Protectionism vs. Non-Interventionism: Two Approaches to Media Diversity in Commercial Terrestrial Television Regulation

Abstract

Roughly a decade has now passed since the full-scale introduction of digital terrestrial television (DTTV) across the European continent. In Scandinavia, DTTV put an end to the so-called duopolistic television market model, in which a fee-financed public service broadcaster (PSB) competed with a commercial, but carefully regulated, broadcaster—a hybrid. The hybrid concept was an attempt to maintain a diverse broadcasting market also in small linguistic markets. Building on the theoretical framework of market failure, this article compares the impact on external and internal market pluralism of the protectionist policy of Norway, which has chosen to keep a hybrid channel also in the new multi-channel environment, and the non-interventionist policy of Sweden, in which the hybrid concept has been abandoned. The results point to a problematic trade-off, where the more public service-oriented Norwegian hybrid TV2 has experienced plummeting market shares, whereas the Swedish “former-hybrid” TV4—following a clear reorientation towards more market-oriented programming—has been able to uphold theirs. The findings highlight the increasing difficulties of designing effective national media policies in the globalised media landscape.

KEYWORDS:

• digital television
• broadcasting
• media policy
• market diversity
• public service
• Scandinavia

Introduction

The concepts of “media plurality” and “content diversity” hold elevated positions in media policy. A media landscape inhabited by a variety of actors, catering to a variety of social groups, through a variety of contents, has been regarded as critical to a vibrant democracy, and as such, a key objective of policymakers around Western Europe. Because the audience maximisation strategies of content producing media tend to lead to duplication of content rather than diversity (Steiner 1952), the “public interest” argument has motivated public intervention designed to protect pluralism in media markets (Hallin and Mancini 2004; McQuail 1992; Napoli 2015). Since its introduction in the 1950s, broadcast television has been at the epicentre of this inherent conflict between private and public interests in the media. Analogue terrestrial television was one of the most carefully regulated industries in Western Europe. The level of state intervention in the television market reflected the perceived social impact of broadcasters in public and democratic life (Donders 2011).

While many European countries support public service broadcasting (some with provisions for commercial public service, most notably the United Kingdom (Sihvonen 2016)), Scandinavia stands out as the region in which the “public interest” argument has perhaps made its greatest impact on media policy in general, and broadcasting policy in particular (Hallin and Mancini 2004). In the 1990s, Denmark, Norway and Sweden all introduced a so-called duopolistic television market model, in which a fee-financed PSB competed with a commercial, but carefully regulated, broadcaster—a hybrid—in the analogue terrestrial networks (Lund and Berg 2009). The principal idea of the hybrid channels was a negotiated agreement where content requirements, such as news, regional programming and cultural output, were exchanged for financial incentives, primarily the reserved rights to broadcast ad-financed television in the terrestrial network. As such, they were distinct expressions of what has been referred to as the Nordic media model, in which public authorities have taken an active role in the development of the media sector for overall social benefit (Syvertsen et al. 2014).

The hybrid model was a result of the technological limitations inherent to analogue broadcasting. The finite spectrum space imposed limitations on the number of analogue channels that could be licensed. This justified public intervention for the efficient use of a public resource. With the advent of DTTV, launched full-scale across the European continent during the first decade of the twenty-first century, the spectrum limitations disappeared. The widening of the broadcasting spectrum enabled by new technology effectively refuted traditional arguments for content provisions bestowed on commercial channels (Marsden and Ariño 2005). In Scandinavia, DTTV put a definite end to the duopolistic market model. The introduction of the new broadcasting technology has thus gone hand in hand with a need to re-evaluate and reformulate the legal framework surrounding commercial TV sectors. The rapid changes to the dynamics of television markets caused by digitalisation, and, in particular, the audience fragmentation resulting from the introduction of subscription streaming services, therefore, reflect growing volatility in television markets where future income and market shares remain uncertain. The challenges that global “superplayers” (Sjøvaag 2016) pose for national media systems not only force traditional television companies to adjust their strategies, they also put new demands on regulations (Freedman 2015; Lund 2016)—particularly policies that aim to preserve broadcasting systems on “public interest” terms, further exacerbating private/public interest conflicts.

This article analyses how Norwegian and Swedish media policy have adapted to the new broadcasting technology and the consequences of new regulatory regimes for the individual broadcasters, the development of commercial television markets and the plurality of the television medium as a whole. Unlike Denmark, which maintained state ownership of the hybrid channel (TV2), Norway and Sweden chose to designate these broadcasting rights to private actors. As it turns out, Norway and Sweden—often identified as the epitomes of the democratic-corporatist system (Hallin and Mancini 2004)—have assumed rather different paths in regulating the private broadcasting sector in the digital era. Whereas policy intervention in Norway has primarily sought to safeguard incumbents (NOU 2017:7)—instituting protectionist policies aimed at securing the income of the hybrid channel—Swedish media policy has assumed a hands-off approach to hybrid operations, liberalising regulations to facilitate financial viability in the digital era (Ohlsson 2015). Thus, the two Nordic neighbours have provided us with a “real-life” experiment concerning the impact of an active versus a more passive state in relation to the commercial television market.

