Minister proposes re-introducing ETV commercials

  • 2005-11-02
  • By Kairi Kurm
TALLINN - The minister of culture's proposal to re-introduce advertisement on public service television has irritated the competition, managers at ETV television and the public, who have enjoyed ad-free ETV for three years.
The proposal was just one of Minister Raivo Palmaru's alternatives for financing public service TV.

But according to Peeter Sookruus, director of the Estonian Ministry of Culture's media and copyright department, the suggestion turned into a scandal without serious discussion.

Palmaru claims that advertisement on ETV would be limited to 5 percent of daily broadcasting time, or up to six minutes per hour, and would probably help cover up to 30 percent of ETV's budget.

The advertisement limit to commercial television is 12 minutes per hour, according to the Estonian Broadcasting Act.

In addition to the 195 million kroons (12.5 million euros) of state support, ETV requires another 90 million kroons. Total support for ETV and Estonian Radio will come to 322 million kroons, all from next year's budget, or 19 million kroons more than in 2005.

Commercial broadcasting companies TV3 and Kanal2 pay an annual state fee for their license. This revenue helps foot the bill for not broadcasting commercials on public service broadcasting TV.

This year, the two channels paid 20 million kroons each. Next year it will be 1.25 million kroons more for each company.

In comparison, ETV gained 54 million kroons of advertisement revenues in 2001. Advertisement was withheld from public service TV starting from July 2002, and from Estonian Radio programs Raadio 2 and the Russian language Raadio 4 in January this year.

Ainar Ruussaar, program director of ETV who is currently applying for the post of CEO, told The Baltic Times that the advertisement market grows 10 - 15 percent each year and that it would not be wise to compare the 40 million kroon fee to 2001 advertisement revenues. Currently the fee goes to the state budget. Instead, he would like to see it go straight to ETV, just as in Finland.

"There are several models in Europe [to finance public service broadcasting], some of which are like the minister proposed. It is up to Riigikogu [Estonia's parliament] to decide," said Ruussaar. "But I see the biggest trouble in financing ETV during the first one-and-a-half, two years when it enters the advertisement market."

According to competitors, ETV's compensation fee is reasonable.

Urmas Aru, director general of Kanal2, said that the decision to broadcast advertisements would influence the media market's stability.

"It is wrong to change principles so often," said Oru. "It will be difficult for ETV to gain the amount of money that we get from the market. The competition is tight, and ETV's program has been structured differently. It also requires a professional sales team."

Toomas Vara, managing director of the biggest television channel TV3, is strongly against the minister's proposal as well. He calls it unfair competition. Even the management of ETV is afraid to take the commercial risk, he said.

Vara suspects that, since the proposal does not have a chance, an alternative could be to raise the fee of commercial television instead. He also suggests improving the efficiency of inner resources of ETV. "ETV should be totally financed by the state, or like in most European Union countries TV viewers should pay the license fee," said Vara.

Sookruus said it was too late to start collecting a license fee. "It requires an extremely serious explanatory campaign and is difficult to accomplish. But we can say that a license fee is still the best model to fund public service broadcasting in Europe," he said.

Vara does not believe in such excuses, since license fees are very common in Europe and post-socialist countries.

"Advertisement is not an aim in itself but a tool to improve the technical quality of ETV and to fund a switch over to digital television technology in the future," said Sookruus. "The aim is to secure stability to be able to plan activities further ahead."

Sookruus added that the state's financial increase by a few percent each year was not enough for public broadcast technology renewal and high-quality programs. "It may lead to falling into isolation and not being able to participate in modern information and culture exchange."

According to EU recommendations, television stations should switch over to digital technology by 2012. In Finland this will take place in autumn 2007, in Sweden in 2008 and in Italy at the end of next year.

ETV's competitors, Kanal 2 and TV3, do not have firm plans on when to start preparations for the digital switch over. One of the ministry's key issues is how to motivate private channels to participate in this area.

ETV's three main functions are to be informative, educational and intelligently entertaining, said Ruussaar. "Commercials certainly have an influence on a program, but it is up to ETV to decide when to broadcast them. ETV has to differentiate from commercial broadcasting, which does not show children's shows in prime time, for example," he said.

Public service television in Latvia and Lithuania broadcast commercials