Spanish b'casters enjoy New Year sales hike

Private nets benefit from TVE's new no-ad policy

MADRID -- Private broadcasters in Spain got off to a good start this year with a reported 10% jump in sales for the first month of the year thanks largely to pubcaster Television Espanola's (TVE) new no-ad policy instituted on Jan. 1.

Though the broadcasters are being tight-lipped about the increase in advertising revenue citing public trading, industry sources said it was clear that the private networks were picking up the lack at TVE.

"The privates have absolutely grown this January compared to last January," said one insider who asked not to be named. "They've picked up what TVE has shed."

Recent studies estimate a 10% further drop in 2010 advertising from the estimated 20% plunge of 2009. So even if the privates divvy up TVE's 22% of the market -- a reported €400 million ($558 million) -- and bolster their bottom line, the overall market could still slide downwards.

So TVE's policy seems to benefit everyone.

TVE's commercial-free programming has buoyed its market share three points to 18.6%, compared to Telecinco's 14.8% and Antena 3's 12.8%. TVE only crossed the 18% threshold once since 2006 -- during the 2008 Olympics.

Audiences are particularly lapping up the uncut movies.

"Pirates of the Caribbean: At World's End" cornered 31.7% of the audience with 5.7 million viewers on Jan. 3, with similar-though-lower ratings for movies in following weeks. Those kind of figures may make it harder for the privates to convince advertisers to spend on second-best programming.

The private networks are finding it hard to pick off viewers from a blockbuster movie when there are no commercial interruptions. All of the national broadcasters are expected to see their shares dip in April due to the analogue blackout.

"Even though the general national networks' share will go down when digitalization is implemented on April 3, the difference of [TVE's] 1st channel with respect to its competition should stay constant. Maybe around 17.5 or 17.8%," Eduardo Garcia Matilla, President of Corporacion Multimedia told the Spanish daily El Pais.

Meanwhile, the pubcaster hopes the European Commission will back away from its initial veto of the Spanish government's Financing Law, which looks to complement the Spanish state's support of the pubcaster via its national budget. The law calls for a 3% tax on free-to-air channels' revenues, 1.5% of pay TV channels' revenues and 0.9% of telecommunications operators revenues to help finance the pubcaster. The first funds from the new law are due in April.

The new financing model may be incompatible with the EC Treaty.