The outcomes of the different policies are analysed against the thesis of market failure (Pickard 2014), a premise derived from economic theory that posits that free market conditions in some cases will result in market inefficiencies. The Scandinavian hybrid channels were an attempt by legislators to offset the negative effects of the free market and to secure a high degree of television content plurality (Lund and Berg 2009). A key conclusion from our analysis is that the market failure argument is still pertinent, perhaps even more so, in days of spectrum abundance—at least when related to the chief objective of Swedish and Norwegian broadcasting policy: to secure plurality in the media landscape. As such, this article addresses the ever-increasing tension between national policymaking on the one hand and the universal forces of globalisation, commercialisation and a rapid technological development on the other. The contribution of this perspective is twofold, first in the attention it renders to an under-researched sector of the broadcasting market, namely the commercial PSBs and their regulation, and second, the role of policy in balancing between the two particular aims of commercial PSB operations—financial viability and media diversity.

The Dynamics of National Broadcasting Markets

The political rationale for regulating television in democratic countries has typically rested in the concern that broadcasting markets, left to market forces alone, will fail in promoting beneficial outcomes that might be socially desirable (Berg, Lowe, and Lund 2014; Coase 1966). On the one hand, increased competition tends to lead to less content differentiation (Steiner 1952). On the other, economies of scale and scope allow large multimedia conglomerates to gain economic advantage in competition for market shares. Unregulated broadcasting markets are thus prone to domination by a limited number of large-scale commercial players (Doyle 2002; Horwitz 2005). The tendency towards oligopoly—monopoly even—is particularly pronounced in small linguistic markets (Berg, Lowe, and Lund 2014; Brown 2005). Ownership concentration in broadcasting markets has therefore been regarded as detrimental to policy objectives of pluralism (NOU 1995:3; SOU 1999:30). Unregulated television markets are also prone to market failure due to the particular business model of the broadcasting sector. In media markets relying strongly on advertising, commercial enterprises can be expected to cater sufficiently only to audiences that are important to advertisers (Gentzkow and Shapiro 2008). Groups of less or no commercial value will not be addressed (Donders and Raats 2015; McManus 1994). The production of less commercially attractive programming is associated with “opportunity costs,” as more lucrative alternatives must be waived due to the constant of scarce resources.

In the Scandinavian countries, television—like radio some three decades earlier—was organised as state-controlled non-commercial projects from the beginning. Given the mounting technological and political pressures to abolish the broadcasting monopolies of the Scandinavian PSBs in the late 1980s (Näränen 2005), the hybrid concept presented an attractive middle course, as it offset the negative externalities of the economics of television, while increasing competition in the television markets. Much like the proper PSBs, the Scandinavian hybrid channels were mandated to provide programming and cater to groups not considered commercially attractive, and provide universal availability of programming to all citizens (Lund and Berg 2009). The exchange of social obligations for economic privileges exemplifies the impact of bartering between public and commercial interests on the formulation of media policy so characteristic of democratic-corporatist media systems (Hallin and Mancini 2004), which could also ensure “high broadcasting plurality within and between different television channels” (Lund and Berg 2009, 31).

Different Means Towards a Common End

Unlike satellite or cable, which in Europe was propelled primarily by commercial forces, the development towards DTTV was generally driven by media policy. Sweden and Norway were among the first countries in the world to introduce DTTV (Brown 2005). In Sweden, the analogue switch-off was completed in 2007. In Norway, the broadcasting spectrum was fully digitised by 2008 (Storsul and Syvertsen 2007).

Politically, the decision to introduce digital TV was grounded in a long-held belief in the need for an active state in the broadcasting sector (NOU 1999:26; SOU 1999:55). In Sweden, digital technology was to be employed so that it “expanded freedom of speech and plurality, and counteracted private and public concentration of power” (Prop. 1996/97:67, 23, translation). In Norway, the aim of DTTV was “first and foremost to increase media diversity and to ensure a wider range of television programming for the entire population” (White Paper 44 2002–2003, 14, translation). Consequently, the selection of broadcasters licensed to operate in the new digital network were to ensure that the programming as a whole catered for different interests and tastes.

An early adoption of DTTV presented an opportunity to not only pre-empt further advances into the Swedish and Norwegian markets by satellite broadcasters (Enli et al. 2013), but also to protect national cultural sovereignty by regaining regulatory control over television programming addressing national audiences through public service remits (SOU 2003:109; White Paper 44 2002–2003). The political motives behind the digitisation of the terrestrial networks in Sweden and Norway did not deviate from the traditional rationale of these national media policy regimes, which for decades had been characterised by a concern for not only the well-being and integrity of its citizens, but the welfare of domestic media corporations as well.

