (1)
- AVMSD does not foresee the establishment of relevant
independent National Regulatory Authorities (NRAs)
- comparison with the Electronic Communications
Regulatory Framework, which regulates issues which are
closely related to those in the AVMS Directive: all relevant
national regulatory authorities are requested to comply
with independence requirements.
The implementation of the AVMS Directive & the role of NRAs
- The AVMS Directive does not introduce any specific obligation
for the Member States nor does it provide any element about the
structure, functioning or role of those national bodies or about the
relationship among them.
- in an era of convergence, it could be reasonable to consider the
establishment of the same institutional requirements both for
electronic communications and AVMS (common standards on
definition and treatment of similar cases; definition of new media
markets).
New principles in the Treaties
“It is forbidden to create or maintain a dominant position in
media markets”
“Governments and economic forces cannot exercise any
undue influence on media undertakings”.
This general precept would be gradually defined by the case law of the CJEU, that would
indicate which behaviours could be considered acceptable and which not.
The European Agency on Human Rights (or another
qualified body) soft law standard-setting & monitoring
- another potential European level of intervention on pluralism could be
through the Fundamental Rights Agency (FRA)
- another qualified body, which should be mandated to monitor Member
States and propose common standards, basing its work on the ample case
law of the the European Court of Human Rights and the European
Convention.
Conclusions
- EU competences with regard to media pluralism appear scattered in the
European legal landscape.
- the European Union has few hard and soft law instruments to promote and
assure media pluralism and freedom in Europe
- the implementation of common principles is feasible at legislative, judiciary,
administrative level
- given the paramount importance of the democratic principles to be
promoted, greater clarity and certainty is needed with regard to EU
competences
Thanks !

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CMPF Policy Report Presentation

  • 1. Policy Report European Union Competencies in Respect of Media Pluralism & Media Freedom Summer School for Journalists and Media Practitioners 2013 Freedom and Pluralism of traditional and new media
  • 2. Policy Report European Union competencies in respect of media pluralism and media freedom The report presents the phenomena of media freedom and pluralism, and in particular:  The importance of media freedom and pluralism for the democratic regime  Perspective on the measuring and evaluating of media pluralism.  Analyses major aspects of media economics and ownership of media players  Examines the development of the debate on legal instruments and jurisprudence  Aims to suggest how the legislation in force could be used
  • 3. Social and Political Aspects of Media Pluralism and Media Freedom Alina Dobreva
  • 4. From Aristotle… Communication and Democracy …to McLuhan
  • 5. Normative expectations of media How to do it?  Facilitates the flow of information about public events to citizens  Exposes politicians and governments to public scrutiny  Leads to better social orientation and therefore, informed political choice  Urges people to participate in the political process  Leads to exposure to and exchange of different views (increased political knowledge, understanding, and tolerance) Legitimate democracy
  • 6. Definition of media freedom & pluralism  Independence from government, authorities’ control & intervention; no governmental monopoly on information  framed within the media- government relations Media pluralism Media freedom  Independence from disproportionate private control and influence of 1/few economic, social and/or political power(s)  based upon the tolerance and inclusiveness in politics and society precondition s
  • 7. Normative functions of media freedom &pluralism Opportunity (1) to provide a platform for self-expression … (2) to provide citizens with access to information (not to ‘truth’)… (3) to foster agonistic public debate and deliberation … (Czepek; McConnell & Becker) Outcome for all groups … reflecting the plurality of voices without misrepresentation … by various, easily accessible sources, presenting wide variety of viewpoints … between all groups in a society Media freedom Media pluralism
  • 8. Media freedom “Owner” of the freedom: ordinary citizens, journalists or editors/media owners?  Current de-professionalisation of journalists – tbd  Freedom at the level of media source or freedom at the level of the individual journalist – depending on the particular media system and its emphasis on internal/external pluralism Emphasis on violations versus proactive overall view  Minimal definitions of democracy  Focus on the presence or absence of certain indicative problems, e.g., the killing of journalists  Social, political context &facilitating legislation  Focus on overall performance, higher standards of democratic functioning
  • 9. Media pluralism  Variety, diversity and the plurality of media supply, free, independent and autonomous media: Ownership, media outlets, sources of information and range of contents, guaranteed by market rules and regulations Political and economic independence  Public sphere, general public and/or audience Actual consumption cannot be regulated, but easy access to pluralistic information should be guaranteed Led by factors beyond commercial viability and profitability Results in access and choice of opinions & representations, which reflect the citizens of the state in question; The result however, depends on social and political factors beyond media as well
