NTO ambiguity resulting in ad rev drop for small broadcasters, niche channels

Advertisers to benefit with further consolidation of the viewership pie

MUMBAI: Just when it felt like the dust on the NTO had settled, Telecom Regulatory Authority of India (TRAI) came out with yet another consultation paper reviewing the order, seeking more fundamental changes in channel pricing and bouquet formation. As clarified by TRAI chairman RS Sharma, while the regulatory body does not plan to revise the pricing framework, it is surely looking at fine-tuning the existing parameters as consumers are facing certain issues because of the current set of rules.

This has once again left a big question mark on the fate of broadcasters and might have a bigger impact on advertising revenues as well.

Y&A Collective co-founder S Yesudas told that this uncertainty over the tariff order and channel pricing will impact nice channels the most, resulting into a dip in their revenue.

He said, “The biggest sufferers will be niche channels, particularly those which are mid and bottom-rung. Even as the power to choose rests with consumers and the general mindset of sensitivity for the paid-for options resulting in those always taking precedence, the snacking-in viewership will reduce.  Between the two time periods, pre-new tariff order to July 19, there’s apparently already a drop of approximately 7 per cent of the total TV impressions. This will consequently mean revenue reduction.”

HyperCollective founder and CCO KV Sridhar (Pops) also agreed that the past few months have seen a dip in the revenues for broadcasters, barring a few big ones, because of many reasons like the economic slowdown and growth of digital bouquets, along with the NTO.

“The NTO is putting a lot of pressure on the broadcasters and some easing out is required, maybe not so suddenly but definitely. The bigger groups like Star and Sony can survive in the turmoil, but it is difficult for smaller groups, especially independent channels and some regional channels,” he said.

TheSmallBigIdea CEO & co-founder Harikrishnan Pillai shared that this ambiguity over the tariff might result in advertisers taking their money to digital platforms than spending on television.

He said, “One needs to reckon that any industry with fluttering policy fuels questions on its stability. While TV broadcasting is the most robust of all mediums, the effect of such policy-based tremors cannot be ignored. Especially by smaller TV channels, which already are fighting for eyeballs. It is likely that they might be ignored by the advertiser for other lucrative digital options. Investment into fresh content might take a back seat, which might further make it difficult for certain channels to attract advertisers on the back of new shows."

Sridhar also noted that the loyalty of the consumer is with the content and not the channel. If they can access the same content on OTT platforms or other media, they will not want to spend on purchasing the channels.

He further elaborated, “Advertisers are interested in viewership only. Also, they would play their ads during the content that is relevant to them. They are not going to place an ad on your channel even if you offer cheaper slots, or guarantee greater reach. Every advertiser is looking for relevant content now. If the content is not good, your channel will drop. OTT, therefore, is a big hindrance for the broadcasters in getting revenue.”

While the tariff order seems to be generating problems for the broadcasters, Yesudas feels that it will be beneficial for the marketers and advertisers. He said, “Marketing and adverting industry will only stand to gain from this as there will be further consolidation of the viewership pie.  While the top-rung channels will find a place in almost all media plans (with reduced  cost per contact) the mid-and bottom-rung channels which no longer can only stay focused on transactional and passive advertising time selling will also embrace true innovation in helping clients solve certain marketing challenges within a segment of consumers, they can influence.”

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