20 September 2006

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Business Today

PBS considering hiving off advertising services

Karl Schembri

The national public broadcaster, PBS, is considering to hive off its advertising department and to farm out its services to private companies, Business Today can reveal.
High-level sources at the state broadcasting company say PBS is seriously considering issuing a call for tenders to farm out its own sales and advertising services in the coming weeks – a move that is expected to raise yet another controversy given the sensitivity of the sales department’s operations and the potential conflict of interest of anyone taking up such a contract.
The Investments Ministry is said to be “assessing the plans” that remain officially under wraps.
Contacted yesterday night, PBS Chief Executive Albert Debono cited “sensitive commercial issues” that forbade him from giving more information, but he did hint that the station was seriously considering the plans.
“It could be an option that may be on the cards and cannot be discussed further due to sensitive commercial issues,” Debono said.
Asked why PBS was considering making such a move, Debono said that “such a decision, when and if taken, is a commercial one and its grounds are also commercial”.
He added: “Such a decision would not necessarily entail the dismantling of our own sales function, though of course inbuilt in such a move would be the orientation of our sales operation. As much as unlikely to discuss with me the sales methods of the organisation that employs you, I am not at liberty to provide any further details.”

A spokesman for Investments Minister Austin Gatt – who is responsible for the PBS restructuring – confirmed that the ministry received plans from the station to change its sales and advertising operations.
“We have received submissions from PBS regarding their proposals for a revised sales strategy,” the spokesman said. “These proposals are currently being assessed.”
The spokesman added that the proposals “do not include the dismantling of the existing sales unit”.
Ironically, on Monday the acting chairman of the PBS editorial board, Dominic Fenech, warned that the station needed to boost its advertising and marketing department so that it could retain control over its programmes without having the need to sell airtime.
“The public is paying taxes and deserves a product of a high quality. Sadly, the way things stand, due to financial constraints the client of PBS is not always the public, but production houses. We have to work to change this situation,” Fenech said.
According to a confidential PriceWaterhouseCoopers audit report revealed by MaltaToday last November, production houses producing programmes for PBS were capitalising on the PBS policy to outsource its programmes.
“In reality it (PBS) does not have the facility to produce its own programmes and has no alternative but to source local programmes from the relatively limited pool of local ‘talent’ available on selling/sharing airtime with producers,” the report states.
Sources fear that outsourcing advertising would really be the death knell of the station’s public service broadcasting mission.
Proof of this is the amount of airtime dedicated to core public service programmes, supposedly the raison d’etre of PBS. Only 27 per cent of such programmes were broadcast between May and December 2004, as opposed to commercial broadcasting which stood at 42 per cent.
At the same time, the station is suffering from advertising competition with the same companies producing its programmes, the report states.
“The local advertising market is in a state of ‘disarray’ given the intense competition between the three main local TV stations as well as, and possibly more importantly between the stations and their own producers/suppliers who often compete head-to-head with their ‘principal station’ in selling airtime. … Selling of airtime to producers has brought about a situation whereby there is now a direct competition for selling advertising between PBS, advertising agents and production houses. This is only creating confusion in the market place and aggravating matters further.”
PBS lacks a “formalised marketing plan that sets out clearly the strategic vision for PBS over the years,” the report adds. “As a consequence many initiatives are being undertaken in an uncoordinated and haphazard manner.”

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