SSR-SRG – Swisscom – Ringier joint venture: two decisions taken
Bern, 29.02.2016 - The Swiss Broadcasting Corporation (SRG-SSR) is being allowed to participate in an advertising marketing enterprise with Ringier and Swisscom. Once the Competition Commission (COMCO) had given the go-ahead in December 2015, the Federal Department of the Environment, Transport, Energy and Communications (DETEC) assessed the effects of this advertising alliance on the Swiss media landscape. It has reached the conclusion that participation by the SSR-SRG is possible. The DETEC does not currently discern any substantial restriction of the development potential of other media enterprises. In a second decision, the Federal Office of Communications (OFCOM) finds that the current SSR-SRG licence does not permit it to broadcast targeted advertising in its programmes. The general legal framework for this will have to be established before the introduction of this new type of SSR-SRG advertising.
The new venture is being established in a rapidly developing media context in which foreign players (search engines, internet platforms, advertising windows of foreign television stations, etc.) are capturing a growing share of advertising revenues. In 2014, the total advertising revenue in Switzerland rose to CHF 5 billion. Of this, online advertising was worth some CHF 720 million* and television advertising revenues rose to CHF 772 million. Of this amount, the SSR-SRG's share was over 50%, compared to 40% for foreign advertising windows.
Digitisation, Big Data and changes in the habits of media consumers are forcing businesses to make structural changes. Television programmes are increasingly being watched on smartphones or tablets. The SSR-SRG, an association in private law which does not belong to the Confederation, must also be able respond to market trends without substantially affecting the development potential of other media companies. Today, it derives a quarter of its revenue from commercial or other revenues. Publisuisse, the SSR-SRG subsidiary which is expected to be included in the joint venture, contributes CHF 330 million** to the total annual revenue of the SSR-SRG.
The joint venture between the SSR-SRG, Ringier and Swisscom for the marketing of advertising has already received the go-ahead from the Competition Commission (COMCO). In its decision of 14 December 2015, COMCO considers it unlikely that effective competition in relation to advertising marketing will be compromised. For its part, the decision taken today by DETEC should be understood in the context of media policy in Switzerland. Pursuant to Art. 29 of the Swiss Radio and Television Act (RTVA), the Department concludes that the participation of the SSR-SRG will not substantially restrict the development potential of the other media companies and that it does not compromise the implementation of the programme services mandate. For the time being, DETEC is therefore not imposing any conditions on the SSR-SRG. It will nevertheless monitor trends in the market as well as the repercussions of the joint venture on the media and advertising market.
Art. 29 of the RTVA is not intended to preserve structures. In order to be able to intervene quickly and effectively at any time, DETEC has nevertheless required the production of reports, in particular on the portfolio, the access conditions for the business partners and the development of the SSR-SRG's advertising revenue.
DETEC has rejected the granting of party status requested by competing media companies.
Targeted advertising by the SSR-SRG requires a new legal framework
As a result of technological development, targeted advertising is becoming increasingly important. Today, several media companies, in Switzerland and abroad, are already operating platforms which transmit targeted advertising. Although the SSR-SRG can be a shareholder in the joint venture, it cannot currently insert this type of advertising into its programme services, unlike private broadcasters, which do not benefit from a licence. In view of this fact, OFCOM has taken a separate decision for the attention of the SSR-SRG, in parallel with the DETEC decision. The current SSR-SRG licence does not authorise the broadcasting of targeted advertising in its television programme services. It is true that the participation of the SSR-SRG in the joint venture is one of the corporation's commercial activities and is therefore not regulated by the licence granted by the Federal Council. However, the broadcasting of advertising is an integral part of TV programming and is for this reason subject to the provisions of the licence. However, offering different advertising to defined groups of television viewers is equivalent to a proliferation of the programme services of the SSR-SRG and must therefore be subject to licensing. The current legal basis therefore prevents the SSR-SRG from introducing this new practice. OFCOM concludes that this issue should be resolved by an amendment to the licence, or even to the Radio and Television Ordinance; this would also make it possible to take into account the possible consequences on regional media.
In all cases, the ban on advertising in the online service offering of the SSR-SRG will be maintained.
The procedure
DETEC and OFCOM have examined the SSR-SRG's participation in the advertising joint venture with Swisscom and Ringier from the viewpoint of media legislation. To do this, they sought the opinions of the main advertising and media associations and questioned the SSR-SRG in writing. OFCOM, in its capacity as the surveillance authority, will closely monitor future developments. If it should become evident that the SSR-SRG's participation in the joint venture was having significant effects on the provision of the SSR-SRG's services or on other media companies, DETEC could at any time enact a procedure pursuant to Art. 29 RTVA.
Today's decision lifts the ban on the SSR-SRG positioning itself in the market within the framework of the joint venture, a ban imposed by OFCOM on a provisional basis on 16 December 2015. DETEC's decision on Art. 29 RTVA and OFCOM's decision for the attention of the SSR-SRG concerning targeted advertising can be contested before the Federal Administrative Court.
* Source: Fondation Statistique Suisse en Publicité (advertising market, excluding online advertising, 2014) and Media Focus (estimate of spend on online advertising, 2014)
** Source: Publisuisse Annual Report, 2014
Address for enquiries
Federal Office of Communications OFCOM
Press service, +41 58 460 55 50, media@bakom.admin.ch
Publisher
Federal Department of the Environment, Transport, Energy and Communications
https://www.uvek.admin.ch/uvek/en/home.html
