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Performance of Public and Private Television in Iceland 1993–1999 an Assessment1

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Performance of Public and Private Television in Iceland 1993–1999 an Assessment1 Performance of Public and Private Television in Iceland 1993–1999 An Assessment1 RAGNAR KARLSSON, HILMAR THOR BJARNASON, THORBJÖRN BRODDASON & MARGRET LILJA GUDMUNDSDOTTIR Introduction rameters of the military base. The programmes on A Short Overview of Television offer consisted largely of popular American enter- Broadcasting in Iceland tainment series and children’s programmes. Partly in response to this ‘cultural invasion’ the The 279 thousand Icelanders that occupy their Icelandic National Broadcasting Service (Rikis- North-Western island outpost of Europe are relat- utvarpid – RUV) started television transmissions in ively small players when compared to most of their September 1966. Its programming consisted of just European neighbours in terms of the media. At first a few hours, three days a week. Shortly, it was in- glance, one can easily assume that the media and creased to six days a week, and within six years, broadcasting landscape in a country like Iceland the signals were reached by over 98 percent of the would be one lacking in diversity due to diseco- population. Until 1983, the month of July was tele- nomics of scale (e.g. Noam, 1991: 233). Such a de- vision-free, and until 1987 RUV-TV sent no televi- scription could have applied to Iceland once, but sion broadcasts on Thursdays (for an overview of with the process of deregulation that swept Euro- the origin and development of television in Iceland, pean broadcasting in the 1980s, the broadcasting see Bjarnason et al., 1997, Broddason, 1996a, market in Iceland has acquired all the main char- 1996b, 1998). acteristics and features of any other broadcasting Until 1986, the Icelandic National Broadcasting market in Europe. Service had a monopoly over broadcasting for both Iceland was one of the last nations in Europe to radio and television. The Broadcasting Act of 1985 introduce television broadcasting in 1966 – only paved the way for private interests to enter the Albania and the European microstates Andorra, field of broadcasting. Some months after the new Liechtenstein and San Marino commenced broad- law came into effect on January 1, 1986, the first casting later. The origins of television broadcasting private commercial radio station was in business in Iceland can be traced to the mid–1950s, when and a few months later the first private commercial the American NATO forces, stationed at the Kefla- television station was in the air. vik military air base in Southwest Iceland com- Today, Iceland has nine domestic national, re- menced a television service in 1955. This tele- gional and local television channels. Only three of vision station was, first and foremost, intended for these are of interest for this study, all of them hav- the service members and their families. However, ing almost a universal technical penetration. De- the signal could also be enjoyed by a considerable spite the television market in Iceland can be con- number of the Icelandic population outside the pa- sidered a thriving one, as measured in terms of sup- ply of channels and output, it is highly concen- trated. This applies equally as dependence of im- Faculty of Social Sciences, University of Iceland, ports of programmes, market share of viewers, rev- IS-101 Reykjavik, [email protected] enue and ownership are concerned. The Icelandic 101 broadcasting market is probably among one the • RUV-TV – a publicly owned television station, most deregulated markets in Europe, with almost founded in 1966. none restrictions on ownership and cross-media • Channel 2 (Stod 2) – a privately owned televi- ownership, whatsoever, and little regulation on pro- sion station, founded in 1986. gramming of the private television actors. • Vision TV (Syn) – a privately owned television Disposition of the Work station, effectively in operation since 1995. The following study is concerned with general-in- A concise description of the major television actors terest, nationwide, television companies in Iceland. in Iceland is presented in the following sub-chap- It adresses questions of public service vs. private ters and in Table 1. enterprise; ownership structure and concentration; differing sources of revenue; the companies’ share RUV-TV of advertising; comparisons of programme contents RUV-TV is a state owned organisation and oper- in terms of origins and costs; and market analysis. ates along the principles of public service broad- The period of study primarily spans the years 1993 casting. In accord to the Broadcasting Act, RUV- to 1999 with occasional references to other periods. TV is required to transmit to the Icelandic nation as a whole, i.e. the requirement of universal penetra- Actors in Icelandic Television tion. Since the 1970s, RUV-TV has had almost a Broadcasting universal technical coverage. Already in 1970, four years after the foundation of RUV-TV, some 85 