Battle over 12-minute ad cap on TV hots up
BY SIMRAN SABHERWAL AND ABID HASAN Broadcasters at loggerheads with TRAI over regulation; feel it will be the death knell for many channels Consumer is King! This is one adage which everyone from marketers to the service industry follows. Now, it looks like even the Telecom Regulatory Authority of India (TRAI) is jumping to the TV viewers’ side as it looks to limit the amount of time that advertisements can be aired on television channels. It is asking broadcasters to comply with the 10+2 ad cap regulation which was first ruled by TRAI in May 2012. In effect, this means that no broadcaster shall carry advertisements exceeding 12 minutes in a clock hour in a programme. The clock hour commences at 00.00 of the hour and ends at 00.60. Any shortfall of advertisement duration in a clock hour shall not be carried over. Advertisements include not only the commercials, but also the channel’s own promotions for its shows or for the channel per se. TRAI also has the power to intervene if channels do not adhere to the ad-cap rule. With broadcasters opposed to this move, both the parties look set for a long battle ahead both in and out of court. On March 28, the broadcasters led by Man Jit Singh, President, Indian Broadcasting Foundation (IBF) and CEO, MSM met the Information & Broadcasting Minister Manish Tewari to present their side against TRAI’s regulation. On March 22, TRAI had asked the broadcasters to provide a quarterly report on the duration of advertisements carried in their channels. TRAI had said, “This regulation mandates the broadcasters to restrict the duration of advertisements in their channels to a maximum of 12 minutes in any given clock hour as prescribed in the existing rules. In order to monitor and ensure compliance of these regulations, broadcasters are now also mandated to report the duration of advertisement carried in their channels to authority on quarterly basis in a proforma by the authority.” This followed the notice TRAI sent to broadcasters last month asking them to provide reasons why ad cap limit was not being implemented during their shows. The broadcasters were given time till March 10, 2013 to send in their replies. For broadcasters, advertisements form the major chunk of revenues, and this regulation could hit their bottom-lines significantly. Post his meeting with the broadcasters, Tewari asked broadcasters to work out a solution with TRAI, and find a middle path. Speaking to IMPACT, Man Jit Singh had said, “The industry is dependent on advertisement but we don’t disagree with TRAI’s regulation. We want to implement this in a phased manner. We want to have a dialogue with TRAI and come up with a solution which will have consumer and broadcaster interest equally balanced.” Explaining the phase duration, he said, “Initially we want to start with a little higher number like 12+2 and over a period of time we will approach 10+2.” IBF is trying to work in such a manner that industry and consumer both will be protected and there will be some solution which is manageable and acceptable by all the stakeholders. When asked about the case which is also being battled out in court Singh said, “We prefer to find solutions among ourselves because court is the last resource.” Rajat Sharma, Chairman, India TV and Vice President, IBF said, “TRAI restrictions on advertisements sounds like a death warrant for news channels; we are already on death bed due to heavy carriage, low ad rates and lack of subscription revenue. Limiting inventory to 10+2 ad cap per hour will suffocate news channels.” Broadcasters say that with complete digitization still far from reality, they will have to continue to rely on commercial revenues rather than subscriptions. Broadcasters also believe that ad breaks and duration should not be decided by a regulating authority but be left to market forces and thus from a legal perspective it is outside TRAI’s purview to fix duration of advertisements. Deeply concerned about TRAI’s advertisement regulation notification, the Indian Broadcasting Foundation (IBF) said, “Like several industries that continue to reel from the after-effects of the global economic recession, India’s television broadcasting industry has been suffering too. The industry is largely dependent on advertising revenues for its economic sustenance. IBF has been working with TRAI over the last several months to arrive at a way forward on the quantum of advertising duration. Its fundamental stance has always been to self-regulate, aligned with globally practised standards.” In a statement, News Broadcasters Association has said that it “appears that this (new regulation by TRAI) is an attempt to muzzle the media by taking away its ability to operate independently.” For the moment however, broadcasters will also be arranging meetings with TRAI Chairman Rahul Khullar.
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