Spain scraps ad ban on public TV?
January 11, 2012
From David Del Valle in Madrid
The legal ban on advertising on RTVE may come to an end over the next few months as the new Government is considering its reintroduction. In a move to tackle the budget deficit, the Government has tightened the screws on RTVE by reducing by €200 million its state subsidy out of the total RTVE’s annual budget of €1.2 billion making a big hole in its accounts. To mitigate such a significant cut, the Administration is to lift the advertising ban to allow RTVE to capture ad revenues.
The advertising ban came into force in January 2010 after a campaign from private TV channels which benefited from €400 million in ad revenues released from RTVE. The advertising ban came along with a new financial model for RTVE supported by taxes imposed on telco operators, private TV channels and pay TV companies and even a radioelectric spectrum tax amounting to a total of around €700 million plus €500 million in state subsidies.
The reintroduction of advertising on RTVE would also have a big negative impact on private TV channels at a time when the advertising market is in free fall with a drop of 7.5 per cent until September.