If the standoff remains unresolved for long, this festive season may not offer much scope for celebration for broadcasters.
Channels may lose over Rs 550 cr, say expertsMUMBAI: If the standoff remains unresolved for long, this festive season may not offer much scope for celebration for broadcasters.
Industry watchers said, if the issue drags on, broadcasters will stand to lose over Rs 550 crore. They added niche channels will be hit the worst.
Industry estimates said, on an average, Rs 18 crore is spent daily on television advertising during this season.
According to advertisers, “The festive season is around the corner. People will shop if they have the money and the need - irrespective of the fact that ads appear on television or not.”
Marketers argue that due to contractual obligations, broadcasters cannot legally implement a surcharge.
Advertisers are now planning to drag broadcasters to court over what they claim is an illegal action by broadcasters and have asked Indian Society of Advertisers (ISA) to explore legal options, on their behalf. However, corporate giants with huge ad spends, like Hindustan Unilever, Proctor & Gamble and others are open to fighting their own case.
Sources in STAR, who didn’t want to be quoted, said: “During the festive season, we will lose ads for brands which are winter-specific as this is the time when they start advertising.
If this problem lingers then it is radio, OOH, activation and other below-the-line activities which would see spends diverted its way. Print at best will see only a marginal hike as most of the inventory is sold out for the festive season and also publications have minimal scope to increase inventories.”
Peter Mukerjea, chief strategy officer, INX Media, the group which is planning to launch a bouquet of 12 channels, said: “As an advertiser for our new TV channel, it is a difficult time for us as well. We will be launching some channels by the second or third week of November and were planning to advertise on other channels.” However, Mukerjea said broadcasters have a case.
He said: “Over the past few years advertisers have enjoyed the benefit of a lower cost per thousand and this is what the broadcasters are trying to rectify. Measurement today is done on the basis of TRP but a more effective way would be cost per thousand. For example, a newspaper would increase its rate if the readership goes up. Likewise it’s only logical as the number of cable and satellite homes go up, broadcasters should be paid a higher rate.”
IBF had earlier decided to impose a surcharge of 25% on the “agreed deal outlet”, effective on October 16, which had then been communicated to all major advertisers.
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