  • 10. Measuring Media Pluralism across Social & Political Contexts Andrea Calderaro
  • 11. Measuring Media Pluralism • International Institutions (CoE, 2008 & UNESCO 2007) • Non Governmental Organizations (Ofcom 2012) • Academic Research (Valcke et al. 2009) There is no agreement about how to measure Media Pluralism
  • 12. Challenges • Identifying the indicators: media-ownership concentration, media market competition, content diversity, freedom of journalists • Framing a comparative research design • Selection a research strategies: Quantitative/Qualitative methodologies
  • 13. Comparing - to explore the unequal behaviour of our observed phenomenon - to identify national peculiarities - as a component of a larger transnational system
  • 14. Standardizing Benefits • Focusing on the same national indicators • Standardize research tools • Collection of neutral empirical data • Which can easily understood in different contexts Vs Contextualizing Quantitative Vs Qualitative
  • 15. Independent Study on Indicators for Media Pluralism in the Member States – Toward a Risk- Based Report Valcke, KU Leuven - 2009 3 level of analysis • Legal Indicators • Socio-Demographic Indicators • Economic Indicators
  • 16. Quantitative Approach Criticism • The lens that we use to observe and collect data in one context, does not imply that is is equal valid in an other contexts (Adcock & Collier, 2001) • By pursuing a neutral data, we risk to lose information which is essential to understand the national context (Peschar 1984)
  • 17. Qualitative methodologies • Ethnographic approaches • Interviews • Observatory participation Produce explanation, instead of dry pictures of facts Standardizing Vs Contextualizing Quantitatve Vs Qualitative
  • 18. Concluding Benefits More powerful tool to develop a deep knowledge of local contexts, in order to understand local Media Pluralism Limits It makes a transnational comparison more difficult Benefits It generates neutral and easily comparable data Limits It risks to loose information on national peculiarities, which might be the goal of the research Standardization/Quantitative Contextualizing/Qualitative
  • 19. Economic aspects of media pluralism and media freedom in the European Union Giovanni Gangemi
  • 20.  With few contestants, prices can grow up, thus narrowing the access of new entrants (e.g. the TV sports rights)  Dominant firms can keep the prices low (predatory prices), making the market not profitable for potential entrants, especially because of the high initial costs  For press media marginal costs are low, as additional cost is related to just a part of the product (paper, distribution…)  For broadcasting media the marginal cost is zero, as any new viewer/listener does not have any additional cost.  On the internet, though, more viewers/listeners mean more bandwidth, and more costs Entry barriers High initial costs Low marginal costs Economies of scale Media markets tend to concentration
  • 21. Media markets tend to concentration  Due to high initial costs and to economies of scale, big media firms tend to expand vertically.  In the media markets, vertical integration is a strategic issue as a firm could control both content production and content delivery levels.  Low marginal costs and consequent economies of scale make more profitable for a media firm to expand horizontally.  Fragmentation increases this tendency, because the same product will be available on a cross-media base in order to match the audience, as the latter is more and more spread on different means of communication. (Doyle, 2002) Vertical integration Horizontal integration
  • 22. New context and the technological change  On the one hand it lowers entry barriers, reducing dominance, with positive effects on market plurality  On the other hand it contributes to fragment the audience, dispersing consumers and thus making the market less attractive for new entrants.  Aggregated consumers have stronger bargaining power, because they constitute an attractive group and so stimulate tighter competition (in particular when customer are well informed)  If consumers are homogeneous and aggregated they attract possible new entrants (and this reduces the incumbent market power)  If consumers are dispersed, fixed costs make entrance into the market unattractive (the entrant will probably deal only with a small proportion of consumers)  Audience fragmentation in media markets could discourage the access of new entrants Lowering of barriers to entry Long tail effect Audience fragmentation Products customization
  • 23. Media concentration and ownership debate  While the number of channels increased dramatically, the ownership of those channels has narrowed to an even smaller few (Lessig, 2004),  it is easier to speak, but harder to be heard (Einstein, 2004),  five global dimension firms won most of the newspapers, magazines, book publishers, motion picture studios and radio and television station in the United States (Bagdikian, 2004),  more does not necessarily mean different (Murdock, 1982),  while there is indubitably greater “numercial diversity”, we are seeing a greater concentration at the level of “source diversity” (Winseck, 2008).  Media ownership is increasingly concentrated (Castells, Arsenault 2008)  There are fewer and larger companies controlling more and more (McChesney)  the media sky has never been brighter (Thierer 2005),  more competition than ever (Compaine, 2000) Pessimists Optimists Is concentration increasing or decreasing in the online media environment?
