Advertisers cautious ahead of new TRAI tariff regime

With the date for the complete migration to the new TRAI framework now pushed to Feb 13, advertisers have issued Release Orders in parts and not for the entire month

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The new regulatory framework for Broadcasting and Cable services has raised concerns among the various stakeholders despite TRAI’s assurance that “service providers have confirmed their readiness to migrate to new framework”.

The new framework was to be initially implemented from December 28, 2018, but to ensure a smooth migration and consumer convenience in exercising their options, the authority provided time until January 31 with service providers migrating to the new framework from February 1. 
However, the date for the migration was again pushed to February 6 and now it is February 13. 

The stakeholders have said that they are unsure if the consumers have chosen the channels of their choice, i.e pay channels, and that the disruption could result in a drop in viewership and reach of the channels, which could see advertisers taking a relook at their Television media plans. 

This has led to the advertiser sentiment being cautious and advertisers adopting a wait-and-watch stance. In fact, multiple broadcasters have confirmed that advertisers have issued the Release Orders (ROs) in parts —for a duration of seven to 15 days and not for the entire campaign/month.      

However, on their part broadcasters say that given the extended time period most consumers should have migrated to the new system. Ashish Sehgal, Chief Growth Officer – Advertisement Revenue, ZEEL said, “The advertisers are being cautious and are releasing the ROs in parts and the ROs for the first 15 days have been released. However, TRAI has mandated that no channel can be switched off till February 13, and this gives ample time for cable operators and DTH players to expedite the migration and populate the bouquet pricing among consumers. By then most households should be connected and this should not impact the overall performance and ratings of the channel.”

Jagdish Mulchandani, President - Finance & Distribution, Times Network said he expected revenues for the month of February to be better than January. “We see a minimum disruption on the ground and the advertiser should not see any impact on their visibility of the product when they advertise on television. In terms of revenues, we see a healthier February when compared to January and haven’t seen any advertiser pulling back on back on advertisements as far as ROs are concerned,” he said. 

However, a senior broadcast official, on condition of anonymity, said advertisers have so far released truncated amounts with overall budgets coming down. This raises the question whether the overall Television ad spends will be affected. 

According to Ashish Bhasin, Chairman & CEO, South Asia, Dentsu Aegis Network, “Overall, I don’t think there will be any reduction of TV spends. Everyone will be watching how things pan out carefully though, and as new information comes up the relative share of one channel vs the other might change. The new TRAI regime is an unchartered territory and there will be a transition period of four to six weeks after which things will hopefully settle down. The large and consistent advertisers won’t be affected by this transition. They’ll closely monitor the performance of channels and adjust spends accordingly between channels. TV spends won’t be significantly impacted.”

For the moment, with the status quo continuing till February 13 all channels will be available till then. But, going ahead, it will be interesting to see how things pan out as far as media strategies are concerned.  

Jyoti Kumar Bansal, CEO - PHD India said, “From an advertiser perspective, each agency and client partner will take a decision based on their requirements. OTT platforms are likely to attract more viewers during this phase, as we all are creatures of habit and viewers will want their daily fix of their favourite TV shows. It will be interesting to watch the mid-to-long term impact on change in viewer habits.”

 

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