Last days of the media market have been shattered by two major TV channels (TV3 and LNT) decision to quit from the free terrestrial broadcasting. It is really an important milestone in the media market and the influence of this TV channels decision can be considered from different points of view.
Yes, both TV3 and LNT will lose the audience – approximately 10% -15% each. Due to digitalization – terrestrial broadcasting is losing its role; there is currently ~ 20% of the audience using terrestrial signal, of which only ~30% are using free TV.
But if TV channels will truly reallocate investments of expensive broadcast in favor of investment in content, then most of audience will be motivated to pay for qualitative content and in a period of few months channels will reach the same level of audience as it is at this moment.
Consequently with the rating drop the viewer will also have to accept that the amount of advertising on these channels will only grow and will reach the maximum limits permitted by law (12 minutes per hour). This can be solved only by TV channels decision to raise advertising price, and this message certainly will be unpromising for advertisers, there is hard to imagine other way how to reduce advertising clutter. But it is in the advertisers’ interest too, to have TV channels with qualitative content
It is difficult to agree to the criticism addressed to TV channels on social responsibility and disregarding viewer. In Latvia there is a state supported public television (LTV), which carries the flag of social responsibility. Commercial TV channels work in harsh conditions of competition and they must make decisions how to survive and develop in long term and decision to invest in content rather than maintenance of expensive terrestrial broadcasting is understandable.
In short – long term benefiters of this decision will be TV channels, TV viewers and advertisers. The only involved party which is in really disadvantageous position in this situation is Lattelecom, which will have to solve problem how to earn back invested money in digitization.
Aivars Smits
Media Research Specialist
Aegis Media
Oct 20 2011 Commentary: TV3 and LNT channels leave the free terrestrial broadcasting
Last days of the media market have been shattered by two major TV channels (TV3 and LNT) decision to quit from the free terrestrial broadcasting. It is really an important milestone in the media market and the influence of this TV channels decision can be considered from different points of view.
Yes, both TV3 and LNT will lose the audience – approximately 10% -15% each. Due to digitalization – terrestrial broadcasting is losing its role; there is currently ~ 20% of the audience using terrestrial signal, of which only ~30% are using free TV.
But if TV channels will truly reallocate investments of expensive broadcast in favor of investment in content, then most of audience will be motivated to pay for qualitative content and in a period of few months channels will reach the same level of audience as it is at this moment.
Consequently with the rating drop the viewer will also have to accept that the amount of advertising on these channels will only grow and will reach the maximum limits permitted by law (12 minutes per hour). This can be solved only by TV channels decision to raise advertising price, and this message certainly will be unpromising for advertisers, there is hard to imagine other way how to reduce advertising clutter. But it is in the advertisers’ interest too, to have TV channels with qualitative content
It is difficult to agree to the criticism addressed to TV channels on social responsibility and disregarding viewer. In Latvia there is a state supported public television (LTV), which carries the flag of social responsibility. Commercial TV channels work in harsh conditions of competition and they must make decisions how to survive and develop in long term and decision to invest in content rather than maintenance of expensive terrestrial broadcasting is understandable.
In short – long term benefiters of this decision will be TV channels, TV viewers and advertisers. The only involved party which is in really disadvantageous position in this situation is Lattelecom, which will have to solve problem how to earn back invested money in digitization.
Aivars Smits
Media Research Specialist
Aegis Media