In Iceland, a report on RÚV, the Icelandic National Broadcasting Service, has been followed by a heated political debate. Both the opposition in Parliament (Althingi) and individuals within the media community have criticized the report as politically biased and methodically unfair. The report, presented in October, is expected to serve as input in the ongoing discussions concerning a new service contract between RÚV and the State.
In 2007, RÚV changed its organizational form from an official institute to a public company (Ltd). At the time, RÚV’s organization had been disputed for many years, and it usually operated at a large deficit. The change was thought to offer a better operational foundation and more solid structure, as well as separating the finances of RÚV and the State.
In the spring of this year, the Minister for Education and Culture for the right-centre government (Conservatives), Illugi Gunnarsson, established a committee to analyse the development of the activities of RÚV. Its point of departure was to measure whether the goal of the reorganization in 2007 had been achieved.
The committee wants changes for RÚV
The three-member committee – consisting of a chairman (a political ally of the Minister), an expert from the Ministry of Financial and Economic Affairs (led by the Conservatives), and an expert from a private company – has compared the finances of RÚV to those of Iceland’s largest private media company, 365 ehf. The report argues that RÚV has higher operational costs than 365, but while 365 is making a profit, RÚV’s revenues end up in the red.
The comparison between RÚV and 365 ehf has been greatly criticized for being unfair – with assertions that financial statistics have been chosen and stacked in favour of the private company, e.g., leaving out 365’s costly sports channels and programmes.
The bottom line the committee came to was that without changes – e.g. higher fees, the sale of some assets, a new service contract with the State – the operation of RÚV will be unsustainable. The committee raised questions as to the “Ltd” form, whether RÚV should partake in the advertising market, and whether it is the organization best suited for achieving the objectives of the State regarding culture, language, democratic debate, etc.
Renewal of contract between RÚV and the State in 2016
RÚV and the State have an ongoing service contract – with the current one running out this coming December 31, and discussions underway regarding its renewal. The new report is considered to be fodder for these discussions – politically motivated fodder, according to critics. It is not the policy of the current Government to shut RÚV down – to take the State out of the media market – but rather to limit its scope, and in 2013 a law was passed limiting the amount of advertisements in RÚV’s daily programmes.
About RÚV’s financing form: From 2009 onwards, RUV’s public funding consists of revenues from a special fee, a tax levied on individuals and legal entities (previously a licensing fee). The fee has not gone to RÚV in its entirety since the company started, but will do so beginning January 1, 2016, according to government policy. RÚV also receives revenues from advertising. The proportion tax revenues – advertising revenues is about 2/3 from tax and 1/3 from advertisers. See overview of the public funding systems in the Nordic countries (Excel file, from Nordicom’s table database).
BY: Friðrik Þór Guðmundsson