Thursday, January 9, 2014

Germany: a loophole for a website content goldrush?

Our recent spat with the German TV license hit squad has unearthed a legal construct in German media law precedent that looks almost too good to be true.

"Presumed use" is our translation of the concept "Nutzungsvermutung". If you buy a radio, you are going to use it, right?

Here is how it works.

German public broadcasters charge a license fee for radio and TV.

Nutzungsvermutung justifies making everybody who owns a radio or a TV pay a fee to the public broadcasters.

When commerial broadcasters came in, they first did so from neighboring countries to get around the complex, some say crazy, German regulations.

Commercial TV soon followed, making money from advertising, as did commercial radio.

Despite German citizens now having a choice of broadcasters (foreign based German language radio, local commercial radion and TV), the courts upheld the "presumed use" doctrine which justified the license fee for the public broadcasters.

Then came the computer and the internet.

Putting some stuff online, the public broadcasters managed to get the regulators to include computer use in the "presumed use" doctrine.
To prevent people from trashing their radios and their TVs and getting away with watching a more limited but viable public broadcast offering on the computer, they introduced a standalone license fee for the "evaders".

This laid the legal groundwork for a service no one has as yet dared to try out: in theory, you could set up an internet broadcast offering and ask German consumers for money without having to go through all the work that is a subscription model.

If the German public broadcasters can do it, what stops you from going the same route?

The regulatory framework: if you want to call something a "broadcast service", you fall under state regulator authority and need a broadcast service license. They are famously tight ass in the name of freedom of speech while preventing extremism -- applied bullshit. To obtain a license, you need to show how you generate revenue.

To the best of my knowledge, nobody has tried a generic use fee like the public broadcasters. You can bet the regulator would put your application under the microscope to find a way to deny it. Not being experts, we would expect that they wield the second tenet justifying the privileges enjoyed by the public broadcasters. That second tenet would be "educational value to the population".

It does not look easy to claim current German public broadcasters deliver on this. After all, they have numbskull talkshows that rival their commercial counterparts, and entertainment hosts have become multi-millionaires on the taxpayers euro.
 
The burden of proof would be on you -- enough to make people pick the easy revenue models of commercials or subscription. 

They might deny the license if you do not offer over the air service, although you could still go after cable and satellite customers. 

Assuming you would get your broadcast license, you could set up a collection agency, mail out payment demands and watch the money roll in.

In theory.

Because your license fee demand would be met by a firestorm of public opposition. Because they deem your service crappy? Because you may be foreign owned?

No -- the uprising would be caused by the existing collection agency (and behaving like one) for the public broadcasters.

That agency is horrific.

So horrific in fact that government agencies have warned their civil servants of the unsavory thuggish behavior of the "government affiliated but independent" collection folks.

If all of this looks like too much hassle, you feel as the vast majority of Germans feel when they receive the ever rising payment demands for the public broadcasters.

To recap: if you get that license, you currently have the German courts on your side as far as the "presumed use doctrine is concerned". No citizen has ever succeeded with the claim "there are so many commercial choices that I never watch public TV or listen to public radio".

If, however, you should try and argue that the "presumed use" has nothing, zilch, nada to do with being called a "radio station" or "a TV station", then my friends be nice and give me some of the cash... 0.001 percent will be fine.

How much money is there?

Right now, German public broadcasters rake in around 8 Billion Euros a year, that's the NSA budget for 2013, from fees alone. And they get to sell airtime for commercials on top of that.

The one thing that might derail your plans if you start generating a river of cash: at that point, but not sooner, Germany might throw the "presumed use doctrine" over board because your success would plunge the country into poverty.

Hey, Greek entrepreneurs, feeling like a little tit for tat?


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