Major Television Actors percent of the population had access to television Drawing the line between major and minor actors (Berg, 1971). At the end-of-year 1999, its transmis- in the case of Iceland is relatively unproblematic. sions reached 98 percent of all homes in the coun- There are at present three television stations that try, equivalent to some 96.000 homes out of a total provide a full programme service with a general of 98–99 thousand (see Table 2).2 The license fee appeal as well as a potential reach of a majority of for RUV-TV, including license for radio, in 1999 the population. As will be demonstrated below, the was 25,200 ISK per annum (346 EUR).3 Besides of financial scope of these stations corresponds to being financed by license fees, which in 1999 did these engagements. These three stations will be the make up 69 percent of total turnover of the station, prime focus of this study. They are: the other receipts of the station derive mainly from Table 1. The Three Major Television Actors in Iceland RUV-TV Channel 2 Vision TV Owner The State Icelandic Broadcasting Icelandic Broadcasting Corporation Corporation Transmission area Whole country Whole country Whole country Financing License fees, commercials Subscriptions, commercials Subscriptions, commercials & sponsoring & sponsoring & sponsoring Technical coverage of households % ≈100 ≈100 ≈95 Tex t T V Ye s Ye s Ye s Distribution Terrestrial & cable Terrestrial Terrestrial Encryption Clear Encrypted1 Encrypted Statutory Public Private Private Programming format General-interest General-interest Sports and fiction Average weekly broadcast hours 65 109 64 Year of regular transmissions started 1966 1986 1995 1 Practically the entire programme schedule of Channel 2 is encrypted, apart from its news and current affairs programmes, breakfast TV and occasional other program items. Sources: Karlsson (ed.), 1999a; Statistics Iceland, unpublished information. 102 advertisements, and to a much lesser extent spon- scription share among the population is of course soring (RUV, 1998). much lower. Information on development of the In 1999, RUV-TV transmitted television pro- subscription base of the station is not available. grammes for a total of 3.369 hours or just over 9 However, media rating surveys give a crude indica- hours per day on average. In accord to the Broad- tion of the penetration of the station (see Table 2). casting Act, RUV-TV is an open-for-all television Only a year after the station commenced broadcast- station that offers a varied menu of programmes, ing, in 1987, some 33 percent of the population such as news, news analysis, documentaries, enter- claimed to have access to the station through sub- tainment, drama, feature films, sports, music, scription at home. This can roughly be translated to children’s and youth programmes, etc. some 28.000 households of a total of 84.000 in that respective year.4 Surveys seem to affirm that the Channel 2 number of subscribers to the station has reached Channel 2 was the first television station to take the point of saturation. Since in the early–1990s, advantage of the new opportunities provided by the the percentage of subscribing population to Chan- Broadcasting Act of 1985. Channel 2 began nel 2 has remained stable, or between 50 and 60 transmitting television programmes in November percent of all homes. In October 1999, 55 percent 1986. It is owned by the Icelandic Broadcasting of the population had access to the station (Gallup, Corporation Ltd. – IBC (Islenska utvarpsfelagid), 1999b), which roughly translates to 54.000 house- which is a subsidiary company of the multi-media holds. Thus, the key to further growth of the IBC, company Northern Lights Corporation Ltd. (Nor- in the field of television seems to be based on niche durljos). The mother company has vested interests markets, instead of that of the general viewer as its in television and radio broadcasting and in most recent launch of a special movie channel would other sectors of audio-visual media, as well as hav- seem to indicate (Karlsson, 1999b: 183). ing interests in cellular telephone services and as- Except for its news broadcasts and breakfast TV sorted information and communication technology and occasional other programs, Channel 2 scram- activities (ICT), either directly or through its bles its programme schedule and all subscribers daughter companies (see page 116 for chapter on need a decoder (Tudi Nicam RTP 200) to receive a ownership). Channel 2 derives its income from a clear signal. The annual subscription rate for Chan- subscription fee, advertising revenue and the spon- nel 2 in 1999 was 43.389 ISK (596 EUR) per an- sorship of individual programmes. num. According to the Broadcasting Act, there are no The programme profile of Channel 2 can be de- legal obligations for private television stations to scribed as a ‘general-interest’ format. It is to a adhere to the principle of universal penetration. large extent based on imported material of Anglo- However, Channel 2 has almost a universal tech- American origin.
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