Licensed to bill… where does the money from our TV licences go?

According to a survey carried out by the National Statistics Office, in 2008 141,840 households owned approximately 228,800 television sets. However only 119, 824 of these are licensed. Of these again, 84,457 are fully paid up, leaving 35, 367 licences unpaid.

All this translates into lost revenue for the Government. A TV licence cost €34.95 annually. Government revenue from TV licences in 2009 amounted to approximately €3 million. A further €1.2 million is being lost in unpaid licences. As more than 50% of televisions in Malta are unregistered, a further €3.8 million is being lost.

As a result, government this week announced that it is mulling over the possibility of taking legal action against licence defaulters. But this immediately raised eyebrows, considering that the Nationalist Party (now in government)  had actually promised to scrap the licence altogether in its last electoral manifesto in March 2008.

Back then, the PN manifesto observed that the licence was past its sell-by date. So why insist on the collection of payments, on a licensing regime it had described as ‘expired’?

Replying to this question, a spokesperson for the Ministry of Communication said that as payment of one’s television licence is still a legal obligation, the department will remain responsible for collection of dues until the law has effectively been changed.  If, on the other hand, it failed to collect its dues, the same department would be criticised by the auditor general.

However when asked how the revenue generated from television licences is actually distributed, the ministry refused comment.

How the money is spent

So what happens to the money raised through the licensing regime?

Surprisingly, it turns out that the revenue collected does not go to Public Broadcasting Services (PBS), as is the case in many other countries.

Anton Attard, Chief Executive of PBS says that the television station is financed by a Public Service Order issued by government – but this is not equivalent to the money currently being generated by TV licences.

Furthermore, State financing is used for the production of certain programmes including current affairs and drama. Other programmes that do not fall under this category must be paid for out of advertising revenue.

Dr Clare Thake Vassallo, who was Chairman of PBS until last March said that TV licensing is only important to broadcasting if used to (as it) ensure the independence of public television.  However she disagrees with the way in which the revenue is acquired in Malta, since it is not passed on to the Public Broadcasting Station, PBS.

At the moment, a licence is necessary for any person in Malta who owns a television set.

It is no longer necessary to own a television set to watch programmes broadcast on television as these can be watched on a computer or even a mobile phone. Equally televisions may be used to watch programmes, which are not transmitted live – DVDs for example, to play video games or used as a monitor for computers.

In Malta, television sets are still subject to a licence even if they are not used to watch live broadcasts. On the other hand, computers – which can also be used to watch television on – are not.

Taking the UKas an example, a licence is required for any device that allows live transmission of television programmes: including television sets, computers and mobile phones. However, no licence is needed if a television set is owned for the purpose of watching pre-recorded material (as in DVDs, etc).

In Thake Vassallo’s opinion, the revenue generated from television licences should be used to ensure quality of public broadcasting, as is the case with the BBC.

The money should be used to ensure a properly staffed newsroom with up-to-date equipment and digital archiving facilities for all news items

But first the revenue has to be raised, and apart from the fact that there are so many unpaid licences, there are also clear indications that the licensing regime itself is not popular.

In an online poll on Pjazzetta.com the majority of Maltese voters (89.7%) voted against payment of television licencing. However, this is not a scientific poll and may not reflect true public sentiment.

The BBC model

In the UK, the television licensing regime is strict, and being caught without a licence can incur a fine of up to £1,000.

Licence fees in the UK are used to finance the BBC’s television stations, local radio stations as well as websites.

The vast majority of owners of television equipment in the UK support the principle of licence fees, despite them being substantially more expensive than those in Malta, at £145.50. The most fundamental reason to promote television licences is that, being self-financed, the BBC retains independence from both commercial and political pressures.

Other advantages include diversity of television programmes, high quality, education, innovation, entertainment, information, original productions, pluralism, accessibility and inclusion of minorities.

Though the BBC’s system of charging TV licences to finance broadcasting is accepted by many, it is not without problems. Many believe that licences should be scrapped and revenue generated from advertising sales be used to finance broadcasting.

Obscene phone calls made by Jonathan Ross and Russell Brand to the actor Andrew Sachs aired on Radio 2 in 2008 caused public outcry at public funds were being used to finance “filth.” Other controversies and misjudgments include huge salaries of executives and escalating costs of BBC buildings, scandals about misleading viewers and accusations that programmes have become over-cautious in response.

A number of countries worldwide have chosen to abolish television licences including Australia, Belgium, Netherlands, New Zealand, Cyprus and Gibraltar among others.