The FINANCIAL — The total profit of Georgian TV companies reduced by USD 13, 989, 387, or more than 18%, during the first four months of 2015 compared with the same period of last year. TV company Rustavi 2 attracts the largest share of advertisers, according to TV MR GE, Nielsen Television Audience Measurement.
TV’s profit amounted to USD 61,210,366 in January-April 2015, down from USD 75,199,753 in the same period of 2014. The figures are counted according to official price lists and do not take into consideration any discounts between TV companies and advertisers.
In 2015, the Georgian Parliament has approved a bill of amendments to the law on advertisement. The bill had been proposed by the Georgian National Communications Commission (GNCC). The main issue that caused most of the controversy – 20% limit per hour and date of its enforcement.
Previously television stations could allocate 20% of total broadcasting time per day to advertisement; as no hourly limit existed, broadcasters put more ad spots in primetime to maximize revenues, resulting in lengthy, well over 12-minute ad spots in primetime.
The Georgian National Communications Commission, which drafted the bill, and the Georgian Dream parliamentary majority, cite the need to put these regulations in line with the European standards as the reason behind the proposal.
Under the Association Agreement with the EU, Georgia undertook commitment to introduce 20% hourly limit within five years.
Rustavi 2 TV, which generates largest ad revenues among Georgian television stations, has been in the forefront of opposition to the proposal, calling on the authorities to delay its enforcement and not to move to a new system immediately, which, the broadcaster said, would hit its ad revenues.
Meanwhile, considering the overall economic conditions in the country it does not seem that the new bill was the only contributor to this reduction. Recently, representatives of outdoor advertising also complained about the drop of sales by over 10%.
With USD 6,185,635, Mondelez (Barni, Alpen Gold, Jacobs and other products) leads the list of the top ten companies with the largest ad expenditures on TV companies during the first four months of 2015. The amounts of the top ten expenditures exceeded USD 1 million.
Mondelez is followed by Mobitel (Beeline), which spent USD 2, 771, 515; Coca-Cola – USD 1, 916, 321; Berlin-Khemi (a pharmaceutical company) – 1, 772, 071; Geocell – USD 1, 713, 672; Unilever (Rexona, Sunsilk, Domestos) – 1, 547, 788; Ludsakharshi Natakhtari – USD 1,278, 585; Novartis Consumer Health Care – USD 1, 235, 509; PSP – 1, 200, 529 and Procter and Gamble – USD 1, 158, 907.
There were only two companies that spent more than USD 2 million on TV ads during January-April 2015, out of the top ten expenditures. The number of companies was six during the same period of the prior-year. Mondelez and Mobitel were the only companies that increased its TV ad budget this year. The expenditure of the current year’s leader, Mondelez, has been increased from USD 6, 185, 635 to USD 5, 076, 798 from January-April 2014. Mobitel, operating under brand name Beeline, spent USD 2, 771, 515 during the first four months of 2015, up from USD 2, 199, 581 from the previous year.
Procter and Gamble spent USD 4, 812, 985 during January-April 2014. Geocell – USD 3, 382, 061; Ludsakharshi Natakhtari – USD 2, 872, 087; Berlin-Khemi – USD 1, 834, 488; and Unilever – USD 1, 731, 767.
In terms of the revenues of broadcasters from TV ads, two TV stations currently account the major share of all revenues in the broadcasting sector. During January-April 2015, Rustavi 2 reported revenues of GEL 22, 792, 100, Imedi TV reported income of GEL 17, 338, 846. Meastro gained USD 5, 960, 109. It is followed by New Channel/Comedi – with USD 5, 059, 228; GDS – USD 4, 218, 695; Maestro 24/TV 11 – USD 2, 722, 620 and Marao – USD 1, 463, 197. Channel one, Kavkasya, Channel 2, Palitra TV, Tabula TV and Music Box attracted less than USD 1 million.
Ad sales profit of TV companies in 2015, has brought reduction to all TV companies operating in Georgia. There was only one exclusion. TV companies Rustavi 2 and Imedi were both leaders on advertising market in 2014. Meanwhile their profit in 2014 has shown larger scales than in 2015. Ad sales profit of Rustavi 2 was GEL 28, 974, 558 during January-April 2014. It was followed by Imedi – USD 23,626, 167; New Channel/Comedi – USD 8, 011, 507; Meastro – USD 7, 073, 457; and TV 3 – USD 1, 012, 169. Channel 1, Tabula TV and Music Box were the only companies, attracting less than USD 1 million in 2014.
Maestro 24/TV 11 was the only company in 2015, that has seen increase in ad sales in comparison with the previous year. The company received USD 2, 722, 620 in January-April 2015, up from USD 1, 625, 738 from the same period of the previous year.
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