Advertising? Household levy? Licence fee? Worldwide, many public media organisations are asking the same question: how should we be funded? 

Funding is one of the most significant and pressing issues facing public media today. Operating through a sustainable, viable, and healthy funding mechanism that safeguards the independence of public media is increasingly difficult, with many public media organisations – big and small – weighing up which funding model works best for them.

The different models on offer are varied, and all have their strength and weaknesses. The licence fee – for so long considered the most effective form of funding – is now argued by some to be outdated and unfit for the 21st century. But do other more modern funding mechanisms provide the same security and longevity?

There are numerous considerations to weigh up. Does the funding model guarantee independence? Does it provide financial stability? Does it ensure continuing value for money? Is it futureproof, considering the enormous and rapid market changes happening in the media sector currently? Is it progressive, ensuring a connection between the public and the media organisation, but which does not overcharge citizens?

Some public media organisations are in a financial crisis and desperately seeking solutions. This resource assesses the diversity of funding models currently employed across the world and evaluates their efficacy.

Critically, it must be noted that very few – if any – public media organisations access funding through one stream alone. Many draw on multiple streams. This mixed model is arguably the most secure and sustainable: it ensures organisations are not dependent upon a single funding mechanism but have a diverse portfolio of revenues. It protects organisations against political instability, or fluctuations in the market.

Click on the tabs below to learn about each funding model


For many public broadcasters, advertising is a viable method of independently sourcing additional funding and PSM have long recognised how this commercial method may aid in fulfilling their public service remit. Advertising may also contribute to other benefits, such as lowered licence fees for the public, as is the case with the BBC and advertising on its website for users outside the UK.

PSM are well-placed to offer value to their advertisers due to their reach, diversity, high-quality content, and public trust. KBS in South Korea, for instance provides global opportunities for its advertisers, with its KBS WORLD channel reaching 140 million households in 113 countries. Meanwhile, SBS – “Australia’s most diverse media brand” – offers advertisers the chance to reach 99% of the country’s population.

But advertising comes with challenges for public broadcasters. Importantly, there is a balancing act that must be maintained between upholding public interest values alongside commercial ventures, as noted by participants of PMA’s last PSM Unpackedroundtable on commercial funding. While advertising may support a public broadcaster’s public service remit, it should not fully sustain it. Advertising strategically forms only a part of PSM revenue to ensure that public media remain answerable to the public, rather than to their commercial interests. Increased commercial interests may affect not only content output and quality but may also deteriorate the public’s trust in their public broadcaster.

Meanwhile, changing audience consumption patterns also mean that advertisers are shifting from traditional broadcasting to online platforms.Last year, SABC in South Africa called for limits on the amount and scope of revenue that comes from advertising, programme sponsorships, and infomercials for private subscription broadcasters and over-the-top platforms.

Furthermore, legal limits on advertising – covering considerations on content, duration, and airtimes – may prove challenging for public broadcasters. Advertising limits for public media can be found in many countries, such as in Germany, the Netherlands, and Australia.

And in markets where the biggest advertisers are government bodies, advertising may create a dependency, especially when governments threaten to pull advertisements as a form of political pressure.

Alternative Tax

The alternative tax is a unique funding mechanism, as it raises the funds for public media by taxing industries rather than the public. The government is still involved, mandating the tax. But unlike other tax-based systems which impact the public – either through a levy on households or incomes – this money bypasses the public and instead comes directly from a particular industry. In an indirect way, however, it does cost the public, as the expense of the tax is likely to be passed onto consumers.

This is the form of funding used in Spain. A 2009 law saw the public broadcaster, RTVE, funded by a combination of government subsidies as well as a tax levied against private channels (3% of gross income), payment companies (1.5% of gross income), and telecommunications companies (0.9% of gross income). In total, this provides approximately €600 million for RTVE. The government also intends to impose a tax on streaming services, although this has been pushed back until 2023.

