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5. FROM A DUOPOLY TO A DUAL SYSTEM


MTV gets its own channel and licence

During the spring of 1988 the management of Yleisradio developed plans for dividing the channels and started unofficial negotiations with MTV. From Yleisradio's point of view MTV could be rescued from its present quandary and given its own channel as long as Yleisradio received rental payments for the use of the transmitter network plus a new "subsidy for public service". MTV again raised up the question of getting its own operating licence.

The decision on the channel reform was made in 1989: It was agreed that MTV would operate under Yleisradio's licence throughout the 1990s and in return Yleisradio agreed to Channel 3 to become MTV's subsidiary. The issue about MTV's own licence was not settled, however. According to the researcher with Yleisradio, Martti Soramäki, the process leading to new broadcasting legislation and MTV's operating licence was launched specially by political and economical group interest (26). Traditionally the political right had included many who felt that MTV should have been given its own operating licence ages ago. In September 1992, the Minister of Communications appointed chairman of Yleisradio's Administrative Council, Seppo Niemelä, to prepare a proposal for "the role of public service broadcasting in electronic media within the communications policies of the 1990s'. One of Niemelä 's main proposals was legislation outlining the framework of electronic media, whereby public service broadcasting and commercial media were to be kept separate. In Niemelä 's report public service broadcasting was seen as a basic national resource, which needed to be given competitive dimensions on the European scale. Niemelä also proposed that MTV was to be given its own operating licence. The licence was to lay down the company's ownership and to take into account the needs of competition and the possibility of foreign ownership. It was also proposed that commercial broadcasting would defray a subsidy for public service broadcasting, which would decrease the latter's need to raise the viewers' licence fees. In September 1993 the government granted MTV its own operating licence. According to one of its stipulations, significant changes to MTV's ownership would lead to the licence being reconsidered or cancelled.


Re-defining public broadcasting

In the Ministry of Communications the preparations of broadcasting legislation changed to concern Yleisradio alone. Among politicians there was also a growing interest to make changes in the organization of Yleisradio. The government presented to parliament the act on Yleisradio in which it was stated that a more "business-like-strategy" approach should be adopted among the management level of the company. This meant that the emphasis was now shifted from a cultural institution towards a business institution.

According to the Act approved in 1993, Yleisradio Oy was defined to be a public service broadcasting company the stock of which at least 70% was to be owned by the state. The Act no longer required Yleisradio to have an operating permit, but it laid down the nature of its programming policies. Yleisradio was especially entrusted to support democracy by providing diverse information, points of view and discussions on societal issues, also for minorities and special groups. It was to support, create and develop domestic culture and to make its achievements available to all. It should promote the enlightening nature of programming, support activities of citizens and provide devotional programmes. It was also to provide programming for Finnish speaking as well as Swedish speaking citizens on equal grounds. It should provide services in the S mi language too, and where applicable to other groups in the country.

In other words, the Act meant that the political establishment took upon itself the duty of laying down the major guidelines of content in public service broadcasting and the basic organizational structure of Yleisradio. The Act also strengthened the concept of public service broadcasting, for it was defined in the traditional Yleisradio manner as full service and as special tasks carried out by public service. Seen from another perspective, Yleisradio increased its autonomy in relation to the government and the Ministry of Communications. It also reinforced its own position by becoming independent of temporary licence issues.

What had actually happened? Channel 3 had marked a new stage in the relations of Yleisradio and MTV. It had also paved the way for the major decision of the turn of the decade. The political level gave its blessings to deregulation by permitting Yleisradio and MTV to divide the three channels among themselves and to grant MTV its own operating licence. The Finnish public service broadcasting system became stabilized, at least for a while. There was now 1) a public service broadcasting company laid down and defined by law and 2) a commercial private television company MTV operating nationwide. MTV achieved what it had always wanted, to be free of the tenant's role in relation to Yleisradio, although this freedom required the payment of a public service subsidy (27).


Competition by programming

For Yleisradio the new arrangement meant that it was now to compete "seriously" over ratings with MTV. After having its traditional public service approach re-definied, it needed now to concentrate on complementing its programming by adapting market standards. Experiences from abroad pointed out that in a competitive situation between public service programming and commercial programming the commercial channel would get the highest ratings. In order to survive in the competition, Yleisradio took upon itself the goal of an over 50% share of the audience on both channels 1 and 2 together. The competitive strategy was to rescheme the two channels. This took place in 1993. TV1 was to become the main news service channel, whereas TV2 took the role of serving both large target groups and special audiences. TV2 also underlined its national role with regional programmes.

However, Yleisradio did not achieve the intended 50% of the viewers. Even though TV2 exceded its own goal of 20%, TV1 lagged far behind its intended 30%. The researcher Martti Soram ki argues that there were three main reasons for TV1's failures. The entertainment programmes that MTV had aired on the channel were now replaced with informational programming which now had "too large" a share. As experienced in Europe elsewhere, it was exactly the amount of fiction which should have been increased, but TV1 lacked succesful programme series. Another mistake was made when the time-slot of the main news programme was changed. This also caused a downward trend in the ratings. TV2 again was succesful in terms of viewing audiences, because it had replaced the former MTV programmes with fiction and sports, lowering the portion of factual programmes. Importantly it was also able to produce succesful series (28). Interestingly enough, in the privately owned MTV there was a reverse development. In addition to market standards MTV also learned to adapt to the requirements of public responsibility and social legitimacy. Commercialism was not the only answer to the problems of the Finnish broadcasters (29).

Like other European public service broadcasting companies, Yleisradio found itself on the defensive in the 1980s, when confronted with the foreign and domestic threats posed by new technology. Foreign threats were combatted through the joint efforts of the Finnish television system, and the conversion of the system into a model of real competition after 1993 was carried out in a spirit of relatively good consensus. These solutions did not of course stop the course of developments, but this was not even to be expected.


(26)   Soramäki 1994, 38
(27)   In addition there are also private commercial radio stations and networks, able television services and terrestrial Channel 4.   
(28)   Soramäki 1994, 36-38.
(29)   Hellman 1999, 426

"A Longstanding Experiment". The History of the Finnish Broadcasting Model.
Johanna Sumiala-Seppänen, Department of Communication, University of Jyväskylä. 1999

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