Spain TV bankrupt?

From David Del Valle in Madrid

UTECA, Spain’s private TV Association, has urged the Government to take the necessary measures to revamp the TV market as “the system is heading for bankruptcy”, according to Maurizio Carlotti, Vice president of Antena 3 TV, member of the Association along with Tele 5, Sogecable, Net TV and Veo TV.

He said that the proliferation of DTT channels and the “unfair competition” from public TVs (by being financed via ad revenues and state subsidies) have doubled the cost of the TV system up to E4 billion and now -due to the ad revenues fall- “we are reducing costs and that will imply a cut in quality”. To tackle this gloomy outlook, UTECA has urged the Government to approve a new overall TV law that rules the whole market and asked for significant changes in the public TV model and DTT.

UTECA has proposed to reduce by half the number of DTT multiplexes awarded to the state-owned group RTVE (from 2 to 1) and to Regional TVs (from 2 or even 3 to 1) as, if not, the 45 to 54 DTT channels available in the market in the future will find it difficult to survive. It has also asked to accelerate the awarding process of the multiplexes instead of waiting until 2010, the analogue switch-off deadline, for exploiting the definitive 1 multiplex that each operator (except for RTVE with 2 now) will be able to operate. The Association is for lifting the obligation to reach a 96 per cent DTT coverage and for the financial aid from the Government to extend the DTT coverage. Today, DTT coverage reaches 89.15 per cent but only 38.8 per cent homes have access to DTT, with a penetration of 12.4 per cent. Finally, to sustain the DTT model, UTECA has claimed that pay services should be authorised as well as HDTV should be developed by private broadcasters ruling out RTVE as the main driving force behind it.

As for a new public TV model, UTECA has proposed to eliminate its ad revenues, to impose percentages on particular (Spanish or European) programming, and limit the acquisition of sports TV rights to minority sports. The Government reduced to 11 minutes per hour the ad time on public TV for this year; to 10 in 2009 and 9 in 2010, but the total elimination of ad revenues is ruled out for now. Currently one third of all ad revenues go to public TV in Spain, covering around 72 per cent of their costs. Public TV lost more than E945 million in 2007, whereas private TV made a profit of E512m, according to a report made by Deloittes. The study reveals that public TV in Spain annually costs around E1.5 billion, E170 per home.

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