In Thailand, they make similar use of an external tax, but instead this is directed towards the liquor and tobacco industries. The so-called ‘sin tax’ is a 1.5% levy on revenue and is capped at 2 billion baht, with additional funding sourced from elsewhere. The external tax is an alternative way of funding public media but not without its problems. The Spanish government had to fight the legality of the tax in the Spanish Supreme Court, although they did ultimately win. And RTVE has faced significant funding troubles over a number of years. But it is a secure and independent funding route, which aids public media’s imperative to be free from high levels of government interference.

Direct Public Media Tax

Annual taxation is a direct method of public funding. It can take various forms and requires different criteria depending on the context. It can be income-dependent, like in Finland, where the annual ‘Yle tax’ (a Value Added Tax charge of 10 %, which is deducted from the gross amount and has a maximum payment of €163 a year), is collected alongside income tax into a fund that is excluded from the annual state budget.

Increasingly, specific public media taxes are becoming more device-independent, such as in Sweden, which adopted a public media fee in 2019 under the belief that public radio and television play a key public service role, and must therefore be funded collectively, regardless of individual use. The fee is collected via a ‘tax slip’ and, like in Finland, is income-dependent: it charges 1% of the taxable income of anyone over 18 years-old, with a limit of SEK 1,300 per person, per annum.

More public media organisations are adopting this funding model. It is future-proof in that it does not rely on the ownership of a television or radio, for example. Such a model can also offer safeguards to editorial and financial independence so long as it remains separate from the national budget and direct government influence. This is partly achieved in some jurisdictions by keeping negotiations about the rate of tax separate from election periods, limiting opportunities for it to be used as a so-called “political football”. Ultimately, this model offers an assurance of independence as the PSM is funded directly by – and therefore accountable to – its owners, the taxpayers.

The most recent PSM to adopt a tax is Denmark (DR), as of 2022.

Government or Federal Funding

This model sees funding for public media organisations come directly from the state as part of the government’s overall public spending. Rather than a specifically earmarked funding stream (such as the licence fee), this model can imply a more direct link between the government and media.

This type of funding can sometimes lead to media organisations being construed as state media, rather than public media. In some instances, this holds true. For example, the China Media Group (CMG) sits within the Publicity Department, from which it receives its funding. The CMG lacks independence. It is just an extension of the government itself, with its international arm used as a tool of soft power.

However, many public media organisations which also receive their money directly from the government are equipped with other mechanisms – legislative and regulatory – that help to ensure their independence. For example, Radio New Zealand (RNZ) receives its money through NZ On Air, an autonomous Crown entity. Because of this, RNZ and the government are kept at “arm’s length.” Estonia’s public broadcaster, ERR, is also funded out of the state budget, but maintains its independence through its Press Ethics Adviser. The Seychelles Broadcasting Corporation is funded through the government budget, over a three year period, which “does not make it dependent on the politicians of the day for approval of its funding for the coming year.”

Funding through government budgets can blur the lines between whether a publicly owned media organisation can be defined as either state or public. Even in cases where an organisation is evidently public media – in that it upholds impartiality and accountability – it can still be vulnerable to government overreach. This can be seen with RTHK in Hong Kong: once an independent, public media organisation, it has been a victim of an increasingly authoritarian ruling elite, which used its leverage as the broadcaster’s sole stakeholder to turn it into a government mouthpiece.

Household Levy

A key characteristic of the household levy is its universal application to all residents: rather than being income or device dependent, the levy is applied at the same cost to each household, regardless of how many people live within the home or whether they make use of public broadcasting or not. The household levy is a newer model of funding public media, taking into consideration new technologies like smartphones and tablets, and their capabilities to access public media content beyond traditional media.

Germany and Switzerland both have well-known examples of the household levy. In Germany, the monthly household levy has been applied since 2013, with a few exemptions to paying it available. The current fee is €18.36 per month. Companies, institutions and public welfare organisations are also required to contribute towards the financing. Before the household levy, households were required to pay for each device.  In 2019, Switzerland also introduced a household, device-independent charge for public broadcasting. Its current fee stands at CHF 335.00.