  • 24. Dynamic of media concentration Noam u-shape effect If barriers to entry increase and economies of scale decline, in a first moment there is more concentration with less contestants, but then, due to scale economies, there will be more players. If barriers to entry drop, but economies of scale increase, then in a first moment there will be more contestant, attracted by low barriers to entry, but then competition will increase and contestants will decrease The lowering of distribution costs lead firms to allocate more resources on the first copy of the product, to keep the same profit. The increase of the costs of the first copy creates higher barriers to entry and thus could lead to a reduction of diversity Baker
  • 25. Old and new concerns on media pluralism As internet develops, traditional media move to the online, and online media conglomerates boost their profits, notwithstanding the crisis. Though, all this is rising a new patterns of concerns about pluralism and diversity:  There is an unclear definition of relevant markets: what should be measured and how?  It is difficult to assess competition between offline and online media (level playing field).  Successful online information and content providers are not new but are mainly traditional media outlets moving online (BBC, CNN, FOX…)  New content providers are smaller and find hard to compete with traditional players.  Successful players are mainly intermediaries and aggregators, with low/no investments in new contents.
  • 26. Tendency to concentration in the online media markets An further question is the increasing tendency to market concentration in new media (search engines, social networks…): the winner takes all. Some examples of concentration in the online media markets are 0 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 2007 2008 2009 2010 2011 Facebook MySpace 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 2004 2005 2006 2007 2008 2009 2010 2011 Yahoo! Google Google and Yahoo! revenues 2004-2012 Facebook and MySpace 2007-2012 Source: eMarketer and data provided by operators.Source: Netmarketshare. Note: figures include only revenues coming from audiovisual
  • 27. Geographical market A final concern is about the geographical origin of new players and the role of EU industry.  The balance of trade between US and Europe has mainly taken one direction, due to internal market size, linguistic and cultural factors, general economic wealth  New operators emerging from the internet economy are almost exclusively coming from the US.  Europe struggles to establish new players able to compete worldwide.  The challenge is between local-based and well-established media firms and international globalised organisations, mainly based in the US, operating as content aggregators.  Traditional instruments such as quotas or public funding to protect local industries risk to be ineffective in the online media environment
  • 28. The gap between US and EU audiovisual industry increases EU industry has been deeply affected by the economic crisis, while US firms keep on growing in the globalised economy. EU audiovisual firms revenues are flat, while US and Japan companies increased their turnovers. This happens despite public funding (license fee, grants, etc.). 0 50.000 100.000 150.000 200.000 250.000 2006 2007 2008 2009 2010 US EU JP BR MX +4.8% +0.5% +7.8% Source: European Audiovisual Observatory, Yearbook 2011. Note: figures include only revenues coming from audiovisual activities. They include results from the 50 leading audiovisual worldwide companies Total revenues of the audiovisual industry 2006-2010 Million€ CAGR CAGR CAGR
  • 29. Conclusion  A greater diversity on the supply side could not correspond to a greater diversity on the demand side, and could not lead automatically to more pluralism.  There is a need for a clearer definition of relevant markets to better address both pluralism and market competition on media.  An excessive fragmentation in the EU media markets and the lack of a unified market risk to make European media outlets too vulnerable in the globalised economy.  It must be understood whether current tools to protect European industry are still effective or not.
