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SubscribeDirty Politics or Dropping Dollar?: Are TV time rate increases a pro-government conspiracy?
By Julia Hakobyan ArmeniaNow reporter
A noticeable increase in commercial air time rates in Armenia since the last election campaign season has caused opposition political parties to attack the rise in prices as a pro-government conspiracy to monopolize the airwaves.
On the surface, it would appear the claims are justified. Ad time on government controlled public television that in 2003 – the last parliamentary campaign – cost $120, now costs $225.
Oppositionists make the valid point that TV companies are owned by pro-government businessmen (and the most popular channel, H1, by the state), and so airtime is assumed to be available at their demand, while the price hike makes it unrealistic for many non-government affiliated campaigners.
The controversy even reached the Organization for Security and Cooperation in Europe last week, when the US Ambassador to the OSCE, Julie Finley, criticized Armenian authorities for the rate increase, accusing the ruling regime of being afraid of competition and saying (according to Radio Free Europe):“Whoever has the power to do so, they’d better lower their rates.”
A look behind the numbers, though, leads to a different assessment, according to a major research organization whose mission in Armenia is to strengthen media business and monitor such issues as airtime usage and whether laws on advertising are obeyed.
The Armenian office of IREX, the International Research and Exchanges Board, has assessed the TV ad rates, and found that prices are market-based and the increase over four years ago is conditioned by the slump in the American currency exchange rate and the general increase in the cost of living in Armenia.
While the opposition claims that the increased prices are a trump card for authorities who forced the TV companies to set up the high rates, IREX suggests a clearer picture is seen by following the exchange rates in the country in recent years.
In 2003 a dollar, a strong currency in Armenia since independence, was valued at 585 drams. Since 2004 the dollar has drastically depreciated by falling to 546 drams, then to 455 in 2005, to 420 drams in 2006 and sliding down by 2007 to 352 drams. In effect, today’s dollar is worth 60 cents, compared to four years ago – and that is not accounting for inflation.
Further, media market observers agree, air time on Armenian television has become generally more valuable, as double-digit economic growth each year has driven up the spending power of many Armenians.
“Our monitoring found the H1 rates were practically identical in 2003 with the major difference within the exchange rate,” says Robert Evans, IREX chief of party, pointing out that his company has no political agenda or allegiance. “We provide data. We just measure what’s going on and report the facts.”
Evans explained the impact the American currency has on Armenian TV advertising spending.
“Before, advertisement in Armenia was quoted in dollars because the dollar was a stronger currency, and since January of this year advertisement has been quoted in Armenian drams because the dram is stronger now and more valuable. People should take into account that the Armenian advertising market is stronger today that it was in 2003. The reasons (for increased prices) are certainly not what the opposition claims. Besides, the rates have been increased for all types of commercials.”
By law, candidates should have 60 minutes air time free on state television. Each additional minute costs from $225 to $360, depending on the station.
Oppositionists’ claims are not completely groundless. As the campaign season provides income opportunities, it is not unusual that some stations might “harvest” the benefit of extra business by inflating rates. It has also been reported that some candidates have been refused the chance to advertise, while others have paid for ads, then had their money returned without the airtime.
Evans, whose organization is contracted by the United States Agency for International Development (USAID), refrained from commenting on the recent statement by Finley.
But the American OSCE ambassador’s statement was referenced in a statement by the U.S. Embassy in Armenia, which says it shares Finley’s concerns for fairness, however:
“The drastic difference in exchange rates since the last election combined with the dramatic growth in all sectors of the television advertising market have certainly played a role in driving up rates.”
This article was originally published by www.armenianow.com