Ad revenues may dry up for channels

With advertisers sending out feelers that they want advertisement rates slashed, the Indian television industry is hurtling towards a fresh crisis, perhaps its biggest ever. The Indian ad industry is currently estimated at Rs17,500 crore, of which approximately 40% goes to television.

Earlier this week, all private national general entertainment channels (GEC) decided to black out fresh episodes of programmes from November 10, after producers wanted a hike to pay workers and technicians who demand shift-wise payment.

The channels, in turn, won't accept programmes at an increased cost.

"The producers intended to pass on the extra production cost to us. We asked them to submit pending tapes by November 9, but they have asked for a hike for buying the programmes. We have stopped accepting tapes from them unless they sell them at the agreed rates," said the business head of a national entertainment channel.

From November 10, there will be no fresh programming on air, which will set the TRPs of all programmes plummeting, in turn affecting ad revenues.

Advertisers are planning to meet television channel officials later this week. "We hope the crisis is addressed immediately by the channels. There is a meeting that will take place later this week between the advertisers' body and the channels. We have many questions and we need answers," said the head of a media planning agency.

Chandradeep Mitra, president, Optimum Media Solutions, a media planning company, said, "We are waiting and watching for developments. We believe good sense will prevail because everyone will be at the losing end if things don't work out. Individual meetings between advertisers and company heads have already started.”

Media planners say if the dispute is not resolved, advertisers will look to invest money in networks that give them better visibility and mileage. “The news channels may be an option to invest in, and they will not be hit as they air current-affair programming.”