BROADCAST CHANGES MAY SPARK SPENDING:HUNGARY REVAMPS AD RESTRICTIONS AS IT PRIVATIZES BROADCASTERS JAN. 1

By Published on .

Most Popular
[budapest] The advertising industry in Hungary is expected to get a boost when the country's radio and TV broadcasters are privatized Jan. 1 and ad restrictions are loosened later. Changes can't come too soon in a market hit by shrinking ad revenues.

The Hungarian advertising market increased 7% last year, to about $320 million, but that paled in comparison to the annual 25% increase over the last several years.

"Nobody expects more in this year than last year," said Janos Peto, general secretary of the Hungarian Newspaper Publishers Association.

AD BUDGET INCREASE IN 1997?

Hungary's government will only gradually start to lift austerity measures aimed at curtailing inflation and curbing consumer spending in the second half of 1996. So the industry is hoping competition in radio and TV-which will come after privatization-will prod advertisers to increase their ad budgets in 1997.

Tobacco and alcohol compan-ies are sure to do so. The media law passed by Parliament in December upholds the current advertising ban on tobacco products in the broadcast media. But Parliament is expected to pass a more liberal law this autumn, allowing TV and radio advertisements for alcoholic beverages. And the new legislation would lift the ban on outdoor and print advertising of tobacco and alcoholic products.

If the bill passes, tobacco companies alone may spend an estimated $36 million on ads between 1996 and 1998.

Pharmaceutical companies also are expected to increase ad spending, if restrictions on advertising over-the-counter drugs are lifted as well.

But while advertisers and advertising agencies are ready to compete, Hungary's public broadcaster MTV1 is not. A representative from MTV1, recently asked at a press conference what the station had done to prepare for upcoming competition, replied, "of course-nothing."

NEVER EXPECTED LAW TO PASS

Hungary's broadcasters never really expected privatization to become a reality. But a five-year parliamentary debate finally led to last December's passage of the media law calling for privatization.

MTV1 is currently without a president-the former exec resigned when privatization plans were announced. And the National Radio & Television Association says public media needs an immediate $30 million just to stay on the air.

Potential investors in the two available nationwide TV stations hope they won't have to foot that bill.

"There is obviously a temptation on the part of the Hungarian government to get as much money for [the privatization] as possible," said Mark Palmer, vice chairman of Central European Media Enterprises.

Tamas Revesz, president of privatization decision-making bo-dy the National Radio & Television Board, said money "won't be the only factor."

Programming content will also be considered.

In this article: