08. 03. 2006

FOREIGNERS IN RACE FOR FREQUENCIES

BELGRADE, March 8, 2006 – The competition for national radio and TV frequencies will close at the end of March. It still remains uncertain who entered the competition for the broadcast license. However, more certain is the fact that more and more foreign companies appear to be interested in getting the commercial national frequency. Media speculate that German RTL, Greek Antenna, Cyprian Sigma and media magnate Rupert Murdock were interested in running for the broadcasting license. However, a local consortium also appears as one of the applicants beside the foreigners. Namely, the former vice president of the federal Government Danko Djunic and certain leading companies in Serbia like Economy Institute, ITM Group, Techno Progress from Belgrade, Hemofarm from Vrsac, Metalac from Gornji Milanovac and so on, have decided to form TV Avala as station competing for the national TV license. The broadcasters in Serbia however say that even five commercial television stations with national frequency are far too many, primarily because of creation of a negative competition, which will affect the quality of the program, but also due to the money that would go to advertising: “The existence of five commercial broadcasters in Serbia will create certain paradox, already seen in other countries around the world in the race for profit and subsistence on the market, where all such broadcasters have the same or similar program type with low level of taste”, said Miroljub Radojkovic, professor and former member of the Broadcast Agency Council. On the other hand, the Broadcast Council welcomes the stronger competition: “When all five commercial licenses are granted, only the number will be increased, but the proportion will stay the same. I have never heard of the case where the competition did not bring the better quality. Those five broadcasters with national licenses will have the same name – commercial broadcasters, so this would be their priority line of work. At the same time, there is also the public service broadcaster”, said Aleksandar Vasic, deputy chairman of the Broadcast Agency Council. Experts say that the presence of foreign competitors in Serbia would institute new TV standards. They also warn that the advertising market is not that big and that the competition has become severe even without the foreign parties. Only last year, around 95 million euros were spent on advertising. The profit cake will be cut in more pieces in the future, and who will get more money will depend not directly on the program quality, but audience share. “Foreign competitors will have a certain advantage of something called economy of scope when entering the competition and the Serbian media market. For example, RTL already has its TV in Croatia, and across Europe. They have very popular and commercially worthwhile programs, so their broadcasting costs in Serbia would not be too big. That’s where RTL has great advantage over the significantly smaller local broadcasters”, explains Mirjana Milosevic from the Institute of Social Sciences. The criteria which the Broadcast Council will use when deciding on the successful applicants for the national program broadcasting license will be made public seven days after the competition closing, whereas the five new national broadcasters are expected to be known by June.