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Industry reacts to move to net billing

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MUMBAI: After nearly three weeks of speculation, debate and discussions, the advertising agencies, represented by the Advertisng Agencies‘ Association of India (AAAI), and the broadcasters, represented by the Indian Broadcasting Foundation (IBF), the bodies have come to a consensus about shifting to net billing.

The decision came as a relief to both agencies and broadcasters as the latter had stopped airing ads on their respective networks. Clients were yelling blue murder at the agencies for not being able to promote their products to TV viewers. Indiantelevision.com spoke to some of the network officials to get their views on what they thought about the settlement between the two:

Says MCCS CEO Ashok Venkatramani, "I welcome it completely. It‘s the right thing and I am very glad that the issue is resolved and I think we have done the right thing moving to net billing. It should have happened earlier, but it‘s better late than never."

AXN Networks India business head Sunil Punjabi feels that the new net billing system is not going to affect broadcasters. "It doesn‘t make a difference from a channel‘s perspective. It is just that things will be more transparent. From a tax perspective things will be clearer." He however adds that from an agency's perspective there could be an impact pertaining to commission. "Earlier on a bill of Rs 100 we were paid Rs 85. The rest was the agency‘s commission. Now we will charge Rs 85 and get paid that."

Venkatramani adds that the industry was "just hanging to the system which is completely outdated and nobody was gaining. It was just a paper number, paper figure or you can say paper transaction and it doesn‘t make much difference to their (agencies‘) life. They just need to sit with their clients and renegotiate their actual fees."

Taking a slightly milder tone, Colors CEO Raj Nayak said, "I am glad that both the IBF & the AAAI have been able to come to a mutually agreeable solution on the net v/s gross billing issue. This is an industry issue and we have to address it together keeping the interests of all stakeholders in mind."

NDTV group CEO Narayan Rao is in complete agreement and adds, "We were part of that decision and we fully supported it. I am glad that the IBF leadership and also some of the CEOs of our broadcasting channels have been able to achieve this conclusion."

Helios Media CEO Divya Radhakrishnan feels that the standoff between the two stakeholders of the industry served little more than proving a point one way or another. She said, "Broadcasters and agencies are working in the same space of providing communication solutions for brands. Hence there can be no reason for working at cross purposes. An amicable solution works for all concerned. Such stand offs serve no purpose other than wanting to prove a point. Lastly, if a stance has to be taken then it cannot be selective."

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