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IBF imposes input cost inflation surcharge to offset uneconomic growth

08-October-2007
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IBF imposes input cost inflation surcharge to offset uneconomic growth

The Indian Broadcasting Foundation (IBF) has unanimously chosen to recommend implementation of a blanket 25 per cent input cost inflation surcharge on all rates that are currently in force by its member broadcasters with all their customer accounts across the country to partially offset the impact of the cost inflation.

An official communiqué informed that following a meeting in Mumbai on October 5, the IBF recommended that the surcharge take effect from October 16, and apply not just on new deals that are executed after this date, but also on continuing deals that have been previously executed.

IBF President, Jawahar Goel, said, “This correction was long overdue and will enable our member broadcasters to continue delivering compelling, high quality content to millions of viewers even as advertisers continue to enjoy one of the world’s lowest cost per television contact.”

Following the meeting held to discuss and determine an appropriate approach to stem and offset the impact of the cost inflation, an advisory is being issued by the IBF Secretariat to all its members.

The communiqué stated, “The decision was taken by the IBF in view of the uneconomic advertising rates in the Indian television industry. Though the number of cable and satellite homes had grown from under 40 million to over 70 million homes across India in just five years, over the same period the broadcast industry has had to deal with flat prices for its advertising inventory on the one hand, and a galloping cost push on the other, as all manner of content – entertainment, sports, film, and even news gathering – become rapidly more expensive.”

The IBF noted that the rich diversity of content offered in the television bouquet that spanned news, entertainment, sports, infotainment, wellness and spirituality, children’s entertainment and many others, had resulted in strong growths in reach and time spent on the medium.

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