Goodbye to advertising on Spanish state TV

Autumn of 2009 will stick with every Spaniard as the season when its capital city lost out in its second consecutive bid to host the Olympic Games, this time to Rio de Janeiro. It’s also when Spanish Public Television, TVE, bids farewell to advertising after more than 50 years on the air.

Some European states, including Britain and France, charge citizens a TV licence fee. Spain has no licence fee.

But the Spanish government aims to provide a public service station. It is hard to believe the government will be able to do this without the help of commercial advertisers. Spain’s two public channels, TVE1 and TVE2, currently broadcast 10 minutes of advertising per hour, which translated to 400,000 adverts last year.

The National Broadcasting Radio & Television RTVE, Financing Law came into force on 1 September, 2009. TVE may no longer contract any space for publicity. This means there will be “a significant reduction of advertising space in the coming months of October, November and December,” said Luis Fernández, president of RTVE.

By January, 2010, advertising must be wiped from Spanish state television.

Commission clash
The European Commission voiced concern about the volume of adverts on Spanish state television in July, 2007, when it instructed Spain to cut down on TV commercials or be taken to the European Court of Justice in the violation of the Television Without Frontiers Directive. The 20-year-old directive seeks to harmonise broadcasting regulations across the 27-nation bloc.

The Commission’s concern in ’07 stemmed from infringements of a 12-minute limit on spot advertising and teleshopping.

In Spain the limit was established at 17 minutes per hour.

According to the Commission, the terms under which Spain defined the “advertising spot” were too narrow. Consequently, ad formats such as tele-promotions or microslots were included in Spain’s “advertising spot” concept.

The Commission forwarded a letter of formal notice to the Spanish authorities. It read:

“...Spain has not taken the requisite measures to ensure effective compliance with all the provisions of the Directive. Everything must now be done to remedy this situation and to establish a genuine internal market for audiovisual media services….”

The Spanish government did not agree to change its interpretation of what constitutes an “advertising spot.”

Fast forward two years, though, and the owners of privately-held channels are rubbing their hands together in anticipation of the advertising axe falling on the public broadcaster: In 2008 ad revenues at public channels totalled 557 million euro.

Complex broadcasting
Spain is a decentralised country. Two public broadcasting systems coexist: a national broadcasting television station, TVE, and many autonomic channels that can be watched only in their respective territories known as Autonomous Communities. TVE, founded in 1937, consists of two stations: TVE1, targeting a general audience, and TVE2, which offers cultural programming as well as sports competitions.

The regional channels are modelled after TVE: one is directed to a broad audience and the other to a more cultural customer. Moreover, in Autonomous Communities with official language besides Spanish, such as the Basque Country or Catalonia, regional channels transmit in their co-official languages. Although publicly and privately founded as well, these territorial networks will not automatically be effected by the new law. Their own legislative and administrative competences impact this issue.

This is why discussions about adopting new initiatives must always be held in a context of political and administrative decentralisation.

New funding system
How will Spain pay for non-commercial public state television?

To compensate for an annual loss of publicity revenue (foreseen to be around 478m euro in 2009) Spanish authorities have established a three-way solution.

• Privately-owned commercial stations must provide the country’s two public television stations with 3 percent of their annual gross income, which will raise an estimated 140m euros.


• Telecommunications providers also offering audiovisual services (Telefonica, Vodafone, Orange and others) shall give the equivalent of 0.9 percent of their benefits, which translates to 290m euro.


• The third financing source will come from taxes that all operators (from radio stations to telephone companies) have to pay to be entitled to use a portion of the radio frequency spectrum for broadcasting purposes, which corresponds to 240m euro.


• To complete the 1,200 euro annual budget, state-owned television will contribute 550m euro to RTVE.

Reactions
Privately-owned commercial channels are partially in favour of this plan. They’ll have one competitor less in an era of eroding advertising revenues. On the other hand, they do not feel compelled to fund RTVE budget with a percentage of their publicity income. This tax will join the already existing 5 percent they are required to earmark for the funding of European and Spanish films.

Telecommunications providers have reacted angrily. They are willing to take legal steps claiming it is not fair to require them to fund a sector that has no direct connections with their own duties. They have declared they will charge users 0.9 percent more, which the charge itemised on all telephone bills.

Prominent Internet users call the new financing law an abuse ultimately relying on consumer taxation.

Other critics include TVE’s commercial sponsors. They have proposed at least 12 minutes of advertising an hour. Their argument is that less advertising will mean less consumption, which has already been slashed by the country’s brutal recession.

Questions
How will TVE fill the space previously taken by advertising, considering that only TVE1 currently uses 270 minutes a day?

Will programming be extended by nearly five hours? If so, how? Will the news last 60 minutes instead of the actual 45? Will news shows include self-promotion as does the BBC? Or will reporters produce more in-house series?

Little insight has been given. What we do already know are new obligations TVE will have to follow.

TVE is already forced to air more content on political debate and education, boost children’s programming and give access rights to social agents such as political parties and trade unions. The new public service will have to provide the Spanish cinema industry with 6 percent of its annual budget (at the moment set at 5 percent).

It will have limited access to sporting events, with the exception of the Olympic Games. It will be entitled to invest only up to 10 percent of its yearly expenditure, the equivalent of 120m euro, to buy TV rights for football matches.

The days of lavishing Trash TV are numbered.
No longer we will wonder if we watch it because it is offered or if is offered because we watch it. The new RTVE´s financing law will challenge Spanish state television to demonstrate it is capable of providing the viewers with content fostering the values of democracy, education, pluralism, culture and entertainment.