The most important difference between the Norwegian and Swedish DTTV policy concerned the status of the hybrid channels. In Norway, TV2 remained public service obligated after extensive renegotiations in 2010. Upon the renewal of its public service remit, TV2’s “must-carry” status was priced according to its “market value,” which increased TV2’s revenues significantly (Sjøvaag 2012). With the “spectrum scarcity” argument no longer valid, TV2’s agreement (2010–2015) with the state included public service content provisions (most notably daily news, Norwegian language programming and children’s content). The agreement gave TV2 an economic advantage, particularly as the “must-carry” market price ensured that the cost increase fell to the end-user.

In Sweden, on the other hand, licence provisions for the digital TV market excluded the detailed content obligations that had characterised the analogue licence terms of TV4. The new set of commercial digital licences only broadly specified the general profile of the different channels. For TV4, the digital content-related provisions were limited to broadcasting news at least four times per day, in addition to “social, entertainment, sports and children’s programming, and films” (Swedish Radio and TV Authority 2008, 2). The channel also pledged to broadcast regional programming in at least 16 areas, and at least 5 regional programmes per day. In the subsequent licensing term (2014–2017), the provisions concerning the number of newscasts and regional programmes were lifted (Swedish Broadcasting Authority 2014).

The Market and Public Sphere Models

Media regulation tends to follow either the market model or the public sphere model. The public sphere model considers government as the necessary safeguard for ensuring media diversity, while the market model considers free competition as the guarantee (Iosifidis 1999). While the market model argues for limitation and liberalisation of policy measures, the public sphere model favours positive, interventionist measures. The Scandinavian duopolistic market model was a clear-cut example of policy guided by the public sphere model. The licensing terms of the hybrids were established in negotiations between the broadcasters and their governments, in which content requirements were exchanged for financial incentives (Lund and Berg 2009). Regardless of whether the state or the market is considered the best facilitator, conditions for good economic performance are necessary to sustain a diverse media sector (Entman and Wildman 1992). By facilitating conditions that render a diversity of competing outlets (i.e. external diversity), the liberal model leaves it to the market to ensure that broad and narrow audience groups are catered for. Interventionist models, however, also entail measures aimed at ensuring internal diversity, particularly through content provisions often including provisions on news and current affairs content, national language content and programming for children and minority groups.

Assessing the policy paths of Norway and Sweden in the multi-channel era, Norway has maintained an approach guided by the public sphere model, whereas Sweden has chosen a course guided primarily by ideas associated with the market model. The difference between the two situations lies in the balancing between political and financial considerations. In Norway, the state was sufficiently concerned about the diversity of the national media landscape that renegotiations in 2010 imposed regulations to ensure TV2 additional income from the private cable distribution sector. For TV2, the agreement with the state indirectly entailed an exchange of content provisions for cash. In addition to increased income, TV2 retained its public service brand. In Sweden, TV4 was instead placed on an equal footing with the other commercial channels. Following the analogue switch-off, TV4 was more or less free to shape its own programming. With the introduction of DTTV, the hybrid concept was abandoned in Sweden, and the market for terrestrial television was transformed into a distinct dual-market structure with two types of players: a pure PSB with licence funding and extensive must-carry obligations, and purely commercial broadcasters, financed by advertising and/or subscriptions and with only limited content-related provisions.

Both Norwegian and Swedish media policy is aimed at securing a diverse and pluralistic market for terrestrial television. But whereas Swedish media policy has aimed to curtail market failure by way of external diversity, Norwegian policy has sought to ensure a minimum level of internal diversity through content provisions exchanged for indirect financial support. The question we ask in this article is which (if any) of the policy avenues examined here—the liberal Swedish model or the interventionist Norwegian model—has been most successful in ensuring diversity in the market for terrestrial television?

To answer this question, we operationalise diversity through two broadly conceptualised lenses, one evaluating external pluralism (the variation of sources in the television market (McQuail 1992)) and one evaluating internal pluralism (diversity of form and content (Hallin and Mancini 2004)). External pluralism is analysed here along the competition axis—the number of players in the market, ownership concentration and audience shares. Internal pluralism is analysed along the content axis—as the diversity of channel profiles on offer, and the diversity of content contributed to the overall market uniquely by the commercial PSBs. Because we are looking at the impact of commercial public service television on the broadcasting sectors of these two countries, external pluralism measures are restricted to the sector in question (rather than the media system as a whole). As the aim is to evaluate the role of regulation in maintaining diversity within the sector, internal pluralism refers to the form of content provided by the commercial PSBs within these sectors.

Methodologically, the analysis builds on formal policy documents, annual reports, industry data, content analyses and data on audience shares. The systematic accounts of the development of the television market carried out by both industry and public agencies in Norway and Sweden provide a solid empirical ground for analysing the problems addressed in this article.

