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Ad agencies expect reallocation of budgets post TRAI tariff order implementation

While most are certain that OTT will gain with it, others are adopting a wait & watch approach

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MUMBAI: Since the Telecom Regulatory Authority of India (TRAI) has announced its new tariff order, making it mandatory for TV channels to keep a transparent display of the rates of its channels and bouquets and providing the viewers the liberty to pay only for those channels that they want to see, there has been quite a turmoil in the worlds of those associated with the industry.

While channels, MSOs, and LCOs are busy ensuring a smooth transition to the new regime, the advertising world is looking at a cloudy sky that only offers a lot of uncertainty towards the impact of this order on their planning.

Speaking about the same at a recent press meet, Mindshare chief operating officer, South Asia Amin Lakhani had said, “As an industry, we have seen a lot of volatility and uncertainty in the past 4-5 years. This is also an interesting one.” He added that the industry will have to follow a wait and watch approach to see the impact of the new order on the advertising world. But he was also certain that people will not change their habit of watching TV.

Indiantelevision.com talked to some more industry insiders to understand what the new order will mean for TV, digital and the advertising world.

Mindshare chief digital officer South Asia Vinod Thadani reflected same thoughts as Amin and said, “Any call on the way the TRAI order will impact TV viewership would be too early. The various scenarios are yet to play out and once there is clarity on the impact on TV distribution and viewership, we will be able to take any calls on its impact on digital.”

Isobar group MD-South Asia Shamsuddin Jasani on the other hand was sure that this new order is going to help the advertisers as they will now have a better idea of which channels are popular and thus, where to invest.

He said, “I don’t think it will impact the ad-spends on TV drastically but will lead to re-allocation of fund by the advertisers. Now, we have an even better data of premium channels and we can thus improve the way we spend.”

Shamsuddin is of the view that OTT might gain because of the order, “With OTT, you can track the number of users from day one. So, if advertisers use the right science (to understand these numbers), it will definitely help OTT players.”

Update Advertising MD Sharad Alwe affirmed that the new TRAI tariff order is definitely going to impact the viewership of pay channels. He said, “The TRAI ruling will perforce make the viewer carefully select his pay channels of choice (appointment viewing) and create or select his package so that his cable subscription does not go higher than what he was paying currently. On certain channels, where he watches programming based on specific events, be it sports or reality shows, he may buy these channels only during that specific period. FTA channels & MSO/LCO based cable channels with better and relatable content will attract higher viewership.”

But he doesn’t see this affecting the ad spends made by the brands on any of these TV channels. “These changes will impact channel rates but we do not see any negative impact on ad spends,” he says adding, “OTT offerings of the various media networks like Hotstar, SonyLiv, ZEE5, Voot might see an uptake for their selective content.”

Mobclixs Technologies founder and CEO Dushyant Jani was very positive about the new regime making the entire broadcast framework transparent and fair. He said, “I think 50 per cent of the viewers watch not more than 30 channels but they are sold a bundled pack of 300 channels, which cost roughly between Rs 250 and Rs 450 depending on whether it is a cable connection or DTH service. When consumers select their channels, the ones that don’t meet their expectations get dropped out in the process.”

Talking about its impact on advertising, Dushyant contended, “The drop in channels will impact the advertising revenue. For advertisers, it is wise to bet on the popular channels and obviously, the lesser popular channels will lose big on advertising revenue. However, the impact on the advertisers due to this will still be much higher as they need to cater to and capitalise on the top-selling channels but may not have enough time to plan their advertising budget.”

Bijoor Consults Inc founder and brand guru Harish Bijoor feels that the new tariff regime is definitely a ‘jolt’ point for TV as well as the advertising industry. According to him while there are differentiated views on what impact this whole scenario will have on TV ad spends, one thing is certain that OTT is surely going to benefit in the long run.

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