Video International has announced a suspension on all of its TV advertising contracts due to a new bill under consideration at the State Duma.
If approved, TV channels with have to cut the time for commercials from 20% to 15% of the daily broadcast, or 20% of every hour.
NTV Media, another major TV commercials vendor, says it could consider a similar move, if the bill is signed into law. Prices are due to go up from July 1, 2006 and some of the advertising agencies have spoken against the decision.
Video International, likewise NTV Media, regards a new condition as a force-majeure. It refers to its contractual terms where any action by state bodies is classified as such.
The TV commercials market totaled $2.33bn in 2005 whereas Video International’s turnover reached $1.5bn.
The third reading of the bill is slated for February 17 and is unlikely to change the concept drastically.