News channels ask Trai to sort out carriage before capping ad time

MUMBAI: The Telecom Regulatory Authority of India’s ad review policy will have a devastating impact on the television news industry which is already going through a rough patch due to muted revenue growth and rise in overall costs, the News Broadcasters Association has said.

The NBA is of the opinion that there should no restriction on the duration of ads that a channel can air in between a show, contending that ad revenue continues to be a key revenue source for news broadcasters and any curtailment in that revenue stream will have adverse impact on their business models.

The body also said that it was in favour of “self-regulation” on ad time rather than being regulated externally.

The association has warned that Trai’s regulation will result in closure of small news channels and loss of jobs on a mass scale and has requested it to reconsider the issue in the larger interests of the news broadcast industry.

While lauding Trai’s efforts for facilitating the process of rolling out digitisation of cable networks in the country, the NBA said that the authority should first try to address more serious issues like carriage fees and cap on channels pricing, which have been the bane of the news television industry.

The NBA also criticised Trai for over reaching its authority by attempting to regulate TV ads by asserting that the issue is beyond its scope and authority. It also wondered how Trai could forget its own submission to the Tdsat that it had no role in advertising minutage rules.

The news broadcasters’ body also opinionated that there is inherent “self-correcting” mechanism which is efficient enough to keep a check on transgression’s by news broadcasters. Furthermore, it stated that in News Broadcasting Standards Authority it had a robust mechanism to deal with the issue, should the self correcting mechanism fail to address grievances.

A classic example of the “self-correcting” mechanism is the recent move by Zee News Ltd. to slash its ad air time by 30 per cent while increasing the ad rates by 40 per cent as part of its ‘Maximum News, Minimum Break‘ positioning.

The NBA also highlighted the fact that the Trai’s ad review does not specify the bifurcation between time for commercial advertisements and self promotion.

“Television viewing is a function of rating, which is a function of consumer viewing experience. If the advertisements are more than what is preferred by consumers, the ratings will drop and the channel will have to reduce its advertising. This “self-correcting” mechanism ensures that Trai or anyone’s intervention in regulating advertisements is unnecessary,” NBA secretary general Annie Joseph said in response to Trai’s consultation paper on the subject.

It added, “The NBA has a robust mechanism – News Broadcasting Standards Authority – and we have not received any specific complaints so far against one or more channels, for excessive advertising.”

The NBA also questioned the regulatory body if the government was willing to offer subsidies to news broadcasters should the consumers be unwilling to pay more for ad-free viewing. “If consumers are not willing to pay more, will the government, in public interest, offer subsidies/tax benefits in lieu thereof to make the business model economically viable for news channels,” Joseph questioned.

The news body also pointed out that no less than Supreme Court had ruled in favour of newspapers when the government had tried to curtail advertisement space.

“The mere fact that the newspapers would be “exposed” to “financial loss” was held by the Supreme Court to be an infringement of right to freedom of speech and expression under Article 19 (1) (a),” NBA further added.

“The importance of advertising revenue for the electronic media (especially news channels) is exactly the same, if not even more grave, as that for print. The restriction sought to be placed upon the “advertising airtime” is exactly in pari materia with the restrictions on “advertisement space” considered by the Supreme Court in the foregoing cases.”

The notion that ads are a nuisance is incorrect, the NBA said adding that advertisements play a significant role in informing and educating the public about products and services which can enhance their lives. Any reduction in ad inventory will also result in scarcity of FCT which in turn would result in rise in ad cost and would make it out of reach for small and medium enterprises.

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