Peter Mukerjea: Thank you, TRAI (Now, please enforce it!)

16 May,2012

By Peter Mukerjea

 

News today that TRAI have finally put a cap on advertising time per hour for TV channels is a most welcome move in my opinion. I’m sure all broadcasters, other than the savvy ones, will see this as a backward and a retrograde step because it means that they will start to feel the pressure initially, but I can assure them that this is not so, and the effect will be exactly the opposite on their adverting sales revenue line of their P&L sheets.

 

First, it’s a simple case of supply and demand economics. Shrink supply and prices should go up. We see that with every product category, be it food, petrol, deisel, cooking gas, etc etc and TV airtime is no different. This will clearly help broadcasters shore up their revenue lines once they’ve managed to get media buyers and clients to understand this logic. That’s not going to be easy, but whoever said that selling TV airtime was a piece of cake.

 

Ad sales executives in the numerous stations will now, finally, have to earn their keep, rather than simply earning good money and even better bonuses, simply by pushing in more ads into the breaks of movies, sports coverage and news channels. Programmers will need to work harder to get better deals from content suppliers and movie producers alike, instead of paying grossly inflated prices for movie titles and then having to recover the cost by stuffing the movies with ads, such that the viewer experience is diluted to the point of nonchalance. Of course, broadcasters will be up in arms with this directive from the TRAI and will kick and scream and throw their toys out of the crib like all babies do when they don’t get what they want. It’s not the job of the TRAI to keep broadcasters happy at all times. Occasionally it should be looked at from the consumer point of view, which is clearly the case here. So, thank you TRAI.

 

Second, consumer groups that have had to put up with the barrage of advertising breaks in their TV viewing experience, for years on end, should be feeling relieved that finally the regulator has paid some heed to their woes of getting blasted with increased decibel levels in ad breaks, getting masses of drop downs  during live sports coverage and getting news channel tickers carrying branding of all kinds within it, masquerading as news headlines. Enough is enough and this was all done under the banner of self regulation!  In fact, the shoe should be on the other foot now and TRAI should consider setting up a consumer group forum who should be tasked with monitoring the violations to the new standards, as laid out by the TRAI and report these to the TRAI for further action and enforcement. So, thank you TRAI for improving the viewing experience of millions of long suffering TV viewers across the country.

 

Sure, there will be several broadcasters who will now be unable to keep carrying more and more ads to secure their bottom line, who will suffer and will be pained by this statute and may well go to the wall and eventually go out of business, but sadly that is the reality of life. Those channels owned by big groups will not suffer at all as they will be able to withstand the initial blips and will come through this just fine. They will then also be at the forefront of the list of beneficiaries in a few months from now, but the smaller ones who do not have the deep pockets to sustain this correction must recognise that this party was not going to last forever.

 

They should have read the rule book before they started. If they didn’t then it’s entirely their fault , for the ad time cap has been around for a long time and would have known full well that this free for all amount of air time inventory status quo was going to come to an end one day. That day has come. Far too many broadcasters have started up recently on the basis of a never ending supply of airtime being the way to earning revenues. They then produce below average content which then gets below average ratings and that advertisers pay virtually nothing for. This brings the whole industry down by several notches and attracts below average talent who do the same thing day after day thus creating a downward spiral. Thank you TRAI for improving standards in the industry.

 

There is, in case you hadn’t spotted it yet, however a bright future for the industry. The fact is that with an improving revenue line for broadcasters, there will be a growth in corporate valuations over time which will enable them to deliver better shareholder value and see more investments coming towards the category. For sometime now broadcast media companies have been struggling to get their valuations up and have seen so much of their values eroded. This directive from the TRAI will go a long way in correcting that and so for that I thank TRAI once again. So instead of being a bunch of sour pussies, broadcasters should stop whining and get on with the task of putting their businesses back on track and tasking the ad sales teams to get cracking and reforecast their revenues budgets upwards for the rest of this year (or else they should get no bonuses this year , on the basis that they have less air time time to sell).

 

Excellent times ahead – thanks to TRAI.

 

Post a Comment 

9 responses to “Peter Mukerjea: Thank you, TRAI (Now, please enforce it!)”

  1. Pradeep Prabhu says:

    Absolutely loved the move by TRAI. Though, not actively part of the broadcast industry anymore, I think this is going to work positively for the broadcasters.

    However, I think it is quite surprising that broadcasters need to be told by a regulator not to annoy its own consumers. Didnt we all study “Consumer is King”? Weird but a reality with broadcast industry.

  2. Tanuka Roy says:

    Nice one Peter! I do remember you being obsessive about this. it is quite pathetic when broadcasters forget about the viewer experience – kind of important for a TV channel!

  3. Rehan says:

    Now the real joy will come to watch the movies and no need to store and watch in ‘+’ sign setup box…

  4. Manisha Kukreja says:

    Great Read 🙂

  5. Sai Nagesh says:

    I couldnt agree more Pete. Great move by TRAI. With the ridiculous levels of ad clutter, consumer ad-avoidance in India is now at one of the highest levels within the continent. Not to forget the fact that GRPs seem to have increasingly less relevance with a brands’ Market performance !! With the consumers moving away from watching ads, the very purpose of taking the medium itself will surely start getting questioned in the near future. In the recent past & even before, I have had many happy clients,who intially baulked at the thought of paying a premium to ensure ‘watchingess’ of an ad, and then ended up not just with some very satisfied results but also insisted on continuing to explore new horizons to beat clutter. If the broadcasters are wanting to charge a premium in lieu of cutting down the commercial time, so be it. It, of course , means that the Media planner ,who obviously understands the co-relation between effectiveness and clutter ,just has to be a better salesman to help ensure that the broadcasters get a better extraction rate and that it only benefits the advertiser.Yes, thank you TRAI. Cheers !!

  6. Anonymous says:

    Should i take Mr. Mukerjea’s advice on running my media business? Would i take medicine for my cold from a doctor who specializes in euthanasia? Yeah Sure!!! 🙂

    • pm says:

      Sure you should ! Would’nt you rather take advice from someone who has driven and won in several F1 races and has even had to stop early sometimes and perhaps even crashed a few times – than bury your head in the sand and believe that it should only be ‘your way or the highway’. In any case it’s a pov. It’s a free world and you don’t have to agree.

  7. Baba472002 says:

    Had he still been in Star he would have sung a different tune. Now he has the luxury of being an “arm chair consumer evangelist”. Something cathartic must have happened to him during his years in wilderness.

    • pm says:

      On the contrary Baba472002, at Star i was always an advocate and was obsessive about keeping air time inventory to the prescribed levels as directed by TELA i.e. 10 mins per clock hour + 2 mins promo time. Being an armchair evangelist now has only sharpened my conviction and thankfully TRAI have taken up the mantle too.

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