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In
what should be a major fillip to the way this business is
organised, the joint working committee of the Indian Broadcasting
Foundation (IBF) and Advertising Agencies Association of
India (AAAI) has reached an agreement wherein all AAAI member
agencies will henceforth have to clear outstanding dues
to television channels within 75 days.
The
agreement comes just over a year (24 February 2001) after
the two principal bodies representing TV broadcasters and
advertising agencies inked an agreement setting out the
basis of the professional and commercial relationship between
their respective member groups.
This
basically laid out the ground rules for the agreement that
was to become effective 1 April 2001, but appears to have
been adhered to more in the breach than anything else. As
per that agreement, AAAI members were to guarantee payments
to channels within a certain credit period. Another aspect
to the deal was that advertisers who moved business through
AAAI members were to get preferential treatment in terms
of rate and credit.
Queried
as to how compliance could be assured, a senior channel
executive said there was broad consensus among broadcasters
for the need to make it work. The IBF will be holding regular
review meetings to ascertain how far the deal was working
and if agencies were lax in their payments they face being
blacklisted, he said. One common defence of agencies in
these matters has been that the delays are because advertisers
have not paid up. "We will no more allow agencies to hide
behind the argument that the client has not paid and therefore
the delays," he said.
The Hindu Business Line, quoting sources in the broadcasting
industry, says revenues to the tune of over Rs 3000-5000
million are owed by various advertising agencies to television
channels.
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