The World: Adland cries foul as Sarkozy hits the off button

window from 1 January 2009.

In Sarkozy's view, the move will help FTV gain the same high standards
and international reputation as that held by the BBC. Few others in the
television industry share his opinion. Although commercial broadcasters
could stand to gain from public TV's loss, the country's union of
advertisers is predicting there will be difficult and expensive times
ahead.

FTV estimates that it will cost the group around EUR70 million to plug
the gap left by the absence of ads with new programming. At present, the
group's four main channels, France 2, France 3, France 4 and France 5,
show a total of 120 minutes of ads after 8pm each night.

Without the buffer of frequent ad breaks, FTV is having to rethink its
entire primetime window. This not only requires France 2 to shorten its
flagship evening news show, but it also requires the country's top
commercial broadcasters TF1 and M6 to fall into line with the new
regime.

At present, France's main TV channels all respect an 8pm to 10pm
primetime window to keep competition at a manageable level. Come 1
January, this will be different.

"All the other channels will have to change," Dominique Guerin, the
deputy managing director of Mediaedge:cia France, says. "If FTV channels
don't have advertising after 8pm, the other channels will have to change
their schedule to stop people switching over to avoid their ads."

Media agencies, advertisers and broadcasters can only hope that
audiences will take to the new routine, but there are no guarantees.
"Moving programming forward does not mean that all TV viewers will
change their habits," Maria-Laure Sauty de Chalon, the president of
Aegis Media France, says. "They might perhaps be tempted to devote their
time to other hobbies or media like the internet."

As a result, Aegis Media estimates that the EUR650 million net revenue
public TV currently earns from advertising may well be spread between
radio, outdoor and print ads in future.

Gerard Noel, the vice-president of the union of French advertisers, has
other more pressing concerns. He believes the industry is not being
given enough time to prepare for this huge step change.

"It is impossible for advertisers, their agencies and media buyers to
stick to the 1 January deadline," he says. "The debate on this reform
will not be concluded in parliament before November. In September, which
is negotiating season in France, advertisers will not know which medium
to bank on."

All this uncertainty has left media agencies in a tricky position.
"We've never seen anything like this before," Guerin says. "It has been
much more difficult to do our job this year. Inflation is much higher
than we expected it to be. TF1 and M6 have already increased the prices
and will only sell on condition that you buy ahead for next year. They
will probably increase the prices again in September."

Guerin believes that the only way to improve all this is for the
government to allow more ad slots on commercial channels. "We are in a
market where there are many more advertisers than there are spaces
available," she explains. "If we go with the new European Union
directive next year, we would get four more minutes an hour, but Sarkozy
has yet to decide on this."

Helene Delpont, the chief executive of MindShare Paris, is not sure that
adopting EU-wide policies on TV advertising would be enough to stabilise
the French market. "Even if the supply at private channels increases, we
all worry about an impact drop and the need to change all the TV media
planning rules," she says.

Delpont does, however, see one sector of the TV market benefiting from
all these sudden and not necessarily welcome changes. "In the long term,
this could represent an opportunity for the new digital channels, which
will need advertising resources to increase their 'quality' programming
and gain a share of the audiences," she says.

With analogue switch-off due in 2011and audiences potentially giving the
new terrestrial primetime slots the cold shoulder next year, digital
channels stand to make considerable gains.

Amid the ongoing controversy and heated price negotiations, it is
proving hard for France's media market to recognise any positives in
Sarkozy's decision.

FTV, though, may find commissioning and scheduling easier in the future,
despite losing its advertising revenue. "For some time now, FTV has been
caught between its obligation to provide quality, cultural programmes
and to generate broad audience to attract advertisers and create
revenues to finance its channels," Isabelle Grima, the head of TV
department at Magna Global France, says.

"It's been quite a challenge for them to mix both goals without losing
their soul. Now if FTV wants to broadcast dramas about Sartre and
Beauvoir, they won't have to worry about their audience versus TF1or M6
and its consequences on advertising revenues."

Although Sarkozy is planning to tax the country's private stations to
fund state television, FTV is still struggling to cope without primetime
ads.

The ad industry is also holding its breath for more declarations from
the Elysee Palace. "Sarkozy has a certain way of managing the media,"
Guerin diplomatically says. "He decides alone and we have no input. He
might make more decisions in the summer while we are all away." The
revolution, it seems, may not be over quite yet.