Adherence to the ad cap diktat by certain TV channels is not necessarily because of the norm, but in the present context the case is also of inconsistent demand-supply gap from the ad fraternity, according to industry experts. High inflation, moderately weak global and domestic market, and subdued consumer demand has affected the media spends by brands. Senior media planners and marketers have confirmed this.
The MSM Group recently executed the ad cap on all its channels. In an earlier conversation with exchange4media, NP Singh, CEO, MSM had said, “A few weeks ago, we have implemented the ad cap across our channels. All our channels are at 12-minute commercial time, as we speak today.” Talking about the ad rate hike, he said, “Rate hike will happen over a period of time as far as our network is concerned. Just because we have restricted our inventory it does not mean we will increase our ad rate suddenly. It never works that way. It will not be big rate hike immediately, but it will happen over a period of time.”
Interestingly, Sony has been vocal against the ad cap being implemented at this juncture since the beginning. In December 2013, then CEO of MSM Group Man Jit Singh had explained, “Our issue was to ‘phase it’ (ad cap) over time. We have worked out an arrangement with TRAI and we said that it has to be worked out together for everyone. Different broadcasters are impacted in different ways; channels in the news, movie, music genre and regional channels are hugely impacted as they have too many advertisers owing to the nature of their genre. If the regulation has to be implemented, it should be altogether for all the broadcasters. We had laid out a time frame, then certain members of the fraternity realised that their economics couldn’t sustain and so there was a break and that was a dispute, which finally went to the TDSAT. We and Sony have never been against the regulation. We just want to do it together with all the broadcasters.”
So, what is the reason behind this change in stance of MSM even as the matter is still in the court? Industry observers have indicated that it is not ad regulation, but inconsistent demand from the advertising fraternity that has reduced the advertising on the channel. Not just Sony, other channels too are struggling with inconsistent demand-supply gap. HUL recently withdrew its ads from Colors and commercial negotiations are being worked on. The FMCG major also had a phase of friction with the STAR Group.
It will be interesting to see how broadcasters deal with this situation. Although the situation varies for different broadcasters, the pinch of the gap is being felt across the industry.