TV channels, advertising agencies and clients, reunited at IAA headquarters, came up with a point of view related to the Emergency Ordinance to modify Audiovisual Law (EO). The position comes after a discussion related to EA that took place on Monday.
One of the conclusions of IAA Romania is that EO “will attract desastruous effects over this industry”: TV market will decrease 20% (from Euro 190M in 2012 to Euro 152M next year). The agency losses will reach to Euro 40M
IAA position says that TVs “with only one exception” agreed that the negative impact of the ordinance is bigger than the benefits. The document doesn’t nominate the TV, but, according to Paginademedia.ro info, the reference is to Intact Group, represented to IAA discussions by Sorin Alexandrescu.
IAA blames Government that “it didn’t respected the legal principles on normative acts drafting or the principle of good governance, that states that decisions with major impact over an industry are discussed with all representatives of that industry”
“EO is unconstitutional as the authority (Romania Government) couldn’t justify the extraordinary situation who’s regulation cannot suport a delays”
EO effects, in IAA’s vision:
Over advertising clients
- Increases the direct costs for bought advertising space, as the clients must discuss with each and every TV separately.
- Increase in indirect administrative costs from the obligativity for the clients to handle themselves the multiple advertising contracts
- IAA says the impact over the market will be of 20%, with the TV market to go down from Euro 190M in 2012 to Euro 152M in 2013, should the EO apply.
- Agencies’ losses could reach Euro 40M
- Bankrupcies: the losses won’t be affordable for small and medium agencies, that will end up disappearing from the market.
- Increase in bureaucracy connected to managing the direct relation with hundreds of clients buying advertising space.
- Decrease in budgets given by clients for TV advertising as a result of the migration from TV towards other mediums to avoid blockages and increases in prices
- Bankrupcy risk for small and medium TVs
- Decrease of invome to state budget, collected now as taxes and impots on advertising market.
- Juridical risks related to not respecting the constitution and generation of a legislative wireframe that allows non-competitional practices.