In the following, we first analyse the impact of Norwegian and Swedish DTTV policies at the external level—looking at the number of players in the markets, ownership concentration and the distribution of audience shares—before investigating internal diversity features operationalised as the distribution of channel and content profiles in the two television markets. The analysis is followed by a discussion and some concluding remarks.

External Pluralism

External conditions are often considered explanatory for the overall diversity of media systems. Many studies of media diversity infer from structural framework conditions such as the political, economic, professional and regulatory forces that shape media content (e.g. Doyle 2002; McManus 1994). This includes the intensity of competition within the industries; the relevance of market size; characteristics of ownership distribution and the economic condition of the sector (Benson 2009). Regulation of media ownership is therefore based on the idea that regulation is necessary to discourage ownership from limiting the diversity of ideas, and because content homogeneity can damage the political system (Doyle 2002). As such, there needs to be a plurality of suppliers available for consumers to choose from.

In comparison to the analogue terrestrial system, which in both Norway and Sweden had room for only three channels, DTTV has dramatically increased the potential of providing an externally pluralistic TV landscape. In 2017, the digital terrestrial networks of Norway and Sweden held 39 and 50 national channels, respectively. Eight channels in Norway and six in Sweden enjoyed the free-to-air privilege. Access to the remaining channels of the terrestrial system required paid subscription. An overview of the companies enjoying national broadcasting rights in these terrestrial television networks as of 2017 is presented in Tables 1 and 2.

TABLE 1 The television landscape in Norway, 2017

Company	Domicile	Channels
Egmont	DK	11
Discovery Networks	US	9
NRK	NO	4
Modern Times Group	SE	3
Walt Disney	US	3
BBC	UK	2
Twenty-first Century Fox	US	2
A&E Television Networks	US	1
Foreningen Frikanalen	NO	1
Sveriges Television	SE	1
TV Visjon Norge AS	NO	1
Viacom	US	1
Total	–	39

Source: RiksTV (2017) (adapted by authors).

Note: Companies licensed to broadcast national DTTV, 2017.

TABLE 2 The television landscape in Sweden, 2017

Company	Domicile	Channels
Bonnier	SE	11
Discovery Networks	US	9
Modern Times Group	SE	5
Sveriges Television	SE	5
Turner Broadcasting System	US	4
Viacom	US	4
BBC	UK	3
Twenty-first Century Fox	US	2
Walt Disney	US	2
A&E Networks	US	1
Al Jazeera Media Network	QA	1
Axess Publishing	SE	1
H&C TV	UK	1
Scripps Networks	US	1
Total	–	50

Source: Swedish Press and Broadcasting Authority (2017b) (adapted by authors).

Note: Companies licensed to broadcast national DTTV, 2017.

In both countries, DTTV has attracted ample attention from both domestic and international broadcasters. As of 2017, the 39 national broadcasting licences in the Norwegian DTTV network were distributed among 12 different broadcasters, of which 3 were domestically controlled. Norwegian-owned broadcasters accounted for six channels in total. US-based broadcasters accounted for 16 channels, whereas 15 channels were owned by broadcasters from either Denmark or Sweden. The biggest players on the Norwegian DTTV market in terms of number of individual licences were Egmont (DK) with 11 licences and Discovery Networks (US) with 9. Between them, these 2 companies accounted for 20 channels, or roughly 50 per cent of the total number of national channels in the Norwegian terrestrial network. The PSB NRK (NO) was licensed to broadcast four channels. The Danish media group Egmont is the owner of the TV2 Group (TV2 Gruppen), which was acquired from the Norwegian Amedia in 2012. Discovery Networks has been a major player on the Norwegian television market since 2013 when it took over the Scandinavian broadcasting group SBS from the German ProSiebenSat.1.

In Sweden, the 50 channels licensed for national DTTV broadcasting between 2014 and 2020 were owned in 2017 by 14 different media companies or owner groups, of which 5 were Swedish-based. Swedish companies accounted for a little less than half (22) of the total number of licences (see Table 2). The majority of the rest (23 out of 28) were controlled by US companies. The biggest broadcasters on the Swedish DTTV market in terms of number of individual licences were Bonnier (SE) with 11 licences, Discovery Networks (US) with 9, and MTG (SE) and PSB SVT (SE) with 5 each. Between them, these 4 players accounted for a total of 30 channels, or 60 per cent of the total DTTV market in Sweden. The Bonnier Corporation has been the largest commercial actor on the Swedish television market since 2007, when it assumed full control of the TV4 Group (TV4 Gruppen), including the “then-hybrid” TV4. In 2008, Bonnier also acquired C More Entertainment (which controls pay TV channels in Sweden, Norway, Denmark and Finland).

The general conclusion regarding the external pluralism of the Norwegian and Swedish DTTV markets is that there is a relatively high level of plurality in terms of the number of individual broadcasters. Norwegian and Swedish television audiences may choose between nationally terrestrially broadcasted channels from 12 and 14 broadcasters, respectively—as compared to 2 in the pre-digital era. In this respect, the plurality of the two television markets has clearly benefited from the introduction of DTTV.

