France Halts Plans to Ban Remaining Ads on Public TV

In Struggling Economy, State Broadcaster's Revenue Needs Trump President Sarkozy's Political Priorities

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LONDON ( -- The French government has halted a move by President Nicolas Sarkozy to ban all advertising from public TV broadcaster France Télévisions. Mr. Sarkozy already succeeded in getting ads banned from the four national public channels after 8 p.m., starting in January 2010, but now his own party is producing reports indicating the ad revenue from the remaining daytime ads is needed.

Advertisers and media agencies welcome the government's change of heart. It means that plans to pull all advertising from the channels -- France 2, France 3, France 4 and France 5 -- starting in January 2011 are now on hold for at least two years, and there is pressure on the government from advertisers, politicians and France Télévisions itself to can the idea for good.

Mr. Sarkozy stunned the French advertising and broadcast industries in 2008 when, without even consulting the management of France Télévisions, he announced his plan to get rid of all advertising on the public network.

At the time he said that the loss of advertising revenue -- which totaled just more than $1 billion annually -- would be made up by taxes on telecommunications companies and owners of commercial TV networks. (Like most of Western Europe, France also imposes an annual licensing fee on each TV household. The current fee of $155 is collected as part of local taxes.)

The first phase in removing advertising from France Télévisions was to ban commercials from prime-time TV -- a move implemented in January of this year. The total ban was due to start a year later.

The initial impact of removing ads from prime time has been to cut the state broadcasters' revenue in half.

Against industry forecasts that ad dollars would move from the public stations to commercial broadcasters, such as TF1 and M6, advertisers instead used the period between President Sarkozy's surprise announcement and the first phase of the ad ban to plan new media strategies. Some of budgets went to France's increasingly popular digital television channels and to other media, but areas such as sales promotions are also benefiting.

Dominique Delport, chief executive of Havas Media in France, said the industry objected to Mr. Sarkozy's surprise announcement but wasn't able to stop the first stage of the ban.

"It was so unexpected," Mr. Delport said. "The industry could see the political reasoning, but on a pure business side, it is not good for advertisers. French TV viewers were in favor of the ban, of course, because it meant they see fewer ads, but advertisers tend to love the France Télévisions audience, as they tend to be a bit older and a bit smarter."

Now agencies are relieved that the government has changed its mind about imposing the total ban envisioned by Mr. Sarkozy. The anti-advertising policy has been abandoned after research carried out by Jean-François Copé, a politician who is a member of President Sarkozy's own UMP party, showed that even with new taxes, it would be difficult for public funds to make up the shortfall in ad revenue in a country beset by a growing deficit, a crisis over government workers' pensions and a battle to raise the retirement age to 62 from 60.

Also, Mr. Delport said that smaller advertisers, particularly those who run regional campaigns during the daytime, had said the ban would force them off television completely, because they can't afford the pricier national advertising available on other channels.

The move to drop ads had long been proposed by left-wing political parties in France, but it was a big surprise when it was championed by business-friendly President Sarkozy, whose own father worked in advertising.

In the end, the decision not to impose the ban is, Mr. Delport said, "a case of politics meets economics," indicating that, for French advertisers at least, there may be one small silver lining to the global financial crisis.

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