New UBC should not carry adverts

Sep 05, 2005

GOVERNMENT is introducing a television tax from September 1. All TV owners will now have to pay sh20,000 annually per set.

GOVERNMENT is introducing a television tax from September 1. All TV owners will now have to pay sh20,000 annually per set.

This will raise an estimated 4 billion shillings annually to fund the operations of Radio Uganda and Uganda Television, soon to be combined into the Uganda Broadcasting Corporation. With this financial support, the new UBC will be able to buy better equipment and programming.

A similar system successfully operates in the United Kingdom where the British Broadcasting Corporation is funded by an annual TV licence. Both BBC television and radio have a very high audience share.

The British consumer accepts the TV licence fee as a good deal because the BBC does not carry advertising.

Commercial broadcasters in the UK still complain that it is unfair to have to compete with the BBC when it does not have to worry about making a profit. But again they accept the situation because the BBC does not compete with them for advertising revenue.

We now need to ask whether the new UBC should still carry commercial advertising if it is going to receive 4 billion shillings annual subsidy. If it is subsidised, it will be able to massively discount its advertising and take a disproportionate share of electronic advertising spend.

Is this a good deal for Ugandans who would be happy to miss adverts on UBC having paid the licence fee?

And is it fair to commercial broadcasters facing increasing competition for a limited amount of advertising to now be undercut by a heavily subsidised state broadcaster?

The way forward is to willingly accept the annual TV licence fee since that will help to build a quality state broadcaster. But the new UBC should not run commercial advertising if it is funded by the TV tax, because that would be unfair to both the Ugandan consumer and its commercial competitors.

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