Select music channels set to defy TRAI ad cap

Leading music channels may bleed if they implement 10+2 ad cap. In the situation of 'high cost, less inventory', advertisers will ignore the music genre in favour of GECs as they have far more reach, say experts

e4m by Abhinav Trivedi
Published: Sep 19, 2013 8:22 AM  | 3 min read
Select music channels set to defy TRAI ad cap

With news broadcasters managing to get a hold on 10+2 ad cap implementation, it seems to be the turn of music channels to appeal against the TRAI norm.

Highly placed industry sources have confirmed that music broadcasters such as 9XM, Masti TV, Manoranjan TV, E24, and few others, are likely to defy the ad cap scheduled to be implemented from October 1; the main reason being the huge losses in revenues that they might suffer if inventories are shrunk. None of the above channels agreed to comment on record when contacted by exchange4media.

A leading advertiser shared, “It is true that most of the music channels which operate independently and are not a part of big networks will not cut down their inventory post October. We have been conveyed the same by them. Music broadcasters like news are frequency selling channels. Therefore, cutting down on inventories would hugely affect their margins. Only the ones that are part of umbrella networks like MTV and VH 1 (Viacom 18)  and Sony Mix (MSM) are likely to adhere to 10+2 cap post October. Since these broadcasters are part of networks that also have GECs, they won’t oppose TRAI norm.”

Experts have been repeatedly been vocal that increase in the value of inventories post 10+2 will hugely benefit GECs. Major GECs have already hiked their ad rates. Music channels feel that an advertiser, in this situation of ‘high cost, less inventory’, might ignore the music genre completely as GECs offer far more reach.

A CEO of a leading regional music channel stated, “If a channel had 30 seconds of inventory and suddenly he has to cut it to 13 seconds, he would have to hike ad rate by 130 per cent. In the present economic scenario, who will pay that much money? Small advertisers will not be able to afford us and big advertisers will ignore us. This is crony capitalism. Carriage fee is still high. In case of FTA channels, they have to pay huge money to DTH and cable players as well. We may manage to survive, but small channels will be wiped out for sure. The 10+2 ad cap is an unhealthy development.”

When asked whether music broadcasters will collectively appeal against the TRAI order like news broadcasters did, the CEO said, “Things are in discussion. As of now, there is no blueprint in place to collectively appeal in TDSAT, but one cannot ignore the possibility given the contemporary scenario. We are starting with not following that 10+2 mandated ad cap.”

Experts we spoke to believe that music channels such as MTV, VH1 and Sony Mix, which are a part of large conglomerates, can afford to increase their prices by a considerable degree. But regional music players cannot take such measures.

A leading advertiser, on condition of anonymity, also confirmed, “One cannot ignore the possibility of huge friction among IBF members, as only big GECs are likely to gain from the 10+2 ad cap. The measure will not be pushing inclusive growth of channels. Only some will be benefited. This is causing rift among broadcasters and they are divided on the issue. The challenge is big and the industry needs to collectively think of a solution.”

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