ADVERTISING industry executives and observers have expressed alarm at huge possible increases in the South African Broadcasting Coporation's (SABC) advertising rates, writes Thom McLachan in Business Day.ÂÂÂ
They say the broadcaster radically hiked its advertising rates last month by 25% year on year , and was planning a 39% increase next month.
The increases, far above inflation and what was expected, could see advertising clients move away from the public broadcaster, which generates about 75% of its annual profit from advertising.
SABC CEO Dali Mpofu said yesterday the figures "being bandied about" were incorrect.
Mpofu said this was not a matter for the public domain, but a matter for the SABC to discuss "with industry stakeholders". He would not say who these were.
Independent media analyst Brenda Wortley said an overall increase in advertising spend over the past three years had meant that in some instances media owners had faced an oversold situation, particularly at peak times, the natural consequence of which was higher prices.
"This, however, does not justify the astronomical prices."
Analysts believed advertisers would start feeling the effects of the increase in the near future.
Rates for SABC peak airtime went from a 5% decrease year on year in January to a 25% increase last month, Wortley said. The industry had been expecting an increase of about 8%-10%.
"The trend this year is two-fold. Not only have prices increased, but there has been a cut-back in discounts, too. For many clients this has resulted in an inflation rate of more than 30%. The rest of the industry uses the SABC as their benchmark," Wortley said . The SABC increases had been followed by e.tv's, which were only about 10% below the public broadcaster's figure.
Advertisers have echoed views heard within the SABC's commercial wing, saying the problem lies with regulations set out by the Independent Communications Authority of SA (Icasa).
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