October 1: 10+2 ad cap implementation or status quo?

Adherence of ad cap from Oct 1 looks bleak because the economic scenario & timing do not support it. Differences among b'casters & recent stay orders from TDSAT have only added to the chaos

by Abhinav Trivedi
Published - Sep 27, 2013 8:11 AM Updated: Sep 27, 2013 8:11 AM
October 1: 10+2 ad cap implementation or status quo?

TRAI in its mandate, in the month of March, had issued a notification to all broadcasters to restrict the advertisement limit on their channels to 12 minutes in an hour. The reason mentioned by TRAI was significant consumer complaints and appeals against excess advertising on channels. The mandate included 10 minutes of commercial advertising and two minutes of self promotion advertising. The regulation had to be implemented by the channels in its entirety from October 1. As per the mandate, if any broadcaster failed to comply with the regulation, criminal proceedings will be initiated against the respective broadcast owners.

News Broadcasters Association (NBA) managed to get a stay against the TRAI order in August by filing a petition in TDSAT. Recently, select music broadcasters have also got a stay order from TDSAT over 10+2 ad cap. News and music broadcasters have been vocal about the fact that being frequency channels, they have limited content, coupled with low subscription revenues and high carriage fees, they extensively depend on advertisements for revenue.  News broadcasters even alleged that the Government is trying to stifle them through the mandate, which would affect their margins, just before the election season begins.

Mainline General Entertainment Channels (GECs), which are perceived to be benefiting the most from the mandate, are divided over the diktat. It has been learnt from sources that Star Plus, Zee TV and Colors will be following the mandate, while Sony TV will refrain from the implementation. Various regional channels have also decided to voluntarily oppose the cap.
Sources we spoke to have also mentioned that the channels which are opposing the mandate might give reference of the recent TDSAT stay order for music broadcasters. It has also been learnt that every broadcaster is dealing with the TRAI mandate in its individual way. Some are opposing it, while some are following it, which reflects lack of holistic consensus over the issue.

As decrease in the inventory would imply increase in the inventory cost, the advertising fraternity is opposing any rate hike. In a recent development, ISA also sent a notification to IBF that it would not cater to any rate hike in the contemporary environment of economic gloom.

The notification said, “Advertising on network channels is a part of monthly brand media plans and the act of some of your members in reneging the subsisting contracts will lead to under-deliveries of media plans, causing business losses and hardship to our members. It is wholly wrongful and arbitrary on the part of some of your members to take unilateral action in reneging on subsisting contracts on account of purported self advertising cap.”

It further added, “These members of IBF are looking to unilaterally pass the entire cost and burden of self-imposed ad cap onto the advertisers, without any discussion and agreement. We find this approach of such members of IBF incorrect and unjustified.” 

The broadcasting fraternity is therefore divided over the implementation. Various experts also suggested that the chances of implementation of 10+2 ad cap from October look bleak, as not only the timing but also scenario of implementation is wrong. The regulation, as per them, should be imposed when the economy improves and broadcasters start receiving benefits of DAS, either of which is unlikely to happen before the 2014 General Elections.

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