In both countries, a considerable majority of the channels in the terrestrial networks are nonetheless controlled by four companies: Egmont, Discovery Networks, NRK and MTG in Norway; and Bonnier, Discovery Networks, SVT and MTG in Sweden. If we consider the relative strength of different broadcasters, the combined dominance of these companies becomes even more pronounced. In 2015, the “big four” of the Norwegian and Swedish television markets accounted for 88 and 93 per cent, respectively of the total viewership (see Table 3). This makes the Norwegian and Swedish television markets two of the most concentrated in Europe as far as ownership is concerned (cf. Sanz 2012). In both countries, the current level of ownership concentration—when measured in terms of audience shares—does not deviate significantly from that of the analogue era. To this extent, the introduction of DTTV in Norway and Sweden has been unsuccessful in terms of breaking up the power position of the largest networks.

TABLE 3 Ownership concentration in the Norwegian and Swedish television markets

	Analogue era		Digital era			Analogue era		Digital era
Norway	2000	2005	2010	2015	Sweden	2000	2005	2010	2015
1. NRK	41	44	41	40	1. SVT	44	40	35	36
2. Egmont	32	29	27	26	2. Bonnier	27	26	29	31
3. Discovery	10	11	10	15	3. MTG	20	14	17	15
4. MTG	8	6	10	7	4. Discovery	6	10	9	12
The biggest owner	41	44	41	40	The biggest owner	44	40	35	36
The two biggest owners	72	73	67	67	The two biggest owners	71	66	64	67
The four biggest owners	90	90	87	88	The four biggest owners	97	89	90	93

Sources: medianorway (2017a) (original source: Kantar TNS); Nordicom (2017) (original source: MMS AB) (adapted by authors).

Note: Market shares of the four largest broadcasters, 2000 and 2015 (audience shares in per cent).

The most noticeable feature when it comes to the development since the analogue era is perhaps the similarities between the two markets. In both Norway and Sweden, the national PSB has maintained its position as the largest broadcaster in terms of total market shares. Similarly, the companies controlling the “still-hybrid” TV2 and “former-hybrid” TV4 have secured their number two positions—thereby remaining the largest commercial player. In both countries, the PSB and the leading commercial broadcaster combined accounted for two-thirds of the total viewership in 2015. The duos dominating the two television markets in the analogue era have thus been able to maintain their combined market shares also in the multi-channel market.

To some extent, the continued supremacy of the analogue market leaders can be explained by the widening of their respective channel portfolios. DTTV enabled both the PSBs and the commercial incumbents to launch niche channels. The Swedish Bonnier group has chosen to expand also by means of acquiring new channels.

The most important reason for the sustained dominance of NRK and the TV2 Group in Norway and SVT and Bonnier in Sweden is, however, the continued popularity of their respective flagship channels. As of 2015, NRK1 and TV2 reported a combined market share of 50 per cent in terms of total audiences in Norway (see Table 4). In Sweden, SVT1 and TV4 reported a market share of 45 per cent. Despite the dramatic increase in the number of channels available, Norwegian and Swedish viewership has remained remarkably loyal to the dominant channels from the analogue era.

TABLE 4 The “big five” of Norwegian and Swedish television

	Analogue era		Digital era			Analogue era		Digital era
Norway	2000	2005	2010	2015	Sweden	2000	2005	2010	2015
1. NRK1 (NRK)	38	40	33	32	1. SVT1 (SVT)	20	24	23	24
2. TV2 (Egmont)	32	29	21	18	2. TV4 (Bonnier)	27	23	19	20
3. TV Norge (Discovery)	10	11	7	7	3. SVT2 (SVT)	24	14	7	7
4. NRK2 (NRK)	3	4	5	5	4. Kanal 5 (Discovery)	6	9	7	5
5. TV3 (MTG)	8	6	6	4	5. TV3 (MTG)	11	11	8	5
No 1	38	40	33	32	No 1	20	24	23	24
No 1–2	69	70	53	50	No 1–2	47	47	42	45
No 1–5	90	90	71	66	No 1–5	88	81	64	62

Sources: medianorway (2017a) (original source: Kantar TNS); Nordicom (2017) (original source: MMS AB) (adapted by authors).

Note: Market shares of the most popular television channels, 2000–2015 (audience shares in per cent).

It is nonetheless important to recognise that TV4 has been decidedly more successful than its Norwegian counterpart, TV2, in upholding its audience share in this period of increased competition. Between 2000 and 2015, TV4’s market share dropped 7 percentage points, from 27 to 20 per cent. During that same period, TV2’s market share dropped 14 percentage points—or twice as much (from 32 to 18 per cent). The relative “success” of TV4 in terms of maintaining its audience share has coincided with the lifting of its public service obligations. The market shares lost in the twenty-first century may all be assigned to the hybrid period (i.e. until 2008). Since then, TV4’s market share has remained steady at around 20 per cent. TV2, which has been obligated to provide certain types of contents also in the digital era, has fared decidedly worse in the increasing competition from other channels.

