Phase II of ad cap comes into effect; channels follow TRAI mandate

NEW DELHI: Indian TV viewers are going to be a delighted bunch. Reason: the number of TV commercials being bombarded at them on TV channels just got reduced.

The Telecom Regulatory Authority of India (TRAI) ad cap regime imposed on news and general entertainment channels came into force today with an upper limit of 20 and 16 minutes per hour respectively. This will run till 30 September, following which the 12-minute rule will come into play from 1 October.

Both Indian Broadcasting Foundation (IBF) and the News Broadcasters Association (NBA) have said their members are following the regime, the first phase of which came into effect on 29 May when its members agreed not to exceed 30 minutes of advertising per hour. IBF president Man Jit Singh and NBA president K V L Narayan Rao told that the TV channels would stand by their commitment to the government since this was now the law.

The final decision of 29 May had taken a lot of wrangling, with the matter also going to the Telecom Disputes Settlement & Appellate Tribunal against TRAI which insisted that it was only implementing a regulation which was part of the Cable TV Networks Rules 1994.

Following this, the IBF Board finally appointed a committee of five persons - K V L Narayan Rao, Zee Entertainment CEO Puneet Goenka, Asianet managing director K Madhavan and Disney UTV media managing director K Anand with the assistance of secretary general Shailesh Shah - to research, debate, consult and arrive at what will work.

The committee admitted in its report that some channels especially those in regional languages ran more than 30 minutes of advertising per hour. Shah, however, claimed to that the per hour ad time works out to just over 11 minutes if a full-day average is taken.

The TRAI, however, says it is going to keep a sharp eye on each channel to ensure that there is no violation of the time cap set on the TV broadcast industry. “TRAI would continue to monitor the timing of commercials per hour by various channels,” says TRAI principal advisor on broadcasting and media N Parameswaran.

It is quite likely that the air time reduction, could result in revenue losses for the channels. Though none of the broadcast bodies have clearly highlighted how much this erosion could be, media buyers do acknowledge that broadcasters will no doubt hike ad rates with the implementation of 12 minute ad cap on 1 October.
“The impact cannot be felt as of now. Once the ad time comes down to 12 minutes (across GECs) in October that is when the crunch will be felt,” said an executive from a leading media buying and planning company. June to September is a lean period for advertising on channels, especially considering it is the monsoon season all over India.

There are also few who believe that the ad cap restriction will improve quality of viewing. Madison Group COO- buying Neel Kamal Sharma opines, “It is a win-win situation. On one hand the advertisers will benefit as now they can target their audiences in an effective way. The broadcasters will also increase their ad rates. Parallel to this even digitisation will bring in extra revenue for the broadcasters, decreasing their dependence on ad revenue.”

Sharma hopes for the transition to take place in a fair manner, which has been recognized by all without shifting the entire burden onto advertisers. “We must take a long term view of the situation and handle it carefully as some people may try to take advantage of the situation to increase rates disproportionately which may neither be good for them nor good for TV industry’s growth in the long run as many advertisers have already started exploring alternative options,” he adds.

The message for broadcasters is clear: take tiny steps - together with your advertising partners. Don‘t go for the long jump; you might end up jumping alone.

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