Eurovision song contest feels the pinch

Thea Garrett from Malta performs her song ''My Dream'' during a dress rehearsal for semi-final one of the Eurovision Song Contest in Oslo May 24, 2010.

OSLO (Reuters Life!) - A bit slimmer but still extravagant at 55, Europe's biggest song contest Eurovision is scaling down its starry ambitions to a harsh new economic reality.

Watched by some 124 million Europeans and staged by public broadcasters, the Eurovision song contest has seen its budget shrink by a quarter in 2010 and four countries have dropped out due to funding woes.

NRK, the public broadcaster from host nation and last year's winner Norway, has sold its rights to the World Cup to a rival to finance the pop festival and signaled it would not have the cash to stage another show if Norway wins again.

"Of course the economic crisis is affecting us, we have fewer countries competing this year and they all withdrew for the same reason -- budget cuts," said Svante Stockselius, Executive Supervisor of the contest.

"It may be good to stay out for a year, then come back the next instead of cutting back on children's programs or news," he told Reuters, stressing that turning a profit was not the motive behind one of Europe's most watched shows.

The Czech Republic, Montenegro and Andorra have dropped out of the competition altogether, while Hungary decided not to enter a contestant but will still air the show.

NRK said it will spend 211 million Norwegian crowns ($32 million) to put on the gala, which has grown in past years and now includes three nights of televised competition -- two semi-finals and a final this Saturday.

Last year, Moscow spent a record $43 million on a glitzy show which used 30 percent of the world's entire stock of LED screens on a lavish stage, with the Russian government reportedly footing the bill for some $30 million.

"It costs too much," said Inge Solmo, a Norwegian who wrote a book on Eurovision titled 'Absolute Grand Prix'. "In 1986, Norway organized Eurovision and spent 11-12 million crowns.

"I will feel sorry if Moldova or Azerbaijan win. Where will they get the money from to stage the competition next year?"

IN THE RED IN 2010

Stockselius said this year's competition is unlikely to yield a profit. The last country to gain financially from hosting Eurovision was Greece in 2006, benefiting from "less rigid" rules regarding commercials during the competition.

No commercials were shown during a two-hour semi-final on Tuesday, which as usual served up a mix of pop glitz and kitsch, styles ranging from folk-dance to ballad, tributes to ABBA and the Village People and featuring at times suspect choreography.

To help cope with costs, Eurovision attracted corporate sponsors Telenor, a Norwegian mobile group with operations across Europe, and airline Norwegian Air.

In the 1950s, Eurovision reached most of its audience as a radio broadcast. It has grown by leaps and bounds in past decades, opening up to new contestants and audiences in Eastern Europe and the Balkans, who have won seven out of the last 10 events.

Measured by the audience it commands, Eurovision remains a huge success. The number of TV viewers surged 18 percent last year while televotes -- which account for half of a performer's total score -- topped 10 million for the first time ever.

Stockselius maintains that the competition offers good value for publicly funded broadcasters' money and is less expensive, than most original content created by the TV networks themselves.

"It's a bloody good entertainment show," he said. "It's something you can sit down with your entire family and watch, be entertained, have your opinions about, laugh at, enjoy, vote and be a part of... It's a smart way of spending taxpayers' money."

(Additional reporting by Gwladys Fouche; Editing by Steve Addison)