That said, the Norwegian hybrid channel still accounted for approximately one-third (31 per cent) of the total viewership of the market for commercial broadcasting in Norway in 2015—the same market share as the purely commercial TV4 (32 per cent). The two channels remain, by far, the most popular private advertising-financed TV channel in Norway and Sweden, respectively.

Internal Pluralism

Following the discontinuation of the PSB monopolies in the early 1990s, the terrestrial networks of Norway and Sweden carried three channels each, two provided by the PSB and one by a commercial broadcaster, a hybrid. Despite different financing models (whereas the PSBs were licence-fee financed, the hybrids were financed by advertising), all channels were characterised by an omnibus profile. As such, the plurality of the Scandinavian television landscape was secured politically by means of internal diversity. This meant individual channels catering to the “whole” audience—with a broad and varied content profile.

With the introduction of DTTV the traditional strategies of both legislators and broadcasters were adjusted. Faced with a dramatically increased number of competitors, the incumbents of the two television markets responded in a similar fashion. PSBs NRK and SVT both chose to concentrate the more popular programming on the main channel (NRK1/SVT1), thereby reorienting their number two channels towards a narrower and more “highbrow” audience with a schedule dominated by news, documentaries and cultural programmes. Both PSBs also launched a number of new channels, all of which had a distinct niche character (e.g. children’s programming [NRK Super/SVT B], youth programming [NRK3] and educational programming [SVT Kunskapskanalen]).

An even stronger diversification strategy was employed by the commercial broadcasters. As of 2017, the TV2 Group in Norway and the TV4/C More Group in Sweden each comprised 11 channels licensed to broadcast in the terrestrial network. While TV2 still operated on a public service agreement, this only pertained to its main channel. With the exception of TV2 Nyhetskanalen (TV2’s nationally distributed “News Channel”), the niche channels of the two broadcasters are almost exclusively devoted to counter-programming on the entertainment and sports side of the content spectrum.

The plethora of new channels have been employed as countermeasures towards the influx of the entertainment-oriented programming proffered by the various broadcasters entering the terrestrial networks following the analogue switch-off. MTG and Discovery Networks, which in 2017 accounted for a total of 26 channels in Norway and Sweden –making them the prime competitors of the TV2 and TV4/C More groups—provide channel profiles oriented almost exclusively towards (primarily US produced) entertainment and sports. New channels competing with content characterised by traditional public service ambitions, such as national news, in-depth current affairs and cultural programming, have been largely non-existent in both countries. An overview of the content profiles of the national terrestrial television networks of Norway and Sweden in the analogue (2000) and digital (2017) eras is presented in Table 5.

TABLE 5 Channel profiles of the Norwegian and Swedish national terrestrial television networks, 2000 and 2017

	Norway		Sweden
	Analogue era (2000)	Digital era (2017)	Analogue era (2000)	Digital era(2017)
Omnibus channels*	3	3	3	2
Mixed entertainment	–	12	–	13
Sports	–	6	–	7
Children’s programming	–	4	–	7
Documentaries	–	4	–	12
Films and series	–	4	–	4
Highbrow programming	–	1		1
International news	–	1	–	3
Educational/factual programming	–	–	–	1
National news	–	1	–	–
Religious programming	–	1	–	–
Open channel	–	1	–	–
Youth programming	–	1	–	–
Total	3	39	3	50

Sources: RiksTV (2017); Swedish Press and Broadcasting Authority (2017b) (adapted by authors).

Note: The categorisation builds on marketed descriptions of the profile of individual channels provided by the broadcaster. *The channels categorised as “omnibus channels” are—for Norway—NRK1, NRK2 and TV2 in 2000, and NRK1, TV2 and (Swedish) SVT1 in 2017; and—for Sweden—SVT1, SVT2 and TV4 in 2000, and SVT1 and TV4 in 2017.

After roughly a decade of DTTV, Norwegian TV2 and Swedish TV4 remain the only commercial channels in the respective markets that may be characterised as omnibus channels. Despite different legal frameworks, both channels have thus maintained a broad content profile in the digital era. As shown, both TV2 and TV4 have been able to maintain their position as the biggest commercial channel, largely due to this omnibus content strategy. Public service, however, also entails contribution to the public agenda and democratic conversation. As such, commercial hybrids have always been subject to content provisions specifying regular news and current affairs production. This is where the legal premises of operations differ between the two channels. While TV2 still operates on a public service agreement, TV4 is no longer obligated to uphold its position as a hybrid channel.

