Broadcasters slam TRAI notification to limit ads

16 May,2012

By A Correspondent

 

Broadcasters and advertisers have slammed Telecom Regulatory Authority of India (Trai) move to limit the duration of television advertisements to 12 minutes in an hour, and accused the regulator of exceeding its brief.

 

A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over. According to industry estimates, this could impact advertising revenues of broadcasters by 15-40 per cent.

 

“Trai has no jurisdiction in the subject. Advertising is governed by the Cable and Satellite Act and the appropriate authority is the ministry of information and broadcasting,” said Uday Shankar, president of the Indian Broadcasting Foundation, and the chief executive officer of Star India. “The regulator is overstepping its brief,” he added.

 

According to Mr Shankar, the low revenues from subscriptions give broadcasters no option but to rely on advertising inventory and revenues to survive.

 

An Indian Broadcasting Foundation official said an earlier government guideline stipulated that Trai could issue an advisory with regard to advertising but not a notification.

 

Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels, too criticised Trai’s decision. “This move is completely ridiculous. Self regulation is the best regulation,” he said.

 

“This move will have an immediate impact because right now there is no other big source of revenue for broadcasters,” said Rohit Gupta, president of Multi Screen Media, the company which runs Sony Entertainment Television. The IBF will appeal against this new regulation, he added.

 

Barun Das, chief executive officer of Zee News, questioned the timing of the regulation at a time when the entire broadcasting industry was going digital. “We have a limit mentioned in the Cable Act. If at all there is a need for regulating duration of advertising, it possibly could have waited some more time for the digitisation process to settle down.” he said.

 

Mr Das said his channel had voluntarily cut its advertising inventory by 30per cent earlier this year. “We realise that too much advertising is a deterrent to viewership. We were not driven by regulations, rather we were driven by market forces,” he said.

 

Mr Das said the viewers had choices not only of channels but also of media platforms. “I am not sure if advertising volume needs to be regulated. I would tend to believe that too much advertising would anyway drive away viewers,” he added.

 

Sale of television rights have become an important source of income for sports bodies such as BCCI but the restriction on advertising will adversely impact the ability of broadcasters to recoup their investments, forcing them to scale down their bids.

 

Source: The Economic Times
Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

 

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