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TRAI suggests self-regulation in ratings; some recommendations differ

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TRAI suggests self-regulation in ratings; some recommendations differ

The Telecom Regulatory Authority of India’s (TRAI) draft recommendation on policy guidelines for the ratings system in India that was issued on July 24, 2008 has mixed signals for the broadcasting industry. TRAI has stated that there should be no Government intervention in ratings. All relevant stakeholders of the industry, such as broadcasters, advertisers and advertising agencies, have always been vocal on the fact that ratings in India should be self-regulated and free of Government intervention. On that count, TRAI has agreed with the industry, and that is one clear positive aspect of this draft recommendation.

The problem comes in the salient features of the draft recommendation, as the proposal itself contradicts the notion of self-regulation.

Self-Regulation. Conditions Apply*

TRAI has recommended the recently-constituted Broadcast Audience Research Council (BARC) to be the sole custodian of the next generation of ratings in India - a move that has been warmly welcomed by the industry. Shashi Sinha, CEO, Lodestar Universal, said, “We are very happy that the BARC has been recognised.” The sentiment was echoed by Madhukar Kamath, Chairman, Mudra Group, and President, Advertising Agencies Association of India (AAAI), who also added, “The BARC is an initiative of the industry. We are glad that the TRAI has acknowledged that.”

Where BARC has been vested with all the powers, it is all tied back to the Ministry of Information & Broadcasting (MIB). TRAI recommendation has stated that two MIB officials should be nominated on the Board of Directors of the BARC. Indian Broadcasting Federation’s (IBF) President Jawahar Goel didn’t offer any comments on this, and stated, “We still do not know the details of what they are proposing. We cannot comment anything until we know that. On a broad note, however, the Ministry shouldn’t be involved in regulations. They have no right to be a part of this.”

This can change if BARC agrees to the TRAI recommendation that says that BARC should sign a MoU with MIB for its organisational structure, functions and methodology. TRAI has also said that MIB would provide the key eligibility norms for the selection of rating agencies, and their performance obligation norms. At least these clauses question the very premise of the suggested self-regulation in the TRAI draft.

Difference of Opinion

The industry is divided on these draft recommendations from TRAI. One point that has raised concern among the BARC officials is the involvement of the MIB in the BARC Board of Directors and the MoU that is suggested to be signed. Industry officials are divided on this. No official comments were forthcoming on this, but understands that some of the industry heavyweights see the inclusion of MIB on BARC Board as a small price to pay for the recognition that BARC would be getting from TRAI as the sole custodian of ratings. Some other officials see it as a beginning of Government interference in regulations.

The second clause of ‘Cross-holding’ states that no single company/legal person, either directly or through associates, shall have substantial equity (more that 10 per cent) holding in more than one rating agency. It also states that a promoter company / legal person / directors of rating agency cannot have stakes in broadcaster, advertiser and advertising agency either directly or through its associates. Similarly, a broadcaster, advertiser or advertising agency shall also not have any stake in ratings agencies.

This clause can create discomfort for TAM Media Research, as the company is owned by ACNielsen and Kantar Research. Kantar is a part of WPP that dominates the media space in India through many of its brands.

The IBF and AAAI members would be meeting over the next couple of days to discuss these points as the response to the draft has to be sent to TRAI before July 29, 2008.

The problems of being BARC

Even as BARC officials are elated with the recognition, some ground realities have to be faced. The post of BARC Chairman, that was left vacant when Pradeep Guha exited ZEEL, is yet to be filled. IBF is expected to nominate its candidate for this post on July 25, 2008. The not so easy part of it is appointing a CEO for BARC and setting up the office. TRAI has given a January 2009 deadline to BARC to initiate its activities, and this means that the time left to set up an office is not much.

Also, BARC would embark on an establishment survey to create the base that would help it design its panels going forward. Paritosh Joshi, President, STAR India, and another key member of the BARC, explained, “The need for a deeper level of study is inherent. The establishment survey itself would bring incredible amount of data and insight into the Indian viewers to the table. This study would also help in later stages when BARC would have to design sample for the various research that it would conduct going forward.”

A study of this scale that attempts to be an NRS/IRS equivalent of television would take a period of at least six months to be in place. To meet that deadline, the BARC needs to commence work for that study already but there is no action on it yet. It is understood that the BARC would be opening this for a global pitch and that would take significant time too.

It is also understood that an amount of Rs 2 crore has been kept aside for setting up BARC. Around 80 per cent of this has been given by IBF, 15 per cent by AAAI and 5 per cent by ISA – the three bodies that comprise the BARC. These funds are given as an advance to BARC and would be adjusted in later stages.

A new era of ratings dawn

Irrespective of the changes that this draft would see, a new era of ratings is around the corner. As some of the industry experts had put it, in the new phenomenon, the vendor is no longer the guy who designs the research, conducts it, audits it and then markets it. The ownership of research is very clearly divided from its production, and some believe that that would bring great advantages too. Industry heads are quick to state at the same time that this doesn’t spell doom of any kind for organisations such as TAM Media Research just yet. Even as names like TNS or OzTAM may now be heard in the Indian ratings systems, bodies like TAM would still be an integral part of the next generation ratings.


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