Published:
01-Jul-08
Public broadcaster France Televisions (FTV) will have to stop carrying advertising in prime time as early as January next year and will carry no advertising spots at all after analogue switch-off in 2011.
The Commission Copé, the Parliamentary Committee in charge of proposing reforms for the funding and the governance of FTV, made its conclusions public on June 26. The government immediately unveiled which of these proposals should go into the upcoming draft law and which will be amended, ending months of regulatory uncertainty. The main provisions are the following:
- Advertising will stop on all FTV after 8pm as early as 1 January, 2009 (the Parliamentary proposal was September 2009), depriving FTV of the bulk of its advertising resources. From 1 December 2011, after analogue switch-off, spot advertising will be banned all day but sponsorship will remain.
- The revenue losses for FTV (estimated at 450m euros in 2009) will be compensated through a transfer from telecom operators to public broadcasting. A tax of 0.9 per cent on the revenues of Internet Service Providers (ISPs) and mobile operators, estimated at 42bn euros, will provide an estimated 378m euros per year. This new tax will avoid increasing the Government deficit.
- The remainder should be funded through new taxation of three per cent of the revenues of commercial TV broadcasters which should provide an annual 80m euros
- Despite earlier reluctance, the Government will finally increase the cost of the licence fee by the average price index (ie. two to three euros increase per year from the current 116 euros).
Our take...
President Sarkozy's January proposal to end advertising on public broadcaster France Televisions, has now turned into a thorough and increasingly controversial revamping of the regulation of French television industry.
The future new law, to be voted next autumn, is likely to be extremely close to the proposals unveiled last week. The commencement of the post-8pm ad ban as early as January 2009 marks the end of months of speculation. It is likely to cause a shrinkage of the French TV advertising market in 2009 but a strong increase in commercial TV revenues as commercial broadcasters will benefit from extra revenues from former FTV advertisers willing to maintain their television exposure. In a perfect timing, the upcoming transposition of the new Audiovisual Media Service Directive, planned to become effective mid-2009, will relax advertising insertion rules and push ad minutage cap from 6 to 9 minutes per hour, thus giving commercial broadcasters extra advertising capacity to accommodate the extra demand. TF1 and M6 stocks have bounced back after the decisions were made public despite the fact that commercial broadcasters will also contribute to funding the pubcaster.
The government has confirmed that the remit of the FTV will not be changed: no public channel is up for privatisation. The losses caused by the advertising ban will be mainly compensated by a tax on buoyant telecom activities (internet access and mobile communication) on the grounds that telcos are partly growing by exploiting audiovisual content. The trade body of French ISPs has strongly opposed the measure and threatened to make a formal complaint to the European Commission for illegal State aid.
Another controversy has arisen over the last few days since the Presidency has suggested that the Director of the FTV Group would in the future be directly nominated by the government, and no longer by independent TV regulator CSA. Many observers and parties consider it a threat to the independence and impartiality of public television.
France,