The content profiles of TV2 and TV4 2000–2015 are presented in Tables 6 and 7. Self-reported content profiles presented annually by TV2 give no proof of any dramatic changes between 2005 and 2015 (Table 6). Throughout the period, programming categorised as either “News” or “Human and social issues” has accounted for between 19 and 26 per cent of the total content broadcasted. While daily news programming remains stipulated in the broadcasting agreement, TV2 is no longer obligated to contribute to media diversity through programming aimed at marginal audience groups. This is reflected in the channel output, as cultural programming (including, e.g. music, religion and philosophy) has disappeared from the schedule and children’s programming has been reduced.

TABLE 6 Content profile of TV2, 2005–2015 (per cent)

	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
News (incl. weather)	10	10	9	8	7	7	10	9	9	8	7
Human and social issues	16	16	17	16	13	12	14	13	13	13	16
Children’s programming	8	8	9	9	9	9	6	7	7	6	1
Cultural programming	3	2	2	0	2	0	0	0	0	0	0
Drama	22	19	22	23	27	28	25	23	20	21	26
Shows	12	12	13	13	14	16	18	22	27	23	22
Comedy	10	10	10	11	14	12	10	8	6	8	12
Sports	9	10	8	9	7	9	8	7	6	9	4
Crime, action, adventure	8	11	9	9	7	6	7	10	9	10	10
Documentary, nature	3	3	2	2	2	2	1	2	4	2	2
Total	101	101	101	100	102	101	99	101	101	100	100

Source: medianorway (2017b) (original source: TV2) (adapted by authors).

TABLE 7 Content profile of TV4, 2005–2015 (per cent)

	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
News	10	10	11	12	12	11	9	8	9	7	8
Human and social issues	3	3	2	5	2	3	3	1	1	1	1
Misc. factual programming	5	9	7	6	7	6	5	5	4	3	6
Children and youth programming	3	5	5	4	4	4	3	4	2	2	1
Cultural programming	0	0	0	1	0	0	0	0	0	0	0
Shows	17	13	14	11	12	16	19	19	22	23	27
TV series	28	20	27	28	26	21	21	20	20	25	21
Reality TV	5	6	5	3	13	18	10	18	11	9	12
Movies	9	11	9	12	11	10	15	12	14	13	11
Sports	7	7	8	8	6	7	6	9	9	9	6
Misc. entertainment programming	10	7	5	7	6	4	7	5	6	6	5
Other	1	1	0	1	1	0	0	0	1	1	1
Total	101	101	101	100	102	101	99	101	101	100	100

Source: Swedish Press and Broadcasting Authority (2016, 73) (adapted by authors).

Data on the content profile of TV4, which has been annually assembled by the Swedish Press and Broadcasting Authority, show a somewhat different pattern. Table 7 illustrates a decline in programming categorised as either “News,” “Human and social issues” or “Miscellaneous factual programming,” from an average of 21 per cent in the period 2005–2009 to 14 per cent in the period 2011–2015. The trend is confirmed by analyses presented by the Swedish Press and Broadcasting Authority, which suggest that the diversity of the information-oriented programming broadcasted by TV4 (i.e. the presence of different types of programmes devoted to information) has decreased significantly since 2010 (2016, 76). The lifting of content provisions from the hybrid era has thus gone hand in hand with a gradual reorientation of the channel’s content profile towards more entertainment-oriented programming. The most notable shift happened in 2014, when TV4 chose to discontinue its local newscasts and close down its local news stations—a requirement that had been lifted a few years earlier (Ohlsson 2015).

Discussion

Over the past few decades, media policy researchers have presented ample evidence that national television markets, and particularly markets with limited linguistic reach left to market-driven principles alone, will almost inevitably result in market failure, in as much as programming that is not commercially viable will simply not be produced (McManus 1994; McQuail 2003). The story of the introduction of DTTV in Norway and Sweden, as presented in this article, provides further support for this conclusion. Contrary to the hopes and expectations of the policymakers, the transition from analogue to digital terrestrial TV has not resulted in a rise in the number of channels devoted to domestic issues and national culture. In both countries, the increased broadcasting spectrum made available by the DTTV technology has almost exclusively been filled with foreign entertainment programming—duplicating presumed viewer preferences to maximise advertising attraction (cf. Steiner 1952). When it comes to non-entertainment nationally produced content, Norwegian and Swedish television viewers have by and large to turn to the same three channels that made up the national television markets in the analogue era.

A key policy objective of the investment in DTTV technology was to decrease the concentration of ownership. Looking at the number of actors involved in these two TV markets today, ownership concentration has remained high. The PSB upholds its leadership position in terms of total market shares. In the commercial sector, the largest private broadcaster has maintained its dominance also in the multi-channel environment. To this extent, DTTV has failed to increase the diversity of the television markets of the two countries.

