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STAR hikes ad rates: Kevin Vaz explains why

27-April-2011
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STAR hikes ad rates: Kevin Vaz explains why

STAR India has announced 20 per cent hike in its ad rates across the network, which includes Hindi entertainment, regional including South channels and English entertainment and infotainment channels. The ad rate hike is effective immediately. This is the first time that STAR India has implemented an ad rate hike across its entire network channels. For the record, NDTV news channels are not a part of this increase but STAR India will announce the revised ad rates for NDTV channels also soon.

STAR India’s President Kevin Vaz speaks to exchange4media on the reason behind the move.

This is the first time you are doing something like this. Why now?
We believe we are delivering significant value to our advertiser partners. Just look at the development of the last two years. Since 2009, the C&S household has increased from 90 million to 116 million, which is a 28 per cent increase. STAR India’s network share has increased from 12.4 per cent in 2009 to 16.1 per cent this year. If you had to see it on a cost per thousand basis, two years back where we were getting Rs 20 for 1000 viewers, which as crude as it may sound, worked out to 2 paisa per viewer, and now we are getting Rs 12 per 1000 viewer, which is 1.2 paisa per viewer.

You have also increased your costs in the last two years…
Yes, we have. But increasing spends doesn’t mean we increase advertising rates. We are delivering value to our advertisers and with the way the television market has changed, there is a case for increase advertising rates. We have invested in experimenting with fresh, new formats, in innovating in various ways on-screen and off-screen. And we have also invested in delivery. Whether you see our new digital efforts, or our delivery and the focused route we took for HD experience for our viewers. The Network has worked to ensure that regional channels today are of national standard and quality. Why have we done all this? So that, the viewer has better experience and the advertiser has a more engaged viewer.

But was it fair to have blanket increase across all channels, given they are all performing in different competitive sets and genres?
In any genre you see right now – Hindi, Regional, English – all our channels have shown tremendous growth, some have even seen 50-60 per cent growth. A 20 per cent growth is the right number keeping all this in mind. There is increased competition in every genre but STAR has gone the extra mile. Look at English genre for instance – we have the leading channels of the genre. We have the Nat Geo network and a more premium service of the FX channels. We are the only ones who have invested in Indian programming like ‘Koffee with Karan’ or the new one ‘India’s Most Desirable’.

Where does NDTV stand in all this?
NDTV is not a part of this hike. We need to first understand and evaluate the channel’s current ad rate pricing and then take a call on when and how we increase the ad rates. We will come up with revised ad rates soon.

We have heard of Zee and Sun increase their ad rates annually – why did you not do it?
It is not that we did not increase ad rates. In the last two years, it was happening on a very case-to-case basis. What we have done now is increase the rates, across all channels, by 20 per cent. This is the first time we are doing this as structured as this. This applies to all new deals we will sign now and any deal that will come up for renewal.

Have you spoken to any advertisers yet?
We have announced this only now but we are confident that we would be able to get the advertisers to understand our view on this. As I said, we are truly delivering value and the advertisers and media agencies understand that.
 

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