Will 10+2 ad cap jeopardise efficiency of news channels?

News b'casters feel that the ad cap can seriously affect operational infrastructure and may eventually result in compromise of news value

e4m by Abhinav Trivedi
Updated: Jul 26, 2013 9:13 AM
Will 10+2 ad cap jeopardise efficiency of news channels?

At the time of filing the report, TDSAT had agreed to the hearing of the appeal filed by News Broadcasters Association (NBA) against the TRAI notification of 10+2 ad cap. All the broadcasters, especially belonging to the news genre, have vehemently opposed the notification issued by TRAI.

The broadcasting industry, which is already crippled with the recent turbulences over TAM ratings, gross billings, and heavy carriage fees, is yet to see full impact of digitisation. DAS Phase II, which was slated to be executed in 38 cities, has only been executed in 25 cities so far. The remaining 13 cities are yet to witness digitisation completely or have not been taken in the loop, citing political factors.

The industry strongly believes that unless full impact of digitisation is not seen, TRAI should not make it mandatory for channels to execute the cap. Channels have already brought down the ad duration in an hour to 18 minutes. The news genre, where no scheduled breaks are slated, is believed to suffer the most among all the genres; its the revenues may go down by 40 per cent.

Most broadcasters we spoke to said that the impact of digitisation, which was expected to reduce the carriage fees of channels, has been very minimal. Man Jit Singh, Chairman, IBF in an earlier interaction with exchange4media had mentioned that the reduction in carriage fees for channels has been almost 20 per cent. Individual broadcasters have although declined to give exact percentage of the carriage fees reduction but industry experts have mentioned that benefits of digitisation viz: Identification of the number of households viewing cable TV, reduction in carriage fees, increase in subscription revenues, etc. is very minimal.

Under such circumstances, smaller channels may shut down and established channels would have to increase their ad rates significantly. The advertisers, already coping with crippled economy, falling rupee, high inflation and weak domestic demand, would not be able to take on the extra increase in price.

Additionally, a statement issued by NBA in May 2013 had mentioned, “Over the last year or so, news organisations have not received any advertising from DAVP, which has cut rates to levels 75 per cent lower than they were five years ago”. The DAVP is the government’s own advertising and publicity agency. Advertisers and broadcasters are already at loggerheads over the TAM ratings issue. 10+2 ad cap under the “standard of service” norm issued by TRAI in May, has further added to the vows of the broadcasters.

The main objective of DAS of identifying the number of households watching TV has also not been fulfilled, with MSOs and cable operators now charging more subscription fees, citing that the viewer is now paying for a single TV rather than an entire household. Industry experts feel that Government should first let the impact of digitisation materialise. Till subscription revenues are not in place, advertising is the main source of revenue for all the broadcasters and all the news channels are heavily dependent on it. News broadcasters feel that such a step can seriously affect operational infrastructure and may eventually result in compromise of ‘news value’.

NBA in the statement had further mentioned, “With the general elections looming ahead, it would appear that this is an attempt to muzzle the media by taking away its ability to operate independently”.

Most news broadcasters we spoke to refused to comment.

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