The move away from a device-dependent fee has also been linked to the recognition of a public broadcaster’s role as a public service. In Germany, this is known as the “solidarity model”, where the public is expected to fund an “independent, high-quality, and diverse” public media system so that everyone can benefit.

Meanwhile, South Africa is considering the implementation of a household levy. The move away from a licence fee has been touted as a solution to public broadcaster SABC’s financial challenges and low licence fee collection rates.

Licence Fee

The licence fee is considered the traditional funding model for public media and is nearly as old as public media itself. It was first levied in the UK in 1923, one year after the BBC was founded, and cost 10 shillings a year. The licence fee charges people who own a certain type of device a flat rate – traditionally this has been the television, but more recently, it has been expanded to include any device that is used to receive or stream programmes live via an online TV service.

Numerous other public media organisations have adopted the licence fee: South Africa’s SABC, South Korea’s KBS, Ghana’s GBC are some. It is widespread across Europe, providing 60% of funding for public media across the continent according to the EBU – this includes Austria’s ORF or France Télévisions. However, few public media organisations rely on it as heavily as the BBC, or Japan’s NHK, where it makes up nearly 100% of funding. Most organisations operate mixed models, such as Ireland’s RTÉ where the licence fee provides roughly 60% of its budget, with the remainder coming from commercial sources.

But the licence fee has been facing problems. While more secure from government interference than other forms of funding, licence fee negotiations can turn it into a tool for intimidation and used as a “political football” during times of election. Meanwhile, tying the licence fee to one device, such as a TV, can lead to confusion as to the breadth of services that the licence fee actually pays for among the public and politicians alike. One of the biggest challenges for broadcasters like the BBC is therefore ensuring that licence fee payers are aware of the array of services that the fee pays for and its sheer value for money compared to other services. Additionally, in the current climate, with the emergence of subscription services, the licence fee’s sustainability is being questioned. The licence fee is also criticised for its high evasion rates and the fact other funding models can be more equitable if they are tied to property values or income.

Crucially however, the licence fee offers the most direct link between a public broadcaster and a nation’s public, which is imperative to maintain trust and accountability.

Subscription Service

To date, there are no public media organisations that have adopted a specific subscription model – such as those used by Spotify or Netflix – or a paywall – such as that used by the Financial Times. But debates about the future funding of public media are increasingly considering it as an alternative option.

The closest public media funding model to a subscription service would be the US philanthropic model. This consists of charitable donations that supplement federal funding and other sources of income to secure more sustainable financial support for public media initiatives and projects. The Public Broadcasting Service (PBS) receives donations via the PBS Foundation while National Public Radio (NPR) also receives charitable contributions and endowment support via the NPR Foundation.

It is essential that PSMs which acquire this type of funding have robust protections for editorial independence – to ensure that donors do not influence what the organisation covers. PBS provides detailed explanations in its Editorial and Funding Standards & Practices resources on how they deal with this.

Another example is Britbox, an online video streaming subscription service operated by UK public broadcasters BBC and ITV, specialising in British programming. Launched in the UK in 2019 as a Netflix-style TV service, Britbox costs £5.99 per month, and is now also available for international audiences.

While some believe that a subscription model would work out cheaper for citizens, in practice, it could lead to more financial instability for public media organisations, especially if citizens are not required to pay for content that they don’t consume. Its other main weakness would be the severance of the tie between the public broadcaster and the broader public as a whole, which trust ultimately depends on. Some, such as the BBC’s Director-Genral, Tim Davie, are also concerned a subscription service would lead public media to service its subscribers rather than the public at large, with less obligation to provide critical public services like local radio.

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Header image: June 8. 2020: Close up of invoice from german radio and tv broadcast service (GEZ, ARD and ZDF Beitragsservice – focus on center). Credit: Ralf Liebhold/