Final Word from Tuesday, March 14, 2006
When CME bought back TV Nova, it gave fair warning that advertising rates were going to rise. CEO Michael Gavin spoke in his first teleconference with analysts after the purchase about a "cost-per-point" increase. CME needed to recoup the high price it paid for the station, and it seems to have developed a three-stage plan. First, support a sharp reduction in advertising on Czech Television by promoting the myth that the ad money would flow to new digital TV stations, thereby creating a more-competitive ad market. Czech TV would be pacified with an increase in the monthly user's fee. Second, delay digital TV, so that the ad money flowed instead to Nova (and Prima, to a lesser degree). Third, start raking in the cash. CME is now in stage three of the plan, and advertisers are kicking and screaming. They had time to prepare, but TV Nova has shown, once again, that it knows how to get what it wants. [Czech Republic Central European Media Enterprises CETV Česká televize]