Commercial Advertising on Tv May Be Detrimental to Economy; Issue to Be Studied

The Israel Broadcasting Authority has strong reservations about introducing commercial advertising on television. As an independent, quasi-public agency, it has the power to do so without consulting any higher authorities. But it is expected to put the matter before the government, the Jewish Telegraphic Agency learned today. As spokesman for the Broadcasting Authority told the JTA that the question of commercial TV would be submitted to the government be- cause of the far-reaching importance of the issue and its potential effects on consumer habits in the country. One of the effects would be to increase private consumption, a development that would run counter to the government’s anti-inflation policies which try to keep prices down. A second detrimental effect would be to syphon advertising income away from already financially ailing newspapers. The government has set no date to consider the matter and is not likely to reach a decision without prolonged discussion, the Broadcast Authority spokesman said. He thought the Cabinet would set up a special committee to hear expert opinion. Israel’s nationally owned radio service has been carrying commercials for the past seven years. Its annual income from advertising is expected to amount to $2,4 million in the coming fiscal year. The Broadcasting Authority estimates that television advertising would yield about $2.1 million in the first year and would double that figure within the first three year. Income from license fees which every Israeli must pay to own a radio or tv set, is expected to reach $9.8 million in the coming fiscal year.

The question that will face the government is whether television can support itself on license fees which now amount to about $29.75 per set but may have to be raised. Commercial tv would enable the Broadcasting Authority to hold the license fee at its present level. The strongest opposition to commercial tv so far has come from newspapers. Pinhas Leibowitz, director general of the Israel Newspaper Publishers’ Association, told the JTA that in a modest economy like Israel’s, the high cost of producing tv commercials would divert the bulk of the advertising budgets away from printed media. He said such a development would force a number of dailies to close. Several Israeli dailies have shut down because of financial difficulties in recent years. He said the growth of radio advertising had prevented newspapers from enjoying the additional advertising revenues promised by the expanding Israeli economy. The annual growth of newspaper advertising was offset by the diversion of budgets to radio, he said. Another argument against commercial tv on which many Israelis agree with Leibowitz is that commercialization will degrade program content. Critics of Israeli television say the present level is not very high and point to world-wide experience as proof that content suffers as commercialization increases.