Dissatisfied with DAVP ad rates, major broadcasters out of empanelment list

Effective from July 10, the new policy subjects news channels and GECs to five and six time bands, respectively

e4m by Saif Ahmad Khan
Updated: Jul 10, 2017 8:06 AM

In what is being described as a coordinated “boycott” of the Directorate of Advertising & Visual Publicity’s (DAVP) ad rates scheme, major broadcast networks have opted to refrain from agreeing to the new policy guidelines. As a result, the names of prominent news networks and general entertainment channels (GECs) associated with marquee brands such as Network18, Sony, Star India, TV Today and Zee Group, among others, are missing from the empanelled list of channels released on July 6. Formulated by the nodal agency, the guidelines were notified by DAVP on June 9.

For now, only the names of those channels are part of the list that agreed to the guidelines in writing. Their actions were in consonance with an earlier notification issued on June 14, which necessitated the need for the same to be offered new rates. More than 100 news channels and over 90 GECs have accepted the guidelines. The rates are to remain in force till December 2018 following which the Union Information & Broadcasting Ministry (MIB) may review the policy.   

Ad rates lower than expected

At the heart of the issue is the belief in the broadcasting fraternity that the rates being offered by DAVP are far lower than their expectations. Speaking on the condition of anonymity, a top media executive, who was part of the deliberations with the government, noted that a revision of DAVP ad rates was pending since long. The tedious process reportedly saw top government officials being changed over the course of the discussions. However, the rates notified by DAVP are “not conducive” since the broadcasters wanted higher rates.

The formula which has been devised by DAVP to determine the ad rates places the cost per rating point (CPRP) at 30,000. According to industry sources, with the Broadcast Audience Research Council (BARC) having updated its universe earlier in the year, broadcasters were gunning for superior rates. It was indicated that CPRP should have been in the range of 36,000-38,000, given the dual expansion/increase in urban and rural ratings. Previously, the CPRP was kept in the range of 23,000-25,000 by the government. “The bottom line is that the rates being offered by DAVP are significantly lower than the market rates and it is not agreeable to the broadcasters,” commented a senior media planner from a leading agency.

Unacceptable time bands

Besides the ad rates, the broadcasters are simply unwilling to accept the changes in relation to the increase in the number of time bands. In the previous regime, news channels were subject to three time bands of equal duration. Going forward, they are required to put up with five different time bands whereas GECs have six. “We had only asked for certain modifications to the government guidelines,” said a high-level media functionary, tasked with generating revenues for various channels. It was pointed out that in the interest of news broadcasters, the government should switch back to the “old split” of three time bands.

Supporting the notion, another veteran media executive explained that the three time bands provided broadcasters with enough opportunities to accommodate commercial break slots. In a breaking news scenario, the source argued, the channel might not go for an ad break. If there are more time bands of fewer hours, the possibility of missing out on ad breaks during breaking news coverage increases. Hence, a network becomes susceptible to revenues losses. “Any channel will object to it,” the source added. Meanwhile, another criticism directed towards DAVP guidelines was that unlike the erstwhile arrangement, DAVP clients are apparently not under any obligation to spread their ad spends across time bands. Therefore, they can “take any channel” at any “particular band” which means that if they wish to buy merely prime time slots, they can do so.

The road ahead

With the new policy set to come into operation from July 10, broadcast watchers are wondering whether it will lead to a standoff between private television networks and the government. exchange4media is given to understand that communication channels are active with broadcasters making their apprehensions known to the government. So far, the talks haven’t led to any major breakthrough. Despite an extension of 10 days, the policy guidelines, which were scheduled to be effective from July 1, couldn’t build a consensus with the stakeholders to resolve the stalemate.

The two broadcast industry bodies – the Indian Broadcasting Foundation (IBF) and News Broadcasters Association (NBA) – are very much in the loop, with internal letters doing the rounds. “We are going to meet as a board very soon. Some of these matters will be looked at, then,” an NBA board member told exchange4media. Though many are viewing the new policy as an attempt by the central government to arm twist the media, a highly decorated ad sales professional emphasised the need for broadcast companies to stand together. Given the political affiliation of some networks, the source was keen to know whether they will protest against the establishment for long. It was inferred that a split within the ranks may weaken the proposition of the broadcasters with the gradual fizzling out of the boycott.  

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