French TV reforms under fire again

Commercial webs will be hit hard says report

PARIS — One of Gaul’s highest profile commercial broadcasting orgs has found fresh ammunition in its fight against planned government reforms in the form of a new report by global management consultancy AT Kearney.

The Assn. of Private Broadcasters (ACP) – a lobbying group formed by Gaul’s two biggest private nets TF1 and M6 together with paybox Canal Plus – has been most outspoken in opposing two elements of the sweeping reforms to France’s audiovisual sector, due to become law before the end of the year.

France’s commercial nets would pay a 3% tax on advertising revenues under the new measures. The ACP has claimed such a levy would be severely damaging in a period where revenues are under mounting pressure, due mostly to a poor economic climate and strong growth in recent years in the numbers of — and aud shares for — DTT networks at the expense of nearly all national terrestrial nets.

“For the 2009-10 period, with unfavorable circumstances for the advertising market… the 3% tax will intensify the deterioration of (the private nets’) revenue bases,” said the report.

According to the consultancy firm’s findings, the French terrestrial TV ad market as a whole is heading for a continued downturn in 2009.

A best-case scenario foresees an overall drop of 4% in ad revenues, meaning losses of around Euros 132 million ($177 million).

The worst-case projection is for an 8% tail-off, amounting to losses of as much as $354 million.

The ACP is also upset about the allocation of $603 million in the 2009 state budget to pubcaster France Televisions, in compensation for a full ban on advertising after 8pm, set to begin in January.

The association has recently claimed the figure is around three times more than the losses that the pubcaster is likely to endure.

AT Kearney largely confirms ACP’s projections. The consultancy estimates losses of only $288 million for next year.

In response, Jean-Francois Cope, chair of the state-headed Commission for Public Television Reform, hit out at the ACP today, and underlined his commitment to the proposals.

“With its new accusations, the ACP has launched yet another episode of what seems to have become a reality show,” said Cope, referring to the ACP’s objections to the funding allocations and the AT Kearney findings.

“The bottom line is that we will proceed according to plan. We want to give our public broadcasting service the financial means to develop its creative content and become the best in Europe, ahead of the BBC.”

Cope said that private channels will also get compensated for the tax, since the new law will allow for an additional commercial break each evening on private networks.

The proposed 3% tax is intended to help offset France Televisions’ future losses.

France Televisions – which generated almost a third of its income from advertising and sponsorships in 2007 – earned $856 million in advertising last year – of which $362 million came from post-8pm slots.

A full halt to advertising on France Televisions’ five terrestrial channels is slated for January 2012.