Source : Singapore Straits Times

The European Union took a potentially historic step this week: Its competition agency announced the start of an investigation into whether the public subsidies, which European governments give to their state broadcasters, distorts free markets.

Regardless of what happens, the EU action is a warning that the days when government-funded radio and TV stations ruled the airwaves on the continent may be coming to an end.

The arrangements governing the activities of the BBC - Britain's state broadcaster - have served as a model for many other nations.

Given a government task to 'inform, educate and entertain', the BBC is funded by a hefty tax ($390S yearly) levied on anyone who owns a TV set. The result is a broadcaster which may be good in its output but which, in today's world, could be a 'redundant piece of voodoo', as a disgruntled private TV producer recently claimed.

For the world has changed, with the emergence of thousands of private radio and TV stations, as well as the advent of satellite transmissions.

Half a century ago, 70 per cent of Europeans tuned in to state-owned broadcasters; today, barely a quarter does so, and that number continues to dwindle.

Desperate to remain relevant, some European state broadcasters are competing with the private sector: Apart from numerous new satellite channels, the BBC has one of Britain's best news websites, containing a whopping six million pages.

The trouble is that most of this competition is financed by taxpayers, something which the EU regulators may conclude is unfair to private media operators.

To make matters worse, some European state broadcasters are also allowed to carry advertising, distorting the market even further.

The EU initiative is badly timed. The British government recently granted the BBC a licence to operate for a further 10 years. And only last week, French President Nicolas Sarkozy announced a new media policy which would boost the country's state broadcasters, provided they promote France's image, in the French language.

So, the chances are that the EU investigation will be squashed by many European governments. But the case for subsidising public broadcasters is still getting weaker by the day. And the same European audiences which demand high-quality programmes are also telling opinion pollsters that they are unwilling to pay for the service.

'There is a lot of life in the old dog yet,' a BBC official said recently, trying to reassure state broadcasters that their future is safe.

Perhaps. But some of them are very old dogs indeed.

The case for subsidising public broadcasters is getting weaker by the day.

© Singapore Straits Times