A Progressive policy move: IBDF welcomes end of 10+2 ad cap

The Indian Broadcasting and Digital Foundation (IBDF) has welcomed the Ministry of Information and Broadcasting’s decision to do away with the existing 10+2 advertising cap for television channels, calling it a significant and progressive policy move that will provide greater flexibility to broadcasters.

The development follows sustained representations by various broadcasting industry bodies to the government seeking a review of the advertising framework. 

The government's decision marks a shift away from the calibrated relaxation of advertising limits that had been under consideration and towards a more market-driven framework for television advertising. Industry stakeholders had previously proposed alternatives ranging from increasing the permissible advertising time to 15 minutes an hour to allowing market forces to determine advertising duration.

IBDF says framework needed to reflect changing media landscape

In its statement to e4m, IBDF said it had been relentlessly following up with the government and the Ministry of Information and Broadcasting on the issue, making sustained representations on behalf of broadcasters.

The foundation said it had consistently highlighted the need to revisit an advertising framework that was designed for a substantially different media environment.

"The television ecosystem has undergone a fundamental transformation over the past decade," IBDF said, pointing out that broadcasters now compete not only with other television channels but also with digital platforms, streaming services and social media for audience attention and advertising spends.

According to IBDF, while digital platforms have considerable flexibility in determining their commercial inventory, linear television has continued to operate under prescriptive advertising restrictions.

The foundation said the removal of the 10+2 framework would therefore help create a more level playing field for television broadcasters and allow them to respond more effectively to market demand and changing audience behaviour.

The government’s move comes against the backdrop of increasing competition between traditional television and digital platforms for advertising budgets. The government had been consulting broadcasters, advertisers and advertising agencies on changes to the existing advertising framework before deciding to abolish the cap altogether.

'Meaningful shift towards regulatory forbearance'

IBDF described the decision as an important step towards regulatory flexibility and forbearance.

The foundation said the market dynamics of television have changed significantly, with broadcasters facing rising costs and increasing competition from platforms that operate without a comparable statutory advertising ceiling.

"IBDF is grateful to the Ministry and the Hon’ble Minister for Information and Broadcasting Ashwini Vaishnaw for considering the industry’s representations and taking a decision that will provide broadcasters with greater operational and commercial flexibility," the foundation said.

The decision could allow broadcasters to determine their advertising inventory more dynamically, based on advertiser demand, audience behaviour and the economics of individual programming properties.

However, the removal of the cap does not necessarily mean broadcasters will automatically increase advertising loads. Industry executives have argued that market forces themselves would act as a check on excessive commercial interruptions, as viewers could shift away from channels carrying disproportionately high advertising volumes and advertisers could respond to changes in audience engagement.

Relief comes ahead of festive advertising season

The timing of the decision is particularly significant for broadcasters as the industry enters the crucial festive advertising cycle.

The August-December period is traditionally important for television advertising, with broadcasters looking to monetise premium programming, festive specials, reality shows and major entertainment and sporting properties. The removal of the advertising ceiling could give broadcasters additional flexibility as they negotiate campaigns and commercial inventory with advertisers.

For the television industry, the move is therefore being viewed as a potential revenue positive at a time when broadcasters are dealing with fragmented audiences, rising operating costs and intense competition from digital media.

The decision also goes beyond the 15-minute-per-hour relaxation proposed by the Indian Society of Advertisers. The Advertising Agencies Association of India had advocated a market-led approach without government-prescribed advertising durations, while broadcasters had pushed for complete regulatory forbearance.

BARC ratings remain the next major industry concern

While the abolition of the 10+2 cap provides a significant regulatory relief, the broadcasting industry continues to await the restoration of television audience measurement by the Broadcast Audience Research Council (BARC).

BARC ratings remain unavailable after the Ministry asked the measurement body to withhold ratings pending registration under the new television ratings framework. Ratings were released only up to week 24 of the April-June quarter before the suspension.

The absence of current television ratings has emerged as a major concern for broadcasters and advertisers ahead of the festive season because audience measurement is central to media planning, inventory pricing and campaign evaluation.

As a result, while the scrapping of the advertising cap is being seen as a major step towards greater commercial flexibility, the industry's attention is now likely to remain focused on the return of BARC ratings.

For broadcasters, the combination of greater freedom over advertising inventory and the eventual restoration of a reliable television ratings currency could have a significant bearing on the industry's ability to monetise the upcoming festive advertising cycle.

The government is now expected to work out the implementation mechanism and any amendments required to formally give effect to the decision.