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Guest Column: Multiply TV ad inventory

25-May-2012
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Guest Column: Multiply TV ad inventory

Only thing that is constant in the TV land today is change. In the next few years, the TV industry of India will look far different from what it is today.

The big drivers for this change are digitisation drive by the government, ushering in of HD channels and rationalisation in terms of advertising and content time that is being driven by TRAI.

Largely the TV viewer is expected to get a quality experience, albeit at a higher subscription price, and the advertiser gets a better environment for its communication at competitive spends.

Although completion of digitisation of cable is expected to increase subscription revenues for broadcasters, TRAI’s current ruling of fixed advertising inventory is expected to put pressure on the broadcaster’s revenue.

To accommodate reduced ad inventory, broadcasters need to increase rate of advertising to compensate for lesser advertising minutes. But it needs to be seen whether advertisers are going to pay more for the same advertising time.

If there is increased viewership then they would, as their CPRPs would remain intact. But assuming increased viewership across board is a fallacy. It is improbable that existing viewers would view TV for more time or new viewers would start watching TV, just because ad inventory has been reduced.

It is clear that both broadcasters and advertisers need to look for a new status quo. It is in their interests to explore how best to make of the current situation.

It is probably the right time to explore whether we can get more out of the fewer ad inventories that is going to be available.

Amagi’s platform for geographical splitting of ad inventory is one possible way to extract more out of existing ad inventory. Think of scenario where a TV channel in HSM can sell the same ad spot to different advertisers in North, West and East.

If one splits the current Rs 100 ad spot as, North at Rs 70, West at Rs 70, and East at Rs 50, there is extra Rs 90 accrued on existing ad inventory. There is significant increase in effective rate, by leveraging the efficiencies that already exist in these TV channel viewership.

Instead of increasing existing effective rate by 30-50 per cent, this could be a way to enable existing advertisers to think finer in terms of their target market, as well bring in a whole new set of regional brands and businesses that found national TV footprint as expensive and high spillage.

Immediately this enables TV channels to multiply their inventory, increase their accrued effective rate for this inventory and in the process enable new set of advertisers to come into their platform.

With technology innovations like what Amagi has, it is possible for TV channels and advertisers to have a win-win situation without impacting the viewer experience.

Interestingly, International TV networks, for localising country-specific feeds across Asia-pacific, Europe and Latin America are in the process of licensing the same technology from Amagi.

With complete integration into the broadcaster systems, Amagi’s technology is completely managed and controlled by broadcasters, over their existing satellite infrastructure.

Technology innovation is one possible way to enhance benefits across the TV media ecosystem.

Indian TV industry has an opportunity to show the world that by leveraging state-of-the-art technology innovations, it can make challenges into long lasting opportunities.

Change, hopefully will bring in a vibrant TV viewership leading to a profitable and robust TV industry.

The author is Co-Founder of Amagi

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