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Business News/ Opinion / Online Views/  Advertising cap: industry vs consumer
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Advertising cap: industry vs consumer

The regulator seeks to impose regulation that will benefit consumers and a stellar crowd argues against it

Photo: Priyanka Parashar/Mint (Priyanka Parashar/Mint)Premium
Photo: Priyanka Parashar/Mint
(Priyanka Parashar/Mint)

It is remarkable how anxious the business and trade media is on behalf of broadcasters whose advertising time on channels the Telecom Regulatory Authority of India (Trai) is seeking to regulate. You would not think from the coverage that there was any consumer interest at stake at all, so breathless is the reporting on issues framed as the broadcasters see them. Or that Trai’s first recommendation paper on imposing a cap dates back to October 2004, which was the year the government of India asked it to look at the issue. That was after the Delhi high court in 2003 asked the government to consider whether a limit is needed to be put “in respect of time for advertisement". This recommendation paper said it was responding to the fact that “consumers have voiced strong complaints over the frequent and long duration of advertisement breaks".

The most recent background is that the recommended cap of 10 minutes of advertising plus two minutes of channel promotion per hour became a law in March, enforcement in stages was agreed upon, deadlines were missed, the regulator decided to prosecute 14 channels, then an industry body went to the Telecom Disputes Settlement and Appellate Tribunal and got a stay at the end of last week.

Haven’t broadcasters had time to get used to the idea? It is not as if the issue is new or has surfaced in an advertising slump period. It’s been something fended off by them for a decade till Trai got a boss who decided that he would see this through.

A regulator seeks to impose regulation that will benefit consumers and a stellar crowd argues against it! The minister for information and broadcasting wants it postponed till the end of 2014. The Indian Express in an editorial called Ill fitting cap suggested that advertising is not so bad—it even serves an educational purpose! And that the issue should be left to the market to decide.

Today you can Google till you are blue in the face, but will get little in terms of coverage from a consumer point of view. Mostly leading broadcasters who rubbish the proposal are quoted. TV reporters spout figures of shrinking ad inventories. Business reporters tell us that channels will be rendered unviable, and advertising’s creative fraternity will be affected because the advertising cap will also hit the advertising industry.

Yet, a tiny poll that 400-plus people took on the niche website I edit, read substantially by media professionals, shows a 73% vote in favour of not delaying imposition of the advertising cap till next year.

And whereas post digitization subscription revenue flow is visible enough to show decreased losses in some channels’ quarterly returns (NDTV, for example) and modest profits in others, the argument from bodies such as the News Broadcasters Association is that broadcasters are not earning enough yet from subscription revenue to be asked to take a hit on advertising revenue.

Nobody has to take a hit; you have to raise your ad rates. Colors did so by 30% from July, Star is doing so too. But there is also another point which is not discussed enough in the reporting and analysis. You rarely get reporters pointing out that there are many channels today which do not get 10 minutes of advertising at prime time, but are surviving. An industry analyst, Chintamani Rao, quotes AdEx data produced by TAM Media Research for the quarter ended March which shows that in those three months in prime time (7pm to midnight), 183 of the 340 channels AdEx monitors (about 54% of them) ran an average of more than 10 minutes of advertising per hour. Another 83 of them ran 15 minutes and more, and up to 33 minutes in an hour.

But at the same time, 42% of all channels monitored (144) did not carry 10 minutes of advertising per hour even in prime time, and 91 of those had 5 minutes or less, for a variety of reasons. Neither the broadcasting industry nor the advertising industry is collapsing because of this.

A week-long prime time monitoring that I directed in March this year of eight-hour-long daily news channel telecasts, showed something similar. There were days in the week when NDTV 24x7, CNN-IBN, Times Now and Doordarshan’s English bulletin had less than 10 minutes of advertising, including channel promos. These are not the channels which would suffer much from an ad cap. Their advertising rates are high enough to not depend on volume.

In contrast, the Hindi channels monitored tended to have between 20 and 30 minutes of advertising (or more) on most days except for DD News, the only one to drop below the 10-minute mark on a couple of days.

There is much indignation about the implementation coming during an economic downturn. But have there not been upbeat periods since 2004 when the idea was mooted, but industry refused to play ball?

Sevanti Ninan is a media critic, author and editor of the media watch website thehoot.org. She examines the larger issues related to the media in a fortnightly column.

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Published: 04 Sep 2013, 07:06 PM IST
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