Private television stations the world over depend on advertising revenues to stay afloat, and Ukraine is no exception. But in the last year, the country's private broadcasters have been struggling to find advertisers, and instead have been focusing on finding sponsors to help cover the cost of making programs.
'Ad revenues of TV broadcasters did not cover all the production expenses in 1999,' said Alexander Shlapak, commercial director at Studio 1+1. 'Studio 1+1 [as well as other TV stations] was unprofitable in 1999.'
According to a Reuters report, TV broadcasters' total revenues from advertising in 1999 ranged from $40 million to $45 million. But broadcasters' expenditures in 1999 were well in excess of $100 million, Reuters reported.
The shortage of ad revenues forced TV companies to look for other ways to raise money – one of them was to seek sponsors for TV programs.
Sponsors were needed for more than the broadcasters' own shows – imported movies and shows also required sponsorship. Ukrainian law states that advertising slots can be placed only at the beginning and end (not during) of feature films. As a result, blockbusters rarely show on Ukrainian TV, because it is difficult to cover the cost of buying rights to big movies with ad revenues.
Sponsorship deals can appeal to companies with tight ad budgets.
'The cost of sponsoring a TV program on Inter can range from $100 to $10,000, depending, mainly, upon the program's rating,' said Oleg Valyskov, commercial director at the television channel Inter.
'Program sponsorship packages vary in cost from $1,000 to $20,000,' Studio 1+1's Shlapak said.
In return, sponsors get publicity, without the expense of producing a costly TV ad.
Vinnytsa-based soft drinks company WinneyFruit in February signed a deal to sponsor the Studio 1+1 show 'How to Become a Star.' The company also sponsors Inter's 'Gentleman Show.'
'TV sponsorship increased our product's brand awareness, said Oleksandra Kolinchuk, marketing manager at WinneyFruit. 'As for the money, sponsorship was cheaper than placing TV spots in prime time.'
Industry News
Breaking state television's stranglehold on soccer broadcasting, private channel STB in mid March signed a contract with the National Broadcasting Company of Ukraine (NBCU) to air live 15 games in the Euro 2000 soccer competition.
Both UT-1, the first state channel, and STB will broadcast the Euro 2000 final live.
'A sponsorship package will be on offer in April,' said Gleb Kornilov, vice-president at STB. 'STB and UT-1 will seek advertisers independently, but we're now discussing a common procedure for selling air time.'
The deal marks a switch in focus for STB, which up until now concentrated heavily on political coverage.
'STB intends to develop sports broadcasting as one of its priority areas,' Kornilov said. 'We're now conducting negotiations to put Formula One on air in Ukraine in 2000.'
According to Kornilov, STB plans to expand its broadcasting coverage into Sumy oblast and the Crimean city of Simferopol by May. It will then reach all 25 regional centers in Ukraine.
Olena Nikolayenko can be reached at [email protected].
