10+2 ad cap: Star Plus, Zee TV, Colors agree to follow; Sony may oppose

Industry insiders believe that the division among broadcasters over 10+2 ad cap is likely to create a ripple effect in the industry. A clear situation will emerge within a month

by Abhinav Trivedi
Published - Sep 26, 2013 9:13 AM Updated: Sep 26, 2013 9:13 AM
10+2 ad cap: Star Plus, Zee TV, Colors agree to follow; Sony may oppose

Mainline GECs are divided over the 10+2 ad cap implementation from October. It is learnt from highly placed industry sources that Star Plus, Zee TV and Colors, and the respective networks they belong to, have planned to go ahead with the mandated ad cap. On the other hand, Sony and its network, MSM Group, may oppose the ad cap.

Although the implementation of ad cap would necessarily imply that there would be increase in the cost of inventory of the channels, it is learnt that the advertisers and marketers are not buying that logic. India’s festive season is round the corner and it is time for major marketers to advertise heavily, but low sales and gloomy economic scenario is not allowing them to cater to increase in the ad rates.

Consequently, experts predict that for some time, television would lose ad revenue to print media. Major advertisers are locking most inventory slots with GECs at earlier prices only.

News broadcasters have managed to get a stay order from TDSAT on the cap, and independent music broadcasters have voluntarily decided to oppose the ad cap. Most regional channels have also decided to violate the cap.

Experts we spoke to, on condition of anonymity citing the sensitivity of the subject, shared that the divided stand among broadcasters is likely to produce a ripple effect in the industry.  As individual broadcasters are dealing with the TRAI order in their own way, an industry consensus over the issue is unlikely as of now.

A leading regional broadcaster who is opposing the ad cap mentioned, “There is no question of following the ad cap and we are opposing it voluntarily. In this environment, we are not able to demand even a premium we charge in the festive season, forget a rate hike. We would lose even the existing advertisers we have in case of implementation.”

Experts believe that the mainline GECs are likely to benefit most out of the ad cap implementation, and hence, except Sony, which is already facing viewership decline as per TAM ratings, most of the GECs would be following it sincerely. Since there is no possibility of rate hike, most of GECs are ready to incur short-term loses against long-term gains.

A broadcaster, who is likely to follow the ad cap, shared “Those not following the regulation will realise the benefits once the action starts yielding results. This is for the benefit of the industry. One can’t run away from it. It has to happen in the future. Why not start it now and gradually feel the repercussions of an inevitable change? As far as rate hike is concerned, it is a matter of time.”

Indian Broadcasting Foundation (IBF) is likely to meet today for its annual general meeting.  An industry source said, “The issue of 10+2 ad cap is unlikely to be discussed today. These are big issues, and with the broadcasters themselves divided, there is a less chance of it being taken up at the AGM. But one can’t ignore the possibility completely as well.”

An expert summed up the situation, “From October 1, every broadcaster will deal with the cap in their individual way. A turnaround is likely to happen when TRAI would start sending prosecution notices to the channels violating its decision. Channels affected would then take the matter to the next level to TDSAT. A decision taken at that level will make the situation clear for everybody. Till then, everybody will do what they believe is correct.”

 

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