  • 30. Media Pluralism and Freedom: Legal Instruments for EU Intervention Elda Brogi & Paula Gori
  • 31. June 2012. As Vice-President N.Kroes affirmed: “Currently the EU does not have the legal competence to act in this area [media pluralism] as part of its normal business. In practice, our role [of the EC] involves naming and shaming countries ad hoc, as issues arise.” A legal overview
  • 32. - the Treaties do not confer an explicit competence to the EU on “media pluralism and media freedom” - but the EU has not been “neutral” on the issue of media pluralism and media freedom - -subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States… - the debate on EU competencies with regard to media pluralism and media freedom is a long debate which is still on-going - Media Monitor - CMPF, HLG and Media Future Forum
  • 33. in broadcasting regulation 1974. Sacchi Case: “…a television signal must, by its nature, be regarded as provision of services” 1989. Television Without Frontiers Directive (TWFD): First harmonisation instrument for the free movement of TV services. It establishes the country of origin principle and refers only to traditional linear broadcasting services. It sets some minimum standards like the protection of minors and public order, consumer protection, the promotion of European works, the right of reply. The debate on the TVWF Directive 1999. Communication on the Future of European Regulatory Audiovisual Policy: “…regulatory policy in the sector is aimed at safeguarding certain public interests, such as cultural and linguistic diversity, the protection of minors and consumer protection…” 2005. Liverpool Conference : media pluralism still is responsibility of MS
  • 34. The AVMS Directive Technological developments - Same legal basis as for the TWFD, namely the free movement of services - Linear services: Programmes provided by a media service provider at a scheduled time and watched simultaneously by viewers - Non-linear services: Programmes users select from a catalogue offered by the media service provider, to watch at their own convenience. However: the Directive does not define a general set of rules for the convergent services and excludes the non broadcasting-like services that do not fall in the definition of industrially run mass media (Recital 22) All media services have to respect a basic tier of obligations in some specific areas: identification of media services providers, prohibition of incitement to hatred; accessibility for people with disabilities; qualitative requirements for commercial communications; sponsoring and product placement. However: two – tier system: stricter regulation for linear services
  • 35. Recital 5 “Audiovisual media services are as much cultural services as they are economic services. Their growing importance for societies, democracy — in particular by ensuring freedom of information, diversity of opinion and media pluralism — education and culture justifies the application of specific rules to these services” Recital 10: “…Bearing in mind the importance of a level playing-field and a true European market for audiovisual media services, the basic principles of the internal market, such as free competition and equal treatment, should be respected in order to ensure transparency and predictability in markets for audiovisual media services and to achieve low barriers to entry.” Recital 12: “…that regulatory policy in that sector has to safeguard certain public interests, such as cultural diversity, the right to information, media pluralism, the protection of minors and consumer protection, and to enhance public awareness and media literacy, now and in the future.”
  • 36. Public service broadcasting/media Instrument to safeguard media pluralism and freedom – 2000 Communication of the EC on Services of General Interest in Europe “…the broadcasting sector has, since its inception, been subject to specific regulation in the general interest. This regulation is based on common values such as freedom of expression and the right to reply, pluralism, protection of copyright, promotion of cultural and linguistic diversity, protection of minors and of human dignity, consumer protection…” PSB is seen as an instrument to ensure the coverage of a number of areas and the satisfaction of needs that private operators would not necessarily fulfill to the optimal extent. (COM 2001/C 320/04)
  • 37. … As a service of general interest it is covered by Article 106(2) TFEU as interpreted according to the Amsterdam Protocol on Public Service Broadcasting (1997): “… the provisions of the Treaty establishing the European Community shall be without prejudice to the competence of Member States to provide for the funding of public service broadcasters insofar as such funding is granted to broadcasting organisations for the fulfilment of the public service remit as conferred, defined and organised by MS, and insofar such funding does not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest, while the realisation of that public service shall be taken into account”. two principal EC Communications (2001/C320/04 and 2009/C 257/01): set of guidelines and rules followed by the EC when it comes to decide state-aid cases in the PSBs domain.
  • 38. Fundamental rights. Article 11 of the Charter • (1) Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. • (2) The freedom and pluralism of the media shall be respected.
