Spanish TV in a planning stage: DTV, Pay-TV, RTVE.

Television in Spain is mainly on the "plan," since many projects are now in the planning stage.

* Canal +, of the two pay-TV platforms in Spain, is planning to become a 24-hour unscrambled service.

* Veo-TV is planning to change its terrestrial digital TV license into an analog service.

* RTVE, Spain's state broadcasting organization, is planning a reform to render it financially stable and more independent from political powers.

* The Government is planning to move the cut-off date for the switch-over to digital terrestrial television back two years, bringing it to 2010 from the original 2012.

In the midst of all these planning changes, some sense of stability in the television business was granted by more-than-rosy financial results for 2004. According to Infoadex, a Madrid-based research company, Spain's advertising revenues for the TV sector climbed 15.5 percent last year to reach 2.677 billion euro (US$3.51 billion).

Telecinco benefited the most from the ad spend pie, bringing 778.2 million euro (or $1.02 billion), a 20.7 percent increase from the previous year. Advertising revenue growth at RTVE's TVE was up 5.7 percent to 732.1 million euro ($959.7 million). Antena 3 reached the equivalent of $918.5 million with a growth of 25.7 percent. While advertising at Spain's satellite and cable platforms rose 55 percent to 26 million euro ($34 million), and the balance of the ad pie was shared among the eight regional stations.

On the heels of good news, however, follows a string of planned changes that could, ultimately, alter the face of television on the Iberia peninsula. By looking to become a 24-hour "clear" channel, Canal + is seeking the elimination of the restrictions--remnants of the 1989 pay-TV license--that imposed an 18 hours a day scrambled service.

According to Sogecable, which owns both Canal+ and Digital+, this demand does not require a change of legislature, because the company is not asking for a new license, but simply for a modification of the current authorization.

It is to be noted that Sogecable is the group owned by Prisa--publisher of the national daily El Pais and the radio network Cadena Ser--and by Telefonica, the country's national telephone company. Prisa, which is owned by Jesus de Polanco, is the editorial group closest to the socialist party currently in power.

Sogecable ended 2004 with losses of 156.2 million euro (52.6 percent fewer losses than the previous year) on revenue of 1.4 million euro and an EBITA of 286 million euro (an increase of 67.5 percent over 2003). The digital platform now has over 1.652 million subscribers.

Telecinco--Spain's first commercial broadcaster (52 percent of which is controlled by Italy's Mediaset)--has already vowed to oppose the change of original terms to the Canal Plus license. Antena 3, which is controlled by Planeta and Italian partner De Agostini, publicly stated that the change for Canal Plus would infringe upon "the most basic rules of free competition," and "slow down the process of introducing digital television," while creating the first monopoly on the European landscape.

If this wasn't enough for the established commercial television sector, the government has announced that it will also consider a request made by Veo-TV for a change of their license in order to transmit in analog, given the undeveloped state of digital terrestrial TV in Spain. A consortium of publishers, Recoletos Grupo and El Mundo (which are controlled by Italy's Rcs), owns Veo-TV.

On the public sector side, the role is reversed: While the present is bleak, the future is promising. Weighed down by a debt of almost seven billion euro, Spain's RTVE is searching for a new business formula. After nine months of deliberations, a so-called Committee of Wise Men (a group of professors and experts nominated by the government) has handed in a plan for reform. The main objective: a stable financial model for a more independent RTVE.

The experts are asking the government to assume the debt accumulated by the public broadcaster. But, once the debt is eliminated, no privatization has to be contemplated. Indeed, the new plan has advanced the current mix of state and advertising funding. Under the latest plan, though, state funding would need to account for 45-50 percent of the budget, while the advertising revenue would constitute the remainder. In addition, the plan does not exclude the possibility of imposing, in the future, a tax on TV sets or license fees, similar to those in use in the U.K. and Italy.

Under the new proposal, RTVE would gradually reduce the current advertising inventory, so that, in the next four years, ad time would shrink from the current 12 minutes, to 9 minutes per hour.

On the topic of digital terrestrial television, besides the anticipated analog switch-off, the Government has added two changes to the original plan: The elimination of the limit of three analog TV channels ownership, and an increase (up to 50 percent) of the number of radio stations allowed to be controlled by a single entity in certain regions.