Licence fee waiver by MSRDC augurs well for Mumbai OOH ecosystem: Experts

OOH industry experts weigh in on the recent rebate and extension granted by MSRDC to all advertising contracts for the lockdown period

e4m by Noel Dsouza
Updated: Sep 2, 2020 9:40 AM
MSRDC Development on Liscence Fees

Maharashtra State Road Development Corporation (MSRDC) has helped Mumbai OOH players score a big win on the licence fee issue. OOH business is highly dependent on the number of footfalls to the sites. Due to the nationwide lockdown, the transit media locations were left vacant, leading to media sites having zero visibility. To add to their woes, OOH owners had to keep paying licence fees for the sites purchased.

In a verdict that was passed last week, Mumbai OOH companies were put out of their misery as MSRDC took into consideration the appeal by the OAA (Outdoor Advertisers Association) and waived off the payment of media instalments. This complete exemption is for the lockdown period which is from March 23, 2020, to June 30, 2020.

Henceforth, from the July to September quarter, media owners will have to submit 25% of the compensation amount to be paid for those particular months. As for the quarter ending in December 2020, the media owners will have to pay 50% of the amount to MSRDC. Business will be as usual from the month of January 2021 and the fees will be back to the rates they were before COVID.

The media owners, once they accept the relief extended by the corporation, will not be able to back out and will have to pay according to the new provisions. The members of OAA have to share a contract-wise representation on the corporation's decision in a period of 15 days.

e4m spoke to Mumbai OOH players for their opinions on this latest development and how this will help them revive the losses incurred during the lockdown period.
According to Mandeep Malhotra, Founding Partner & CEO, The Social Street, this relaxation is a relief for the industry struggling for survival under trying circumstances. He remarked, “It surely helps temporarily hold on to the reserves. It just might help protect some jobs if the business starts reviving.”

Jayesh Yagnik, CEO, MOMS Outdoor Media Solutions, remarked, “We all have seen the worst in the first quarter of 2020-21 and things have slowly started coming back to normal from Q2. A decision like this from MSRTC is most welcome, which will surely help the industry as a whole. It was much needed and not only MSRTC but also the other authorities, including railways, should consider bailout packages for OOH media owners. It will not be possible for the media owners to survive on the bided tender price during this difficult time. OOH is one of the worst-hit industries during this lockdown and aid like this certainly will help the industry as a whole.”

Yagnik added that the benefit must get passed on to the actual client when they advertise on such media. He says, “When the benefit will be passed on to the client, their faith in the media not only increases but also OOH as a whole gets benefited. Everyone has suffered the losses during this tough time but rather than looking at an opportunity to minimize the losses one has to look at maximizing the profit by passing on these benefits by the way of discounts on the media price to the actual end-user. I am eagerly looking forward to similar verdicts from other government authorities which will help the faster revival of this industry.”

Fabian Cowan, Country Head, Posterscope India, commented, “This is certainly a positive development. This relief will be welcomed by all media owners and augurs well for the out of home ecosystem. The flexible instalments for the next two quarters is a good reprieve for the media owners."

Yogesh Lakhani, CMD, Bright Outdoor Media said, “It’s really great to hear from MSRDC on this news. Since March 20th no exciting or motivating news has been read, heard, or imagined. This is a relief, a step which they have taken to revive the economy back to normal. As said little initiative goes a long way it will not go waste and inspire other government departments to also oblige the OOH industry to revive. This will ensure that clients start advertising and the goal/targets can at least be achieved to sizeable and sustainable rather than 100% thanks to MSRDC.”

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