Indian Broadcasting Foundation has decided to waive 25% surcharge on TV ads for a month, if the latter accept the surcharge on October 15.
NEW DELHI: The Indian Broadcasting Foundation (IBF) has decided to waive the 25% surcharge on TV advertisers for a month, if the latter accept the surcharge before the end of play on Monday (October 15).
IBF, the apex body for TV channels in the country, imposed the surcharge early this month citing rise in input costs.
Advertisers had greeted the move with a boycott threat and some even cancelling ads.
As to how many advertisers have accepted the IBF’s surcharge-waiver offer, Star India president (ad sales and distribution) Paritosh Joshi said: “Things would be quite clear by Monday evening.”
He said many advertisers have already come on board, but refused to name them. According to Joshi, some “seasonal” advertisers are likely to find the waiver useful.
Meanwhile, IBF has decided to issue a separate advisory to South-based TV channels on implementing the increased advertising rates.
Sources told DNA Money that the IBF is likely to give a month’s time to channels in the South to enforce the new ad rates, “since southern states do indirect selling of ads, unlike in other parts of the country”.
According to an IBF statement on Sunday, “Member broadcasters are keen to express their appreciation” of the positive response from advertisers.
“The IBF has recommended that all advertisers who accept the surcharge no later than 1800 hours on Monday, October 15, 2007, should receive a surcharge waiver for the first month—October 16 to November 15, 2007. “This will ensure that these advertisers will continue to enjoy a surcharge-free status right through Ramzan, Dussera and Diwali festival seasons,” it said.
IBF had cited the hike in input costs to levy the surcharge on all ad rates, starting October 16.
At the time of the announcement, Jawahar Goel, president, IBF, had said, “This correction was long overdue and will enable our member-broadcasters to continue delivering compelling, high-quality content to millions of viewers even as advertisers continue to enjoy one of the world’s lowest costs per television contact.”
While cable and satellite homes have gone up from 42 million to around 70 million in the past three years, competition in the channel space has resulted in ad rates going down by 20-30% in the corresponding period.
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