Four leading ent TV channels hike ad rates

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Four leading entertainment TV channels hike ad rates by 20-30 per cent

MUMBAI: With the Telecom Regulatory Authority of India (TRAI) holding firm on its recent cap that limits the amount of advertising TV channels can carry to 12 minutes per hour, the four leading general entertainment channels (GECs) have decided to increase their advertising rates by 20-30%.

Raj Nayak, CEO of Colors, which will raise its rates by almost 30%, said, "As a broadcaster, we have still not seen the full impact of digitisation in the form of either a fair share of reduction in carriage fees or subscription revenues. Given that we are a responsible broadcaster and intend to follow the guidelines set by the regulator, we believe that to stay on course and meet revenue objectives, we are left with no option but to increase the ad rates."

Nayak adds that in the current scenario there is already a shortage of ad inventory on GEC channels, and he sees changes in the supply-demand dynamic ahead. One problem that broadcasters might face, points out Manjit Singh, CEO of Sony, is that most channels have signed long-term contracts with advertisers. "While we are evaluating how much we will increase, those whose contracts are made on low budgets will not get renewed," he said.

Sanjay Gupta, COO of Star India, also said that the existing deals will be honoured, but added that channels will have to adopt dramatically different ways of doing business from now on. "Speaking for Star, our inventory will come down by 20%. In such an environment, business cannot function if you do not charge more, so I see an increase of at least 20% from October. Restricted time means less ads which makes it a challenge for advertisers as well. We too will have to review which ads to air in that limited slot. But definitely, the bottom 20% paying clients will go off," said Gupta.

Punit Goenka, MD and CEO of Zee EntertainmentBSE -2.70 %, said that increasing rates to reflect the increased reach of its brands was an on-going endeavour. The TRAI directive would enhance the viewing experience, he believes, and "The advertisers only stand to benefit multi-fold. So, with our advertisers getting a much better media proposition, the value for the same will also be at a premium. As such, our efforts to increase rates will only get further intensified," he said. Without sharing specifics, he said that rates would increase across genres in a phased manner that would include a process of renegotiation of all contracts.

The battle for ratings between the GECs is keenly fought every week. For the last few weeks, Star Plus has held a 20% lead in gross rating points (GRPs), while Colors and Zee have fought for second and third place, with Sony fourth.

With almost one-third of India's television ad spends going to GECs, a downtick means that the channels will have less ability to invest in high-cost programming like reality TV, says Ashish Pherwani, partner, E&Y India. They will have to try to push for greater subscription revenues, he adds.


Four leading entertainment TV channels hike ad rates by 20-30 per cent - The Economic Times
 
so only beggies like hul honda maruti, itc, tata motors, mahindra will able to place ads with these rate

and smaller player like muthootht, PC jwellers, aircel, okaya find tight budget
 
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