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Value for money
Thanks to its financing model, SRG SSR can produce its programmes independently and reliably. The downside is that advertising and sponsorship are restricted by law, which prevents SRG SSR from taking advantage of alternative income sources.
With 6,000 staff, SRG SSR is the largest broadcaster and the second-largest media enterprise in Switzerland. Its activities affect the Swiss economy at every level as it uses public and private services, products and materials in large amounts at a number of locations. Moreover, SRG SSR radio and television programmes offer an attractive national platform for sponsors and advertisers.
Swiss households that receive radio and/or television programmes must pay a licence fee. This fee makes up most of SRG SSR’s annual income:
- Just over two thirds of income comes from licence fee payments.
- Just under a third comes from commercial and other revenues.
There are two sides to this financing model. While it ensures journalistic independence, it also results in restrictions on advertising and sponsorship. SRG SSR is not allowed to take advantage of new online advertising and sponsorship platforms, which are posting double-digit growth and replacing classic television advertising to some extent.
Licence fee trend
SRG SSR has not been able to profit from the increase in licence fees since 2000. This is because the 2003 adjustment in particular brought an exemption from licence fees for people receiving supplementary state pension and disability benefits, and the 2007 adjustment was primarily beneficial to private radio and television companies through fee splitting.
- The annual radio licence fee has risen by CHF 7.20 since 2000 to CHF 169.20 in 2009. This equates to a nominal increase of 4.4% (the real change, taking inflation into account, is -4.0%).
- The annual television licence fee has risen by CHF 22.80 since 2000 to CHF 292.80 in 2009. This equates to a nominal increase of 8.4% (the real change, taking inflation into account, is 0%).
In spite of its tighter finances, SRG SSR has systematically exploited synergies and passed measures to ease the annual cost burden. The objective of a balanced budget is also stipulated in the SRG SSR Business Strategy: «On average, it achieves its minimum objective of a balanced budget in the financial planning years – but without the one-off effect of the change of the pension plan system and adjustments to the technical interest rate. The financial strategy derives specific objectives from this (sufficient equity, debt ceiling, sustainable cash flow, etc.) SRG generally operates in the black.» (Business Strategy SRG SSR, Objective 5)
Equality between the language regions
A central aspect of SRG SSR’s public service remit is equality between the language regions. However, this comes at a price, since supplying four language regions with programmes of the same quality has a direct impact on licence fees. These would be almost 40% lower if SRG SSR were to produce its programmes in just one official language.
The licence fees are frequently the subject of public debate. Many commentators like to compare the Swiss fees with those charged in other countries. Such comparisons show that more populous countries have lower fees because fixed staff and infrastructure costs can be spread between more people or households there than is the case in countries with smaller populations. The following factors must be borne in mind when comparing countries to ensure a like-for-like comparison:
- the size of the population
- the number of language communities or the need to produce separate programmes
- the country’s topography
- the national wage level and inflation rate, which affect staff and distribution costs in particular
- the financing options via commercial revenues, as well as the size and structure of the advertising market and any restrictions on advertising
- direct contributions and subsidies received from the State in addition to income from licence fees, as well as any further income sources
SRG SSR’s income is around CHF 1.6 billion a year. This money is used to produce a total of 18 radio stations and 7 television channels in four language regions. It can thus hold its own in any comparison with other public-service broadcasters, since its funding, while generous by Swiss standards, appears relatively modest in an international context.
Transparency and efficiency
On the one hand, rigorous internal controls apply to the use of licence fee income. On the other, a duty of accountability applies vis-à-vis external bodies such as the Federal Council and the Federal Department of the Environment, Transport, Energy and Communications (DETEC). SRG SSR’s annual report not only discloses the financial figures for the past year, it also fulfils this duty of accountability in a forward-looking way with a five-year plan.
The Swiss Federal Audit Office (SFAO) audited SRG SSR’s finances and efficiency and concluded that it makes prudent and focused use of its licence fee income. The findings of the audit were published in a detailed report in 2006.