Competition heats up following award of new license

RIGA - Latvia's national airwaves became a little more crowded after regulators awarded the country's second nationwide commercial television broadcasting license on Feb. 8 to Swedish-owned TV3. Latvia now has four channels reachable in all homes - two public, two commercial.

The National Radio and Television Council approved TV3's request. TV3 had been lobbying for the additional license for years without any luck.

"It's taken about two years to get this permission," spokeswoman for TV3 Kristine Juckovica said. "We have tried three times, but now we have it."

TV3, owned by Sweden's Modern Times Group, was the sole bidder in the license auction.

TV3 also operates nationally in Lithuania and Estonia and has been broadcasting in urban areas in Latvia through local cable operators. In Latvia, the channel's sole national commercial competitor is the independent TV company LNT.

Olgerts Zenitis, who is responsible for commercial TV stations at NRTVC, said that the advertising market had collapsed because of the economic crisis in Russia when TV3 first started lobbying for the additional license, but recent research shows the advertising market is on the rise in Latvia.

The Latvian advertising market totaled 30 million lats ($48.62 million) last year, up by 16 percent from 1999, research company BMF Gallup Media Director Kaspars Ulsts told reporters Feb. 15.

He said the above amount didn't include 5.9 million lats of advertising in catalogues.

Television advertising increased last year to 10.1 million lats over the previous two years., and radio advertising was likewise up from 1998-1999 to 4.9 million lats in 2000.

Advertising in magazines made up 2.4 million lats last year, also up from the previous two years, and so was outdoors advertising which accounted for 1.5 million lats. Advertising in movie theaters amounted to 200,000 lats and on the Internet 100,000 lats.

Armands Slokenbergs, the Latvian advertising association joint industry committee chairman, told reporters that approximate estimates show that the Estonian advertising market totaled $42 million last year, up 10 percent from 1999, and in Lithuania the advertising amount was $48 million, down 13 percent from the previous year. Thus, Latvia has the largest advertising market among the Baltic states.

Zenitis also hinted that LNT may have been pressuring NRTVC to delay a decision, but he refused to elaborate. TV3 would not comment on LNT's possible involvement in the licensing process.

"All we know is that the first time we were denied it, it was because of the poor advertising market, and the second time we were told we had old programs, so we changed," TV3's Juckovica said.

LNT Director Andrejs Ekis couldn't be reached for comment.

He told the Baltic News Service that he hoped NRTVC had considered the changes in both quality and quantity factors before issuing another nationwide license.

The state-controlled Latvian Television, which operates two nationwide channels, expressed worries about funding.

"Giving this national broadcasting license to TV3 will cause a potential income decrease for LTV," the company said in a press release.

LTV is also concerned about how this decision may affect the quality of programs they're showing.

"LTV has already lack of financing, but we still have good programs. Should our funding decrease the quality of our programs would inevitably decrease as well," the press release read.