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Delaying ad cap to Nov 11 could increase ad revenues by 15%: Experts

03-September-2013
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Delaying ad cap to Nov 11 could increase ad revenues by 15%: Experts

News broadcasters have got a breather following Telecom Dispute Settlement and Appellate Tribunal’s (TDSAT) recent order directing the Telecom Regulatory Authority of India (TRAI) not to make implementation of 10+2 ad cap compulsory for news channels till the next hearing on November 11, 2013.

The News Broadcasters Association (NBA) has maintained that news channels will incur revenue losses exceeding Rs 500 crore if the ad cap is implemented at this stage. Earlier this month, NBA had issued a statement urging the Ministry of Information & Broadcasting (MIB) and TRAI to issue a notification to keep the implementation of the 10+2 ad cap in abeyance.

In order to find out how much benefit will actually accrue from TDSAT’s order, exchange4media spoke to a cross section of industry experts. However, since the matter is sub judice, quite a few experts refrained from commenting on the issue, while some spoke on conditions of anonymity.

When asked how the reschedule in ad cap would affect ad revenues in the festive month, the CEO of one of the leading Hindi news channels remarked, “It will not have much effect because the time period is only for one month and we can’t increase the ad rate for such a short interval of time.”

He added, “We have already requested earlier to implement the ad cap only when digitisation is panned out properly.”

On the other hand, RK Arora, CEO, ITV Network said, “This development is good for the industry. This will increase the revenues by 15 per cent.”

At the same time, he said that the situation is not all that great as the broadcasters were expecting the ad cap to come into play post December 2014. “There are various issues such as carriage fees and availability of set top boxes, on which TRAI is yet to take a decision,” Arora maintained.

Giving a different point of view, Pradeep Iyengar, President, EMM India, felt that it is the consumers who will suffer loss because on the one hand they are paying the subscription fees and on the other hand, they also have to suffer through the advertisements.

When asked how much the news broadcasters will benefit from the TDSAT order, Iyengar replied, “How does it impact them anyways? These channels play an important role in shaping political opinions, hence they have been getting away with it for so long. It is the consumers who have had to bear the brunt of ads.”

Speaking on the effect on the general entertainment channels, he remarked, “It is rather unfair on the GECs, but I’m sure they have worked out means to ensure that they do not lose much. They will anyways get compensated by advertisers who will not want to lose out during this festive season. The channels have had subscription revenues as well as advertising revenues to shore up their kitties.”

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Prior to joining Madison PR in 2012 Chaudhary was Group President Corporate Communications at Reliance Industries Limited.