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Lilja Alfreðsdóttir is one of the people nominated for Person of the Year.

National Broadcasting Service to be Removed from Advertising Market

Minister of Education Lilja Alfreðsdóttir announced ambitious plans to remove RÚV, the state-run Icelandic Broadcasting Company, from the advertising market. Although no such plans have been formally announced by the government, the Minister of Education wants to open discussion on the proposal. Prime Minister Katrín Jakobsdóttir is open to the idea but wants to see increased funding for the RÚV. An Independent Party MP stated that before deciding on state funding, RÚV’s role and obligations must be clearly defined.

Prime Minister Katrín Jakobsdóttir agrees that it is a realistic possibility to take RÚV out of the advertising market. “That is the arrangement in several of our neighbouring countries but that arrangement has a long history. What I would like to suggest is to examine what effect the change in policy would have on the Icelandic advertising market; that is, whether the more than two billion (US$16 million) that the RÚV receives in advertising revenue would end up going to other national media outlets or whether the money ends up, for example, abroad,” says the Prime Minister.

She wants the RÚV to be compensated financially for the amount it will lose if it leaves the advertising market. “I would like to make up for the budget shortfall by raising the radio fee,” which is paid by all Icelanders. “I don’t think the funding for public media should be part of the government’s budget. ”

Independence Party MP Óli Björn Kárason says that there are two separate issues; on the one hand what should be the level of funding to the state media and, on the other, whether the state should be in an unfair competition with private companies. “One point is to reach a decision as to whether or not to continue funding RÚV. If we are going to do so, let’s do it in a way that has the least negative impact on Iceland’s private media. RÚV’s dependence on advertising revenues destroys and distorts Iceland’s independent media. It is therefore right and natural for RÚV to disappear from the advertising market, not only for that reason,”

“With the so-called revenue loss that may come once RÚV ceases to sell advertising, it’s simply another matter. This has nothing to do with whether or not state-owned enterprises should be allowed to compete unfairly with private companies, in this case the advertising market. The question of funding to RÚV is quite different and relates to the obligations and role RÚV should fulfill, which would reasonably be answered in due course before we start thinking about whether to make up for a loss of revenue, in quotation marks, from advertising sales. I believe it should start with this question. Once that’s decided one can debate whether RÚV needs to secure increased income or whether it will make less money than it currently has,” Óli Björn explains.

Education Minister Lilja says it is unclear when she will announce her plans for RÚV to the Government. “At some point, I will. I am now considering the matter and am looking at how best to realize this idea. I think debate on the issue is important and that the process is best done incrementally.”

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