Everybody has long ago got convinced that the duration of the advertisements on the Armenian TV with its meaningless plot and repetition has bored all of us.
And what do the Armenian TC viewers do when at the best moment of the film or show the commercial pops out? Of course, in their mind or audibly they curse Gorbachov, who collapsed this county, where there was no commercial. Others start to do the math to figure out how much money the TV companies are making due to the commercials. I personally know many of such cases. The soccer championship of 2010 also sincerely made us do this math. If our commentators think that the audience is getting irritated because of the sound of vuvuzela then we have to confess that that the commercials that pop out all the time are no less irritating. We neither see well the exit of the soccer players to the soccer field, nor the anthem, nor the viewing of emotions after the game. And all this is included in the footage. Indeed, they are saying it’s not the right thing to count the money of others. But the H1 is not a stranger to us; it is our public TV and is funded by the taxpayers’ funds. Thereby, it is supposed to suffice our needs. The H1 is considered one of the best TV channels of Armenia as it has a nationwide coverage and is accessible to Armenians living in different countries of the world. It means the cost of the commercials is higher than average. According to the H1 they are the TV station with the highest rating. However, before calculating let us define certain criteria. Let us mention that we will not try to exaggerate the revenues of the TV companies but will use modest numbers in our calculations. Thus:
1. The price of the commercial per minute fluctuates between 150.000 AMD for the top three TV companies of Armenia. It is clear that during morning hours there are fewer spectators and the price is cheaper and in the evening, during the so-called prime time the prices are the highest. You may agree that the H1, which considers itself a venerable TV channel, will define no less than 70-80 thousand AMD per minute for the commercial. If you don’t agree with this number it can be 50 thousand. However, the lowest rating TV companies do not set such a price for the minute especially when their coverage is in the whole world.
2. Do you agree what 25% of the airing time is commercial? It means that within an hour the TV viewer watches commercial lasting approximately 15 minutes. Is it exaggerated? Then, let’s say, 10 minutes. I think most of the people will agree with us even the housewives, who watch the soap-opera “for the sake of love.” In a word let’s set 10 minutes of commercial for an hour.
3. This last point may be considered the mild version of the previous point. It means we assume that commercials are showed only from the period of 10a.m. till 12a.m., which makes it 14 hours. It means we artificially reduce the volume of the commercials.
Now let us all together calculate how much money the public TV makes from the commercial within a year. 10 minutes per hour, 14 hours per day and there are 365 days in a year. So now we have 51.100 minutes a year. Let us multiply this by 50 thousand. So now we have. Now we have over 2.5 billion AMD (or 7.15 million USD). This is a quite impressive number, isn’t it? Now, maybe some “super-professionals” of television may blame us of incorrect calculations. Indeed, we can answer mind your own business; we have the freedom to discuss how much our H1 works at the expense of our nerves. But we can give them a better answer. So called FYI. The thing is that the method of our approximate calculation has a precedent. This is exactly how the State Revenue Committee calculated the incomes of Gala TV of Gyumri. Moreover, the Committee didn’t reduce anything and relied on the official price list. Nevertheless, let us go further. You know that the sum of merely the minutes and the advertisement cost per minute cannot give the exact picture of the volumes of commercial on H1 TV channel. The thing is that in the aspect of big commercial clients the price list is being bargained and the price is calculated for the whole year instead of minute by minute. Besides that the barter option is pretty wide-spread. The good is provided as reimbursement for the commercial. And finally the cash paid for commercials is usually lower than what the actual bank transfer (transaction) would register. It means that the actual picture is hidden. OK let us go a little further. Having considered all the side methods – barter, discounts and other options let us assume that instead of 2.5 billion 1.5 billion AMD is entering the H1 budget. Let us fix this number, however on the other hand this assumes that a lot of money is being concealed from the state. The revenues are in fact calculated. But perhaps it would be wrong to stop after all this because after knowing these data more interesting things are coming up. Thus, even if calculating with the minimum numbers the H1 annually receives 1.5 billion AMD only from the commercials (without taxes). If so than the public television should pay annually 260 million AMD VAT. Pay attention as we are only speaking about the VAT, which is included in the indirect tax type. Thus in the first quarter the VAT paid by the H1 should have amounted to 65 million AMD and not less. We are opening the list of the greatest taxpayers according to the data of the State Revenue Committee. During the period of January-March of 2010 by trying to find a number close to 65 million AMD next to the name of the public television. The public television, which appeared in the 321st position, paid only some 394.200 AMD as indirect tax for the mentioned period. This seems absurd. The picture becomes even more surprising when we check the amount of taxes paid by Kaim Company, which is 121 positions above the H1. Kaim has paid 66 billion AMD for the first quarter of 2010. The thing is that the company has bought for some 70-80 years the commercial time of the H1 and sells the commercial time to other companies itself. In this case it turns out that in order to have a well understanding of the commercials of the H1 we should have taken into account the factor of Kaim. In this case we have done the correct calculation. Indeed we also anticipate that a part of this amount is being pocketed as it deviates from the actual accounting. But this is not all. In regard of the VAT it is not so important whether the H1 pays this amount to the budget or Kaim. It is more interesting when we review the direct taxes – the profit tax and income tax. The H1 has paid 50 million AMD to the budget for the period of January-March of the current year and Kaim has paid 80 million AMD. It would be naïve to think that Kaim has at least 10% of the staff of the H1. Therefore, the most part of the direct tax is the revenue tax. This in its turn means that Kaim by reselling the commercial time of the H1 receives more income than the H1 itself. It is not hard to assume why the H1 has receded its commercial time to Kaim. And if you are not a supporter of the theory of conspiracy and think that the H1 works explicitly honestly and don’t have any connection with Kaim then we have the next allegation left, according to which unprofessional people work at the H1. Each of you can choose either of the options. And there is no third option as the official numbers fully exclude this option.