The council of ministers decided on Wednesday to ban state-broadcaster CyBC from airing paid advertising spots and engaging in telemarketing, the Press and Information Office (PIO) said.
“The council of ministers also approved an increase of the (government) grant to CyBC in the 2019 budget to offset the loss of revenue from advertising and approved a draft bill, in case it is considered appropriate,” the PIO said in an emailed statement.
The decision to ban commercial advertising on CyBC was on the grounds that public radio and television should not operate in competition to other channels, the statement said.
“The ministers of Interior and finance have already discussed the matter with the CyBC’s board of directors and management as well as the Cyprus Radiotelevision Authority (CRA),” the PIO said.
The cabinet’s decision exempts barter agreements, prizes, sponsorships and product placement as well as web-based advertisements, according to the statement.
The CyBC generated last year less than €1.8m in advertising, compared to €2.8m the year before, according to the auditor-general’s report. The decline in revenue last year was on the impact of the live broadcast of football games of Euro 2016, according to the report.
In 2017, the government made €28m available to the CyBC roughly as much as in 2016.
In 2015, the state-broadcaster generated €2.8m in advertising revenue and in 2014, €3.1m and received €24.6m and €25.9m from the government respectively.
A CyBC official said that the broadcaster’s board of directors already agreed to go ahead with an advertising-free model in exchange of the additional grant.
“The CyBC was at a cross road,” the official who spoke on condition of anonymity said. “It either had to adopt a more aggressive policy to reverse the declining trend in revenue from advertising of recent years or it should adopt the model of BBC or Finnish television.”
The source said that the government is likely to increase its grant by €2.5m which will reflect the average ad-revenue of recent years.
The official said that if the CyBC had decided to become more aggressive in generating revenue, “that would not fit its role while the outcome was not guaranteed”.
Spectators, the CyBC official added, will be able to continue watching “quality” CyBC-produced TV serials, as well as serials from abroad, documentaries and upgraded news shows.
Banning advertisement spots from CyBC will not affect the broadcaster’s commercial department comprised of “three or four persons” as some can be assigned other duties.
The CRA, which regulates the electronic media landscape, was not immediately available for comment.
According to the auditor’s report, CyBC’s ratings were lower in 2017 than those of private competitors.