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TRAI recommends guidelines for TV ratings agencies

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MUMBAI: The Telecom Regulatory Authority of India (TRAI) is once again showing it means business. It has come out with its final recommendations on what should serve as guidelines to put in place a transparent, credible and reliable television ratings process in India. These recommendations have been made after the consultation paper which was first issued by the authority on 17 April 2013. The consultation paper had then called for comments from various stakeholders after which an open house was held on 1 July.

The problems surrounding the television rating system was raised by the Information & Broadcasting Ministry (MIB) in January 2008. It was then that the authority recommended the adoption of self regulation through the industry led body The Broadcast Audience Research Council (BARC).

Based on these discussions with the various stakeholders, the TRAI has come up with its own analysis and recommendations which were made public today.

Amongst the recommendation is that the MIB has to notify the guidelines for regulating television rating agencies based on TRAI‘s recommendation within two months. Any agency wanting to offer TV viewership monitoring or rating services has to perforce get itself registered with the MIB if it fulfills the following guidelines: The rating agency shall be set up and registered as a company under the Companies Act, 1956; any member of the board of directors of the television rating agency should not be in the business of broadcasting/ advertising/advertising agency; the rating agency should have a minimum net worth of Rs 20 crore; the rating agency should also meet the prescribed cross-holdings requirements.

TRAI has said that to keep the ratings process credible, there should be a minimum of 20,000 panel homes which have to be set up within six months of the guidelines being implemented. Thereafter the number of panel homes has to be increased by 10,000 every year until it reaches 50,000.

It has recommended that it be mandatory for the industry to observe a voluntary code of conduct for maintaining secrecy and privacy of panel homes and that data and reports should be made available to all stakeholders in an equitable manner on a paid basis.

Also no single company/ legal entity, either directly or through its associates or inter-connected undertakings, should have substantial equity of 10 per cent or more holding in both rating agencies and broadcasters/advertisers/ advertising agencies.

TRAI says that ratings agencies will be penalised if they fail to follow the guidelines on cross-holding, methodology, secrecy, privacy, audit, public disclosure and reporting requirements. A penalty of Rs one crore will be levied in the first instance; the second instance will lead to the cancellation of registration.

For other guidelines, the penal provisions shall be a graduated financial penalty of Rs 10 lakh to Rs one crore for the first three instances of non-compliance and, for the fourth instance, cancellation of registration.

However, TRAI says an opportunity should be given to each party before invoking any penal provisions. Once guidelines for rating agencies are issued by MIB, these will have to be equally complied by all rating agencies including new entrants.

In keeping with the fact that the existing rating agency (TAM Media) may require some time for complying with the guidelines, the authority has given it six months to allow it to meet the cross-holding and panel size requirements guidelines.

It says that it would like industry to implement these recommendations and to show that it means business it says it will suo motu intervene in the larger public interest if the former does not comply.

Obviously, TRAI is trying its hardest to change the paradigm of TV ratings. Will Indian industry pay heed?

Click here for the complete final recommendation

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