There are, however, differences between the two markets. The most important concerns the development of the privately owned hybrid channel. With the analogue switch-off in 2008, Sweden chose to lift the public service obligations of TV4, placing the channel on a more equal footing with all the other private channels licensed to broadcast in the digital terrestrial network. TV4 has adapted to the deregulated environment by means of a clear shift towards a more limited and less diversified information-oriented programming. The local news division, which for a number of years constituted a strong competitor to its PSB counterpart, has been discontinued. The more market-oriented approach has been successful from a commercial perspective. Despite the increase in the number of competing channels, TV4 has been able to protect most of its market share. As a result, TV4 has positioned itself as one of the most profitable media businesses in Sweden (Swedish Broadcasting Authority 2017a).

The tale of TV2 is somewhat different. Unlike its Swedish counterpart, TV2 entered the multi-channel era as a commercial public service channel, with certain content provisions upheld by Norwegian authorities. Its continued contractual agreement with the state has left the channel in a powerful bargaining position. TV2 has mounted the exit threat in two rounds of renegotiations of its licensing agreement (in 2010 and in 2016), leading to improved financial conditions—first in the advertising market (due to a softening of rules) and second in the cable market (in terms of reduction of public service provisions and remunerations for distribution). From a purely commercial perspective, however, the continued hybrid status appears to have been a disadvantage for TV2. Between 2005 and 2015, TV2 lost a third of its market share in terms of total viewership (dropping from 29 to 18 per cent). For a privately owned channel funded primarily by advertising revenue, this presents a problematic development.

Comparing the path of TV2 with that of TV4, it is evident that the “deregulated” TV4 has been more successful in adapting to the multi-channel environment than its “still-regulated” neighbour. Against this development, it is interesting to observe that the Norwegian state is opting for even stronger diversity demands on its hybrid licence. A revised issue of the remit (KKD 2017) reintroduced traditional public service obligations, including daily news programming, Norwegian language content for children and a demand for diversity programming. These public service commitments are to be met with a compensation of NOK 135 million annually—effectively giving state support to TV2, which was the only channel that applied for the licence. As the government signals a return to 1990s-level provisions for the Norwegian hybrid, the policy-induced prospects for television pluralism in Norway stand in stark contrast to the Swedish market solution—moving the Norwegian policy climate in an even more protectionist direction, lobbied for by industry incumbents (NOU 2017, 7). The fear of market failure is therefore still very much alive in Norwegian media policy, motivated by calls from central stakeholders to ensure the survival of legacy media in a period of “crisis” (NOU 2017).

The diverging policy paths embarked upon by Norwegian and Swedish policymakers raise the question of the future of broadcasting policy in the Nordic media system (Syvertsen et al. 2014). Traditional television viewership is declining sharply, particularly among younger audiences. Between 2011 and 2015, the reach of broadcast news dropped by approximately 20 per cent in both Norway and Sweden—a decline almost equal to that of printed newspapers (Ohlsson and Facht 2017). With the rise of the multi-platform environment, where foreign content services such as Netflix, Hulu, HBO and Amazon assume increasing shares of domestic markets, the question becomes what policy avenues to pursue for former duopolistic television markets. If broadcast television is indeed a medium that audiences are abandoning, why and how should these markets be regulated—let alone be publicly supported? How policy is to determine the appropriate levels of diversity within national television markets given these developments, and identify the remits, regulations and/or financial support systems that can sustain public service broadcasting while popular support declines, not only becomes a question of external pluralism—it also challenges the traditional routes of policy intervention in the Nordic media model.

Conclusion

The comparison of the Swedish and Norwegian regulatory regimes for the commercial television sector presented in this article provides insight into the measures by which media diversity is sought in the broadcasting arena. As policy can drift (Picard 2016), and tends to be reactive, often acting too late in response to technological developments (Lund 2016), such an exercise provides a sensitising tool for evaluating the relative success of regulatory measures to achieve policy aims. Looking at the rapid technological development of media markets today, liberalisation seems like an easy, hands-off approach to hybrid television systems, while the protectionist route entails complicated policy procedures involving high degrees of corporatism. Future prospects also suggest that regulating national broadcasting systems will become increasingly difficult for states to handle alone, particularly with the rise of networked technologies operating at the platform level. Ultimately, commercial operators are dependent on sufficient income to survive. Growing competition from global competitors hence raises new questions regarding government responses to threats of market failure in the broadcasting sector. It therefore remains to be seen which of the policy avenues examined here, the Norwegian protectionist approach or the Swedish hands-off approach, will succeed in maintaining a diverse television market.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Research Council of Norway [Norges Forskningsråd] [grant number 230744].

Notes on contributors

Jonas Ohlsson

Jonas Ohlsson (corresponding author) is Associate Professor and Director of Nordicom, University of Gothenburg. His main areas of research include media economics and policy and audience studies.

Helle Sjøvaag

Helle Sjøvaag is Professor at the Department of Media and Social Sciences, University of Stavanger, and researcher at the Department of Information Science and Media Studies, University of Bergen. Her main areas of research include journalism and media policy. Email: [email protected].