Bulgaria votes to ban ads on state-owned TV

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SOFIA -- At a second reading of the Law on Radio and Television, the Bulgarian parliament adopted amendments to ban prime time advertising on state-owned television until a private nationwide license is awarded and to subsequently limit total primetime advertising on Bulgarian National Television (BNT) to five minutes. Deputies agreed the amendment before breaking for a summer recess July 31.

If enacted, the temporary ban would be considered a "force majeure" and therefore override BNT's contractual obligations to advertisers, agencies, media buyers and others who have bought air time on the two state channels, Kanal One and Efir-2.

No mechanism for compensating advertisers has been stipulated.

A 30-second prime time spot on the main state channel, Kanal One, costs from $1,275 (weekdays 7:05pm to 7:50pm) to $3,325 (weekends 7:50pm to 10:05pm).

In June, Kanal One, which had the domestic rights to the World Cup soccer tournament, earned $2.5 million in advertising and Efir 2 $167,000. The Sofia-based regional private stations Nova Televize and 7 Dny took $250,000 and $100,000, respectively.

According to Marketing Director Ivan Pavlov, BNT stands to lose 80% of its ad revenues. Foreign productions would be hardest hit, as they receive 40% of the ad revenues they bring to state television.

BNT Director Ivan Popyordanov said he would tender his resignation by the end of August if Parliament adopts the restrictions on advertising.

Stoyan Raichevski, Chairman of the parliamentary Culture and Media Committee, said the ban was designed to break BNT's advertising "monopoly," shift advertising revenue to the regional private stations, and attract greater interest in the sale of BNT's second channel, Efir-2.

He predicted a national television license would be awarded within three months. A third, unused frequency may be sold in 1999.

One major advertiser said the ban would bring "complete chaos in media planning," as at least six months were needed for the creation of a private national television channel, and most campaign strategies were already mapped out in March.

Prime Minister Ivan Kostov has come out strongly in favor of the proposals, arguing that revenue from the sale of Efir-2 would make up for the lost advertising revenue and as the entire state television budget would be subsequently be allocated to the state's main channel, Kanal One, BNT's financial health was assured.

The Bulgarian Association of Advertising Agencies has yet to give a public statement on the draft amendments. However, several members said the move had come as a "shock," adding that their clients had no immediate plans to switch their campaign to the regional stations, which would not be viewed as cost effective.

Copyright August 1998, Crain Communications Inc.

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