The government's National Council for Audiovisual, the advertising regulatory body formed three years ago, instituted the ban for country's two state-owned TV channels Jan. 1, banishing ads between 8 p.m. and 10 p.m. The ban, which doesn't affect private TV stations, will be expanded to the hours of 6 p.m. to 11 p.m. March 1.
The NCA said it instituted the ban "taking into account the fact that advertisements are boring the Romanian people." Agency officials did not elaborate, nor did they say why the ban applies only to state TV and not to private channels.
TVR1, Romania's main state channel, carries about $17 million in advertising per year. Its smaller sister, channel TVR2, carries about $2 million in ads. It is estimated that more than 75% of this revenue is earned in prime time, when the stations show up to 20 minutes of advertising per hour, compared with only about 5 minutes per hour outside prime time.
The revenue loss could hurt the state industry, already battered by private competition. Until two years ago, the two state channels, TVR1 and TVR2, controlled all of the Romanian TV market. Since then, there has been an influx of foreign cable and satellite channels, as well as local channels.
Today, the two state-owned channels have 65% of the viewing audience, cable and satellite channels have 20% and other local Romanian channels have 15%.
Paul Radu, general manager of the independent Romanian ad agency Plus Advertising, predicted that the ban would not last long because the stations will lose so much money.
Radu Florescu, general manager of Saatchi & Saatchi Romania, which represents clients such as British Airways, said he would sue state TV if it fails to provide already contracted for prime time ad time.
The ad ban is a boon for Bucharest's three private TV channels, Pro-TV, Tele7abc and Atena 1. The stations in the city that is home to 10% of the country's 23 million people are said to have lobbied for the ban.
"[The NCA] wants to protect the TV viewer and this kind of protection is used everywhere for public TV channels," said Adrian Sarbu, general manager of Young & Rubicam Mediapro and a majority shareholder in Pro-TV.
It's believed one factor in NCA's decision is the large amount of advertising that the state-owned Romanian channels were carrying during prime time, a violation of NCA's 18 minutes per hour limit. The surprise decision by the NCA came only two days after TVR1 had announced the names of the agencies that had won an auction for the right to buy 30% of the station's advertising time to broker in 1995. TVR1 plans to sell the remaining 70% of time itself.
Two independent agencies, Clip Advertising and Plus Advertising, won the bidding by offering $5,600 per minute. Also taken by surprise by the NCA's announcement was Graffiti BBDO, which before the news of the ban was trying to negotiate a $12 million deal for the 70% of air time on TVR1 not being auctioned. That effort, criticized as monopolistic by competing agencies, has now collapsed.