AAAI, IBF reach agreement - no outstandings beyond 75 days

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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