Hit hard by COVID-19, broadcasters send revised price estimations to BARC
BARC says it is mindful of the situation and has already introduced multiple cost-cutting measures & will continue to review them regularly
COVID-19 has spared none, and among the various organisations coping with the crisis is BARC India that has its earnings linked directly to the revenue made by broadcasters.
Sources in the industry say broadcasters who are expecting a loss of up to 50% in 2020 have already sent revised payment estimations to BARC for consideration. This comes within two months of sharing the routine price estimations that were sent around February-March.
With the pandemic bringing all production work to a standstill and leading to a drop of up to 75% in AdEx, broadcasters have revised their annual estimations and requested BARC to reconsider the same. A drop of up to 50% in the earnings of broadcasters can cost BARC the same amount in terms of earnings. One of the broadcasters, who too has shared a revised price revenue estimation, claimed that BARC in its response has said it will take a final call after the quarter is over and as they get closer to the estimations.
When contacted by exchange4media to understand how BARC has been preparing to handle the crisis, it sent a detailed reply saying considering the severity of the crisis it has already taken internal measures to cut cost and is open to reviewing the situation regularly.
“Price estimation is an annual process. Like last year, we had already taken estimates from stakeholders earlier in the year. However, considering the COVID-19 outbreak, we are mindful of the situation and understand these are tough times for everyone including BARC India. We have already introduced multiple cost-cutting measures at our end and we will continue to review regularly,” said BARC in its reply.
It further said it’s working closely with the stakeholders to manage the cash flow. “We have already extended our existing price structure until June 30, 2020, for all our subscribers. We believe this is a crucial period for us as well as for the industry at large and our subscribers can count on us to support their business.”
BARC has also expressed gratitude to its employees who have volunteered to take a pay cut to help the situation. “We are grateful to the staff of BARC who have volunteered a cut in their salaries. It speaks of a strong commitment, BARC and its team have towards the Industry,” the statement added.
However, sources in the industry say it’s a bit early for BARC to start worrying. “If the problem persists for over six months, the industry will have to work on solutions to ensure BARC operations remain unaffected. Hoping that normalcy will come within a month or so, the industry should be able to sustain it,” said a senior industry person.
Industry leaders have also reiterated that under no circumstances can BARC operations get affected as it will directly impact the working of the entire industry. However, they unanimously believe that TRAI’s recommendations for upgrading BARC has to be put on hold for now. “These are the times when we are ensuring that we are able to sustain and operate BARC until the industry recovers from the COVID-19 crisis. No one has the funds to even think of upgrading it,” another senior leader added.
Meanwhile, sources in the industry have shared that BARC is a balance sheet healthy company with a positive cash flow with an approximate top line of Rs 300 crore. It is a 100 per cent funded company that had a set-up cost of Rs 180 crore. The television rating body has an equity ratio of Rs 15 lakh and according to trusted sources, 84-85 per cent of costs are borne by broadcasters. However, apart from broadcasters IBF, AAAI and ISA are 60:20:20 shareholders in BARC.
Broadcasters are committed to pay 0.8% of their ad revenues to BARC or Rs 15 lakh, whichever is higher, but since the contributions to the industry body are linked to revenues volumes, the big broadcasters end up paying more than the smaller ones, sources informed.
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