The puzzling case of TRAI's ad cap

MUMBAI: The Telecom Regulatory Authority of India (TRAI) found some unlikely supporters on the ad cap issue last week. On the one hand, Zee Entertainment, Star India and Viacom18 approached the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) saying that they were in favour of a limit to how much advertising should be allowed per hour and that they would like to become respondents to the cases filed by other broadcasters. Among these figure the News Broadcasters Association (NBA), regional and music channels all of whom have been opposing the regulation and have sought relief from the tribunal. The other supporter of the ad cap is an NGO called MediaWatch which said the ad cap should be extended to cable TV also and that TRAI should also ensure that broadcasters don't cross the line on audio levels of commercials and also specialised ad formats on the TV screen.

Though the intervention filed by Zee, Star India and Viacom18 was rejected in the hearing that took place on 31 October, the tribunal has asked the networks to file a separate application, which would be heard only after the main case filed by NBA, music and regional channels, the next court hearing for which is 11 November.

“Well! We had filed for an intervention which was postponed,” is what Star India president and general counsel - legal and regulatory affairs Deepak Jacob said when contacted him to enquire more about the case. However, he refused to divulge any more on the matter.

The three mainline Hindi GECs have been following the 10+2 ad cap regulation since 1 October, which was the deadline set by TRAI.

Industry watchers are asking what is it that made the three networks come out so blatantly in support of the ad cap when fourth network Sony Entertainment has not been following the TRAI diktat at all?

"They are in a position of strength as they have a tremendous share of viewer eyeballs," says a media observer. "Hence, they can afford to take a hard stance in favour of the ad cap. Their belief is that advertisers have no alternative but to advertise on their channels. Their following the ad cap allowed them to jack up air time rates which more than made up for the drop in inventory. They would ideally like the status quo of lower advertising time to continue as it has benefited them and will continue to benefit them because paucity will result in better yields and rates."

Another media observer believes that the approaches that the leading GECs have taken will add to the chaos and confusion. "The TV broadcast industry seems to have learnt very well how to stall any disruptive regulatory changes," says a media planner laughingly. "You have several opposing and pro-voices speaking up at the same time which tends to lead to policy paralysis."

She elaborates: "On the one side, the advertisers, agencies, news broadcasters, music channels and niche channels are against the TRAI ad cap. One of the major networks are also opposing it; while the other three are showing that they want it. It will be tough for anyone to decide which direction should things move. If the ad cap is on - in an election year - the news channels will take umbrage and the government cannot afford to have a negative fallout in an election year. If the ad cap is stalled for a while, that is good for everyone: the leading GECs have already got rate hikes of some sort; Sony can join in and hike rates and finally the news channels will not be faced with shriveling air time revenues. So they will be happy."

"We are also taking a leadership position by complying with the TRAI regulations," says an executive with one of the three networks. "We believe the time for change on TV advertising is now and hence are supporting it."

What move will the telecom industry's conscience - the TDSAT - and the regulator - TRAI- make next? Our guess is as good as any, but the ad cap game play is surely beginning to resemble a very complicated game of chess.

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