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Onam FCT drop on Kerala channels highlights challenges for TV b'casters

19-September-2013
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Onam FCT drop on Kerala channels highlights challenges for TV b'casters

Digitisation, new business models and advent of new technologies has revolutionised the Indian entertainment industry. However, at the same time, TRAI’s regulation on 10+2 ad cap, to be implemented by October, has changed the market scenario.

GroupM’s revised forecast of ad spends for H2 has come down to 4.7 per cent from the earlier estimate of 7.3 per cent. Not only this, the report also states that, in pre-Onam period, FCT on Kerala channels has fallen by 13 per cent.

Onam being the most important festival for keralites, advertisers spend the highest during this season.

A senior broadcaster, on condition of anonymity, said, “I feel that the GroupM estimates are not correct. There is a 22 per cent fall in FCT. This has taken place due to the TRAI diktat on 10+2 ad cap, the first phase of which was implemented on July 1, 2013. Broadcasters have already hiked the ad rates. But with Onam being a very crucial festival for advertisers, I don’t think there has been a huge decrease in ad spends.”

He added, “Last year, Onam started from August 17 and continued till August 20. But this year, Onam lasted for a longer period – from August 17 to September 17. Though the time period was longer, we could not reach the expected 25 per cent growth. However, despite the tough scenario, we have seen a growth of 10-12 per cent during Onam.

According to Mohan Nair, CEO, Mathrubhumi Television, a company that started its operation recently, “Though there has been a slowdown in the growth of the sector, Onam was pretty okay. Sectors such as jewellery and automobile have seen a downfall. We hope the situation gets better.”

What can we expect in the future?
Nair said, “Overall the industry is seeing a slowdown. Though the market will get affected during the rest of the festive season, everybody will try to make up during the elections via government advertisements. I still think Kerala being a strong retail market, jewellery brands will definitely advertise as they have been doing in the past. We expect a turnaround in the economy and are keeping our fingers crossed.”

Meanwhile, a broadcaster from Kerala believes that after the implementation of the TRAI regulation, broadcasters will sustain by increasing tariff rates, as selling inventories will not be a big challenge for them. He also said that FCT still further shrink.

According to Anil Cheriyedath, Senior Business Director, Motivator, “Leading brands will spend more money as there will be lesser clutter in the market. Jewellery brands such as Bhima, Kalyan, Josco Jewellers and garment brands such as Kalyan Silks, Jayalakshmi, Lullu were active during Onam, spending adequate money for advertisements.”

He added, “After the implementation of 10+2 ad cap, brands will rationalise themselves in choosing the number of channels to advertise in. I don’t think there will be a major change in the market because of the TRAI regulation, but the direct impact will be seen later, may be in the next year.” 

Way ahead
While recounting the ways to fix the bottleneck, one of the broadcasters said that there needs to be an effective increase in ad rates. Nair feels cost cutting and finding new advertisers is the only way to get the positive growth.

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