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Advertising rates have begun to increase following the move by the Telecom Regulatory Authority of India to cap ad time to 12 minutes per hour
Advertising rates on television channels have begun to inch up after remaining stagnant for the first half of this calendar year. The reason is the cap of 12 minutes imposed recently by the Telecom Regulatory Authority of India (TRAI) on advertising on TV channels.
This has prompted broadcasters to increase ad rates by about 8 to 10%, which by the time the ruling sets in two months down the line (that is, by October) will peak to about 25 to 30%, media buyers in the know said.
The chief executive of a general entertainment channel admitted that ad rates were beginning to climb. "With inventory levels set to come down, this is bound to happen," he said on condition of anonymity given the sensitivity of the matter.
News channels have already appealed against TRAI's ruling last week with the Telecom Disputes Settlement & Appelate Trubunal (TDSAT) agreeing to hear them on the matter.
TRAI has been given two weeks to respond to the appeal filed by the News Broadcasters Association of India (NBAI).
The broadcast regulator's move, according to persons in the know, was prompted by the ad clutter on television channels, which it believed was in brazen violation of the Cable Television Network Rules of 1994. Typically, news and movie channels have ad breaks of almost 20 to 22 minutes per hour, while Hindi general entertainment channels have close to 16 minutes of ad time per hour.
By capping advertising to 12 minutes per hour, the endeavour by the regulator was to make the TV viewing experience more pleasurable for consumers, in other words, improve "quality of service". But the initiative has predictably met with opposition from broadcasters, who argue that capping ad time will put pressure on revenues garnered from a crucial source.
The broadcast industry in India continues to depend heavily on advertising rather than subscription, which is the trend abroad, given the rampant under-declaration of analog subscribers by cable operators.
Though digitisation initiated last year in metros was expected to address this issue in some way, broadcasters argue that TRAI's move was ill-timed given that the former has not been completed yet.
Digitisation basically entails routing satellite channels through a digital set-top-box. Mumbai, Delhi, Kolkata and Chennai were part of the first phase of the digitisation process called the Digital Addressable System (DAS) that concluded last year.
While Mumbai, Delhi and Kolkata have seen almost cent% digitisation, Chennai remains a tough market to crack with households yet to shift to digital cable from analog. Cities such as Bangalore, Pune, Hyderabad, Ahmedabad, Chandigarh, Thane, Surat, Bhopal and Patna were part of second phase of digitisation, which concluded this March.
Of the 210 million TV-owning homes in India, almost 155 million are cable & satellite households. Of this, almost 30% are digital households, with the rest being analog.
TRAI ad cap pushes up TV channel ad rates | Business Standard
.
Advertising rates on television channels have begun to inch up after remaining stagnant for the first half of this calendar year. The reason is the cap of 12 minutes imposed recently by the Telecom Regulatory Authority of India (TRAI) on advertising on TV channels.
This has prompted broadcasters to increase ad rates by about 8 to 10%, which by the time the ruling sets in two months down the line (that is, by October) will peak to about 25 to 30%, media buyers in the know said.
The chief executive of a general entertainment channel admitted that ad rates were beginning to climb. "With inventory levels set to come down, this is bound to happen," he said on condition of anonymity given the sensitivity of the matter.
News channels have already appealed against TRAI's ruling last week with the Telecom Disputes Settlement & Appelate Trubunal (TDSAT) agreeing to hear them on the matter.
TRAI has been given two weeks to respond to the appeal filed by the News Broadcasters Association of India (NBAI).
The broadcast regulator's move, according to persons in the know, was prompted by the ad clutter on television channels, which it believed was in brazen violation of the Cable Television Network Rules of 1994. Typically, news and movie channels have ad breaks of almost 20 to 22 minutes per hour, while Hindi general entertainment channels have close to 16 minutes of ad time per hour.
By capping advertising to 12 minutes per hour, the endeavour by the regulator was to make the TV viewing experience more pleasurable for consumers, in other words, improve "quality of service". But the initiative has predictably met with opposition from broadcasters, who argue that capping ad time will put pressure on revenues garnered from a crucial source.
The broadcast industry in India continues to depend heavily on advertising rather than subscription, which is the trend abroad, given the rampant under-declaration of analog subscribers by cable operators.
Though digitisation initiated last year in metros was expected to address this issue in some way, broadcasters argue that TRAI's move was ill-timed given that the former has not been completed yet.
Digitisation basically entails routing satellite channels through a digital set-top-box. Mumbai, Delhi, Kolkata and Chennai were part of the first phase of the digitisation process called the Digital Addressable System (DAS) that concluded last year.
While Mumbai, Delhi and Kolkata have seen almost cent% digitisation, Chennai remains a tough market to crack with households yet to shift to digital cable from analog. Cities such as Bangalore, Pune, Hyderabad, Ahmedabad, Chandigarh, Thane, Surat, Bhopal and Patna were part of second phase of digitisation, which concluded this March.
Of the 210 million TV-owning homes in India, almost 155 million are cable & satellite households. Of this, almost 30% are digital households, with the rest being analog.
TRAI ad cap pushes up TV channel ad rates | Business Standard
.
