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Advertisers & broadcasters unhappy over TRAI notification

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Advertisers & broadcasters unhappy over TRAI notification

Since broadcasters and news channels have come under the ambit of governance of Telecom Regulatory Authority of India (TRAI), the tussle between the former two and the regulatory body does not seem to end.

In a notification issued on March 22, 2013, TRAI issued an amendment in the third regulation of the ‘quality of service regulations 2012’ stating that ‘No broadcaster shall in its broadcast of a programme, carry advertisements exceeding twelve minutes in a clock hour’.

As per TRAI regulations, television channels are required to follow the ‘advertising code’ contained in the Cable Television Network Rules (CTNR, 1994) as amended from time to time. Since January 2004, broadcasting and cable services have been brought under the ambit of TRAI as it was agreed that these services qualify as telecommunication services. The advertising code with which TRAI governs the broadcasters is the CTNR, 94 advertising code.

TRAI notified standards of quality of service regulations in May 2012, which was veraciously opposed by broadcasting associations. After the tribunal authority of TRAI intervention, the regulation was amended and an open house discussion was held on November 23, 2012.

The TRAI has been arguing that broadcasting channels regularly cross the advertising restriction during broadcasting programmes and this regularly hampers quality restriction-less viewing of programmes by the end consumer.

The TRAI released document signed by Rajeev Agarwal, Secretary, TRAI, opining that ‘it has been regularly observed that a rampant breach of permitted duration of advertisement in an hour by large number of TV channels in brazen disregard to existing rules is executed’ .

To further establish a sound mechanism, TRAI document states that ‘every broadcaster shall within 15 days from the end of quarter submit to the authority, in format specified by it by order, the details of advertisement carried in the channel’.  In addition to this, the document stated that ‘the authority has also set up a reporting requirement in place to monitor advertisement duration for ensuring better quality service to the end consumer’.

Disgruntled broadcasters
The regulation has not gone down well with the broadcasting associations. Shailesh Shah, Secretary General, Indian Broadcasting Federation said, “As a principle, we are not against notifications. But the (10+2) cap on advertisements is not acceptable at all. Firstly, the authority does not have proper idea of the functioning of the channels. They have placed generic regulations but the mode of operation of news, sports and other live broadcasting is very different. They should be treated as separate entities while framing such regulations.”

He further added that we want self regulation for ourselves. “Censorship in channels has so far been self regulated and it is working fine. Then why should we be regulated by a body? This hampers creative freedom,” he said.

Is the timing of the regulation justified? Shah disagrees. “These regulations should be in line with digitisation. Once proper digitisation is ensured, we would have our revenue streams in place and then such regulations can be issued. This model is not economically viable and not be expected from 500+ channels in the country. The revenue streams have to be consolidated first,” he added.

The News Broadcasters Association also responded through a press release stating that         “The regulations have been issued at a time when news channels are facing a most unfriendly business environment”. The release further added that “dependence on advertising remains absolute with over 90 per cent of revenues coming from it”.

Despite Phase I of digitisation being implemented, the benefits have not yet accrued to broadcasters, particularly news broadcasters. Carriage fees continue to be high and most news broadcasters do not get subscription revenues. 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 even five years ago, the release said.

e4m tried contacting the Secretary General of NBA but he was unavailable for comment.

An independent cable operator in Mumbai, on condition of anonymity, said, “We had pitched to TRAI for giving us a pie of advertisement revenue from the broadcasters but the authority has not addressed the issue; this is sad. But we have not lost hope and will continue to ask for our share from the broadcasters.”

What do advertisers feel?
Arvind Sharma, President, Advertising Agencies Association of India said, “As long as the entertainment industry is regulated, things will only get worse. I believe there is no need for this industry to be regulated by TRAI.”

He further added, “Entertainment industry should be regulated and modified by the market forces. The media and entertainment sector is much as like other sectors. Such regulation notices not only curb revenue models but also hamper the growth of the channel. When newspaper advertisements are not regulated in terms of quantity, why this regulation should apply to broadcast media? There should be no regulation like such.”

But how will the advertisers who use television effectively affected by this entire gamut? Pravin Kulkarni, GM – Parle Products said, “For us, the overall inventory cost will be affected. The ad rates in channels will rise substantially. If the time for ads is regulated, there will be less window time for each ad and this would surely increase prices! We would be suffering at the end. I think it is a bad decision for the industry.”

Sharat Dhall, President, Yatra said, “The regulation is good from the perspective of consumer but not from the advertiser’s and broadcaster’s view. Therefore, TRAI should look for balancing act so that everybody is satisfied, if not happy. At the end, I also opine that the regulator should not interfere with the industry functioning. All these issues should be handles by industry bodies and market. Regulation is good but not like this. Industry and market should be the deciding forces instead of a regulator like TRAI.”

The road ahead
Both, the regulator and industry have their own points of view for the issue which are perpendicular to each other. Digitisation Phase II is still left to be executed and the M&E industry is at a crossroad where change is the only option. But the direction in which change shall propel will only be decided and seen in times to come.

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