  • 39. Other legislation  Electronic commerce  Electronic communications  Information society services
  • 40. What we say in the report - media pluralism is a principle that can operate and be implemented at various levels in the EU order - a list of potential instruments
  • 41. Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of the EU order (1) - Article 11, Paragraph 2 Charter explicitly states that: “The freedom and pluralism of the media shall be respected”. - art. 6 TEU says the Charter has same legal value as the Treaties - the provisions of the Charter are not to extend the competences of the Union as defined in the Treaties - the Charter is addressed both to the EU institutions, bodies, offices, agencies, with due regard to the subsidiarity principle, and to the Member States when they are implementing EU law (art. 51)
  • 42. Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of THE EU order (2) Article 52 (3) of the Charter affirms that: “In so far as this Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.”
  • 43. Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of the EU order (3) - Another bill of rights acknowledged by Article 6 TEU is the Convention for the Protection of Human Rights: “The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms.” - Fundamental rights, as guaranteed by the ECHR and as they result from the constitutional traditions common to the Member States, are to constitute general principles of the law of the European Union
  • 44. Article 11 of the Charter and article 10 of the ECHR: Media pluralism as a general principle of THE EU order (4) - Charter, ECHR and constitutional traditions of MS form a normative corpus that has already had, and will potentially have, a role in the interpretation and application of European law. - The two European Courts, the European Court of Justice of the European Union and the European Court for Human Rights, for instance, can play an important role in the definition and in the application of common European principles starting at “case level”.
  • 45. Competition and cultural aspects: Article 167.4 TFEU - article 167.4 TFEU pluralism-specific considerations in competition analysis. The Commission must take cultural aspects into account in the framework of the Union’s competition policy. Articles 11(2) and 51(1) of the Charter of Fundamental Rights establish the Commission’s responsibility to respect and promote pluralism. On the basis of these provisions, European competition law needs to be applied in the spirit of the overall objectives pursued by the Treaties.
  • 46. Pluralism and internal market harmonization Article 26 TFEU – internal market Article 114 TFEU – internal market harmonization - The European Parliament and the Council shall ... adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market - The European Union can exercise its competences whenever the proper functioning of the internal market is negatively influenced by the existence and application of diverging national provisions in any sector which is not expressly excluded from the founding Treaties
  • 47. ownership; ownership transparency; libel; copyright... national legislation -All these differences can hamper the functioning of the internal market: their existence may be detrimental to the free movement of services or the right of establishment, since operators may find it difficult to establish or to provide services in another Member State, for instance, where dominant positions are in place (see European Citizen initiative) Pluralism and internal market harmonization
  • 48. The implementation of AVMS and the role of NRAs (1) - AVMSD does not foresee the establishment of relevant independent National Regulatory Authorities (NRAs) - comparison with the Electronic Communications Regulatory Framework, which regulates issues which are closely related to those in the AVMS Directive: all relevant national regulatory authorities are requested to comply with independence requirements.
  • 49. The implementation of the AVMS Directive & the role of NRAs - The AVMS Directive does not introduce any specific obligation for the Member States nor does it provide any element about the structure, functioning or role of those national bodies or about the relationship among them. - in an era of convergence, it could be reasonable to consider the establishment of the same institutional requirements both for electronic communications and AVMS (common standards on definition and treatment of similar cases; definition of new media markets).
  • 50. New principles in the Treaties “It is forbidden to create or maintain a dominant position in media markets” “Governments and economic forces cannot exercise any undue influence on media undertakings”. This general precept would be gradually defined by the case law of the CJEU, that would indicate which behaviours could be considered acceptable and which not.
  • 51. The European Agency on Human Rights (or another qualified body) soft law standard-setting & monitoring - another potential European level of intervention on pluralism could be through the Fundamental Rights Agency (FRA) - another qualified body, which should be mandated to monitor Member States and propose common standards, basing its work on the ample case law of the the European Court of Human Rights and the European Convention.
  • 52. Conclusions - EU competences with regard to media pluralism appear scattered in the European legal landscape. - the European Union has few hard and soft law instruments to promote and assure media pluralism and freedom in Europe - the implementation of common principles is feasible at legislative, judiciary, administrative level - given the paramount importance of the democratic principles to be promoted, greater clarity and certainty is needed with regard to EU competences