State TV’s Ad Ban Worries Other Webs

State TV in Russia has announced a temporary ban on all commercials, raising fears the government is trying to tighten control of the airwaves by cutting off a major source of revenue.

Russian television is still state-controlled, four years after the collapse of the Soviet Union. There are three national television stations as well as some smaller stations, but all depend on state-run Ostankino, which has broadcast towers and other transmission equipment.

The announcement by Ostankino last week came two days after President Boris Yeltsin restricted the advertising of alcohol, tobacco and certain drugs.

Other companies protested the decision by Ostankino to ban all ads, saying that they could be hit by considerable revenue losses.

Reaction from other TV stations and from ad agencies was almost uniformly negative.

The Russian advertising industry has mushroomed since Ostankino first began selling advertising time in the late 1980s. Prices for TV ads have soared to about $50,000 per minute for a primetime slot. Blurbs are bought by a growing number of Western multinational companies as well as by some local companies.

Without such revenues, the precarious financial position of many stations can only worsen, putting both state and independent broadcasters further into debt.

“If the ban is enforced, Russian TV will be cornered in terms of money, since it has not received any funds from the budget this year,” Sergei Kovalenko, head of Russian TV’s advertising department, was quoted as saying.

However, Russia’s Duma (the successor to the old Supreme Soviet) is due to consider three drafts of a new law on advertising next week, only one of which would ban tobacco and advertising altogether. The others would limit or regulate the scheduling or format of such ads.

Reacting to the news of the ban on tobacco and alcohol ads, Igor Malashenko, president of commercial broadcaster NTV, confirmed that his station would stop broadcasting such advertisements from the moment that Yeltsin’s decree is published in the official government newspaper, a precondition for its becoming law, and not before – lest the station be held responsible for breaking contracts with its advertisers.

The ethical grounds for the ban on tobacco and alcohol advertising is one thing. But the consequences of a ban on these products for the wider Russian economy will undoubtedly be serious: earlier this year, the Russian Assn. of Advertisers put the cost of such a ban at almost $1 billion in lost investment and tax revenues over five years.

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