TV3 raises prime-time rates as state rival cuts ad prices

CanWest MediaWorks is raising the price of advertising on TV3 in prime time next year, as rival Television New Zealand slashes prices.

Prime-time advertising rates on TV3 for shows - including its flagship 3 News - will increase by 4 per cent on average for first three months next year, according to its quarterly rate card released yesterday.

Martin Gillman, chief executive of media planning and buying agency Total Media, said it was no surprise CanWest was more bullish than TVNZ given its steady, strong performance.

Meanwhile, ad rates on TV One in prime time will drop by 14 per cent on average for the quarter, according to TVNZ's rate card released this month, with the cut attributed to falling ratings and the softening advertising market.

Peak prices for TV2 - which is faring better than its sister channel in ratings - will fall 1 per cent on average for the period.

Industry figures said the modest TV3 price rises were "sensible", given uncertainty around how the economy will perform in the coming months.

Colenso BBDO media director Peter Myles said CanWest aimed to take share off its free-to-air rival.

"To go in soft in terms of increase, rather than being more aggressive on it, is probably pretty smart, given that we are all guessing what [first-quarter] demand is going to be."

However peak prices for ads on CanWest's youth channel C4 will fall 6 per cent on average for the quarter.

Myles said the drop in C4 ad rates was unlikely to make much impact.

CanWest's advertising revenue was around $142.4 million for the year to August 31, 2005. It is due to release its full year results - including latest advertising revenue - on Tuesday.

Shares in CanWest closed up 2c yesterday at $1.50.