European media business calls on politicians to ensure sustainability of creative content business in the future
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Brussels, 30 June 2010 – Today representatives of the European media business – including the Association of Commercial Television in Europe (ACT), the Association of European Radios (AER), the European Publishers’ Council (EPC), the European Association of Communications Agencies (EACA), the Association of Television and Radio Sales Houses (EGTA), the European Newspaper Publishers Association (ENPA), the European Association of Magazine Publishers (FAEP), and the World Federation of Advertisers (WFA) – gathered in Brussels to discuss about the future of the media in Europe.
When holding their first joint event in the European Parliament entitled “European Media Revolution – Ensuring Viability”, the associations called on politicians and regulators to establish a regulatory environment in which free, independent, diverse and vibrant media will be sustainable in the future. The event has been hosted by Mary Honeyball, Socialist MEP from the United Kingdom, and speakers included media senior executives, several MEPs, an expert from PricewaterhouseCoopers and Neelie Kroes, Vice-President EU Commission & Commissioner for the Digital Agenda.
In the current changing environment advertising remains a key revenue source for the content industry, helping to ensure high quality production and the independence of media which is crucial to its role in democracy. The media industry works hard to maintain advertising revenues in order to sustain the costs of production of European content which consumers value enough to spend time with or pay for directly.
In the light of the discussions about the Digital Agenda and the creation of a competitive EU as described in the EU 2020 Strategy, the undersigning associations call on politicians to take into account the following points:
- The media play a crucial role in democracy by informing citizens about political, economic, social and cultural issues, by entertaining and connecting viewers, listeners and readers.
- Advertising funds a diverse, pluralistic media landscape. Good content costs money and without advertising many of the world’s media would not exist.
- Self regulation across Europe ensures responsible advertising. Consumers are protected due to the self-regulatory system established in all EU Member States and at the European level.
- The close relationship between media and advertising benefits European creative industries. More than 63% of Europe’s TV broadcasting programming time is devoted to European works and over 36% to works by independent European producers. Also the European daily and periodical press provides quality content to its readers about relevant aspects of the everyday life.
Commercially-funded radios constitute a unique network of small and mediumsized enterprises, contributing to cultural diversity, media pluralism, access to creativity and social inclusion in a ubiquitous and free-to-air manner.
- A disproportionate regulation of advertising or bans on advertising of certain products or imposition of specific advertising requirements (such as mandatory labelling-type information in advertising) will lead to a decline in revenues for all media across Europe. The regulatory framework needs to reflect technological changes and allow this complex market to provide services and content that consumers want.
Speaking at the event, Philippe Delusinne, ACT President & CEO RTL Belgium, said: “Our vision of Digital Europe is one in which professional content – news, sports, fiction, movies – retains its central role in the world of media and entertainment. This is also the vision of most politicians, I assume. And above all, it is also the preference of European citizens, watching professionally-produced content for 222 minutes every day. So encouraging commercial enterprises to earn money from selling advertising, and then to take the risk to reinvest revenues in content helps to shape the sort of digital economy we want“.
Panellist Olivier Fleurot, President of EACA & CEO of MS&L Group, said: “The big challenge from an advertising perspective is that traditional “push” marketing is being progressively replaced by conversations generated through social media. This is a bottom up, not a top down process. Brand perception is as much influenced by those conversations as by traditional campaigns.
To succeed, advertisers must change the way they present themselves – they must be genuine, authentic, avoid greenwash for instance. Our role as agencies is twofold – there is clearly a quantitative role, supplying advertising revenues to media on behalf of our clients. Perhaps more importantly, what agencies also have to do is ensure that the qualitative aspect of their work reflects the new demands of the public.
Themes, that are at the top of the agenda for many consumers like sustainable development, force companies to re-invent their products, their services and their advertising. Agencies need to advise their clients on CSR issues and advise on how to communicate in a digital world“.
Nikos Gouraros, Vice President – OPA Europe, Director of Business Development – Digital Media Business Unit, Lambrakis Press SA representing the newspaper and magazine publishers associations ENPA, EPC and FAEP stressed: “In order to maintain a free, independent, diverse and vibrant press across Europe we need sustainable business models. Today at least 50% of our revenue in the printed press comes from advertising, the rest from cover price sales. Online the business model is more challenging as paying for content is less common than in the print world.
This may change but meanwhile companies that rely only on advertising for their online revenues need to find almost 100% of their income from advertising to become profitable. The press is extremely vulnerable in economic terms as advertising revenues for the press online are nowhere near the levels needed to fund a viable publishing business. I therefore really hope that politicians in Brussels do not undermine the vibrancy of the press in Europe by bringing in any advertising bans or restrictions.“
Stefan Möller, AER Vice-President, and Finland’s RadioMedia Managing Director, recalled: “On-air broadcasting radios reach massive audience on a daily basis in all EU Member States: between 60 and 85% of the EU population on average listens to radio for at least 2 or 3 hours per day. Commercially-funded radios can only broadcast their programmes free of charge to millions of European citizens, thanks to the revenues they collect by means of advertising.
The only viable business model for radio nowadays and for a foreseeable future is analogue FM broadcasting of free-to-air programmes. Advertising is the prerequisite to make radio the most intimate medium currently, and the fundament to ensure its digital development“.