Home >> Media-TV >> Article

TRAI ad cap can adversely affect economic growth: Ashok Venkatramani

16-May-2012
Font Size   16
TRAI ad cap can adversely affect economic growth: Ashok Venkatramani

The TRAI (Telecom Regulatory Authority of India) order on television advertising has come as a complete surprise and it has been issued without factoring in our responses to this challenge. There are huge implications that come from this. First, it completely upsets the business models of many channels and for mere survival, they will have to revisit the same. It does not factor the way the industry manages the ‘clock hour’. For example, news channels often have to skip ad breaks during major events as advertising during that time is inappropriate. If we can't carry forward our minutes, then it severely restricts our income and is not agreeable.

We would like our content to be on air throughout. In a sense, this is a requirement as per the role of a 24-hr news channel. And we should hence be able to monetise non FCT (Fixed Commercial Time) properties, but this is no longer permitted in the new advertising regulation. Genres such as sports too will have challenges on account of this order. Only placing ads when there is drinks break means saleable inventory goes down sharply – this can have huge repercussions.

We will have to study the order and its implications in greater detail before we can understand the full impact of it but the biggest blow, according to me, would be that the reduced inventory would lead to a steep rate hike. SME (small and medium enterprise) advertisers would be driven away and only the big brands can afford television now. Cost of brand building would go up sharply and this would lead to further slowdown in the growth of our economy. This is not a small thing, it is a dramatic change.

This rule will affect all genres in its wake – I cannot think of one television segment that will benefit from this. While there may be some channels that were following the 10+2 ad cap, if at all, as a genre, there is no domain that was following it. This reduction of inventory and clauses to curtail other revenue sources will bite every genre.

The news genre specifically gets seriously impacted by this order. News is a poorly differentiated genre and hence not all channels would be able command a price increase to match lower inventory. Also, given our compulsions on managing ad breaks, we will struggle to manage the clock hour especially during major events. This regulation upsets the business models of news channels.

As told to Noor Fathima Warsia

Ashok Venkatramani is the Chief Executive Officer of MCCS (Media Content & Communication Services) that airs channels such as Star News, Star Ananda and Star Majha, which will be renamed ABP News, ABP Ananda and ABP Majha from June 1, 2012

Follow Ashok Venkatramani @ashokv

Tags ABP News Ad Cap Star News TRAI Ashok Venkatramani MCCS

In an interaction with exchange4media, PC Musthafa, CEO & Co-Founder iD Fresh Food shares how the brand deals with competition and marketing strategies followed by them.

Varun Raina, Marketing Manager, Airbnb India speaks to exchange4media about the successful #LiveThere campaign and how Bollywood helps them connect with its young consumer

Tim Castree is all praises for his team in India and trusts it to be a result of “an excellent execution of agency’s global strategy” headed by Kartik Sharma

Siddharth Dabhade says Criteo’s technology allows brands to engage with shoppers, create relevant experience on retail apps, thereby driving sales and profits

right
left
EXCHANGE4MEDIA’S LOUDEST.IN HOSTS INAUGURAL EDITION OF MUSIC INC. IN MUMBAI EMINENT JURY CONGREGATES TO PICK IMPACT’S 40UNDERFORTY ACHIEVERS PORTER PRIZE & INSTITUTE FOR COMPETITIVENESS RECOGNIZE STRATEGIC ACUMEN IN COMPANIES DELHI AD CLUB-SAARC AWARDS 2018 RECOGNIZE EXCELLENCE ACROSS CREATIVE, MEDIA & DIGITAL AGENCIES BSNL & CALL2ACTION COMMUNICATION INDIA LAUNCH MOBILE ADVERTISING PLATFORM, INFOMO IN NEW DELHI CHILDREN’S RIGHTS ACTIVIST KAILASH SATYARTHI LAUNCHES BOOK ‘EVERY CHILD MATTERS’ SENIOR JOURNALIST VIJAY TRIVEDI LAUNCHES BOOK ‘YADA YADA HI YOGI’ BASED ON YOGI ADITYANATH EMINENT JURY CONGREGATES TO PICK IMPACT’S 40UNDERFORTY ACHIEVERS PORTER PRIZE & INSTITUTE FOR COMPETITIVENESS RECOGNIZE STRATEGIC ACUMEN IN COMPANIES DELHI AD CLUB-SAARC AWARDS 2018 RECOGNIZE EXCELLENCE ACROSS CREATIVE, MEDIA & DIGITAL AGENCIES MARK TULLY, OTHER JOURNALISTS HONOURED BY MUMBAI PRESS CLUB AT ANNUAL REDINK AWARDS TALENTED YOUNGSTERS GET TO PRESENT THEIR WORK BEFORE STALWARTS IN THE AD INDUSTRY INDIA RADIO FORUM 2018 RECOGNIZES EXCELLENCE IN RADIO INDUSTRY OFF THE CUFF HAS JOURNALIST ARUN SHOURIE IN CONVERSATION WITH SHEKHAR GUPTA IN MUMBAI IAA HOSTS FIRST INDIAA REGIONAL AWARDS (TELUGU) IN HYDERABAD BREAK THE CEILING TOUCH THE SKY 2018 SEES OVERWHELMING INDUSTRY PARTICIPATION 10TH EDITION OF ABC EUREKA AWARDS IN MUMBAI CELEBRATES WORK OF PARTNER AGENCIES EMINENT JURY PICKS LOUDEST’S 100 MOST POWERFUL INDIAN MUSIC BUSINESS LEADERS MODE LOFT BY SABGROUP LAUNCHES SIGNATURE MENSWEAR POWER DRESSING CLOTHING LINE TOP MARKETERS DISCUSS ART AND SCIENCE OF EFFECTIVE LISTENING @PITCH CMO SUMMIT 2018, DELHI

Guest Column: Co-founder & Strategy Director at Reptile FX dissects the endless possibilities of how an explainer video can meet various communication objectives

‘Do What Moves You’ campaign aims to shine a spotlight on the brand’s belief in the power of self-expression

Mathrubhumi Media School will offer PG diploma courses in print & broadcast journalism