No (or low) ads on HD. Anybody complaining?

24 May,2012

 

By Meghna Sharma

 

While there is no denying the importance of advertisements in a world where subscribers are unwilling to pay subscription fee for channels, there exist many viewers who are tired of innumerable ads interrupting their favourite soaps or sporting. The good news for them is that their ordeal has been put to an end through HD channels. At least for the moment

 

With various broadcasters launching HD variations of their channels, many upper-end subscribers are shifting to HD set-up boxes or subscribing to an HD channel. However, as there are no free lunches in the world, these channels come at a premium.

 

What media planners think?

Most media planners feel that since HD channels come with a certain cost attached to them, it is but obvious that they cater to a limited audience.  So, most channels are aware of it and their target group.

 

Anita Nayyar

Talking about the HD channels’ reach, Anita Nayyar, director (customer strategy), BCCL, agrees that not many avail of the facility. However, with digitization being made compulsory, especially in the four metros things might change. “Unlike the West, inIndia a broadcasters make most of their money through advertisements, and not distribution. So, if HD channels reach only a certain section, then how will a channel make its revenue?”

 

Ms Nayyar added: “Today, one might pay a premium cost to watch an ad-free telecast, but in the near future, if availability doesn’t increase then channels won’t have an option but to make exception to the rule. They will be forced to show advertisements; however, they might charge a higher cost or have a limited time slot.

 

On the other hand, Hiren Pandit, managing partner of Group M, felt that broadcasters with HD channels aren’t feeling the pinch, since they want to cater to a different audience: “Apart from the top-notch TG, most broadcasters have non-HD channels as well, so they capitalize through them. And over a certain period of time, they’ll be able to cut losses.”

 

Agreeing with Ms Nayyar and Mr Pandit, Janardhan Pandey added: “It’s not just about reach or money, there is another reason which plays an important part in making HD channels a hit and that’s viewers’ psyche.  A person who might be able to afford HD package might still go for cheaper option because he/she might feel why pay more when the same can be watched at a lesser cost. For them, a few advertisements don’t matter.”

 

Marketers’ foresight

A brand reaches its target audience through advertisements and in today’s time one can reach a cross-section of society through television. Hence, most marketers spend their most of their ad-revenue on TV.

 

Karthi Marshan

Karthi Marshan, EVP & Head Group Marketing, Kotak Mahindra Bank said: “Our estimate is that of the 136mn cable and satellite homes in India, 44mn are DTH. Of these, about 8 lakh are currently HD subscribers. That is less than 2% of DTH homes and a tad over 0.5% of all C&S homes. Now whether this affects a marketer or not depends on who is her core TG. For the average brand with SEC A & B as their TG this probably does not matter much, but yes, premium and super premium brands do stand to miss out on what could be core TG due to the fact that some of the HD channels still don’t run advertising.”

 

He added: “The next question that marketers will have to contend with is broadcasters expecting to be paid separately or additionally for these audiences. While brands will make the argument that we have bought programs or channel presences and hence our ads should carry seamlessly to HD as well, broadcasters may well have a tenable argument to the effect that they are in the audience delivery business, and a premium audience can and should command a premium for access.”

 

Similarly, Ashutosh Tiwary, EVP- Strategic Marketing, Godrej, feels that one needs to observe the situation over a period of time to know what will happen next: “If the ratings and numbers of non-HD channels on which the media deals are based, get affected due to HD feeds, then HD channels will probably will have to air the ads to make up. However, if HD numbers prove to be totally incremental, then the converse might hold true. Overall, if viewer retention and engagement goes up due to higher quality and reduced clutter, HD might require specific treatment.”

 

While Simeran Bhasin, marketing head, Fastrack and new brands at Titan said that as a consumer she loves to watch her favourite programmes on ad-free HD channels, but as marketer she’ll have to look for other methods to reach the TG. “HD is here to stay and marketers will have to figure out ways to reach out their consumers. Because with technology available everywhere, one can easily switch-off their TV sets to watch something online which is accessible without any interruptions. So, marketers will have to sooner or later adapt to survive.”

 

Vipin Mehra, former sales head, Pidilite, said: “It’s very important for any brand to send constant reminders to its TG about its existence, especially in today’s competitive market. So, brands will prefer a channel which will help them in doing so.”

 

Keeping their fingers crossed

Creative people on the other hand aren’t very happy with HD channels as they affect their work/business, but feel that things will change for good.

 

KS Chakravarthy, director, DraftFCB Ulka, felt that though one might want to enjoy an ad-free telecast, it’s just a passing phase because channels have to make revenue which comes from advertisements. KV Sridhar, National Creative Director at Leo Burnett, too agreed with Mr Chakravarthy, adding: “When and as HD channels availability increases, broadcasters might be forced to start showcasing advertisements as well.”

 

Who’ll be the ‘real’ beneficiary?

Advertisements or not advertisements, broadcasters have to follow a business plan and many feel that they’ll have to succumb to it. “One or two networks have begun taking a smattering of ads, and this will only grow, I am guessing,” said Mr Marshan. A business is run on revenue and if it cannot be generated, then changes have to be made. However, for the time being, the viewer can enjoy an ad-free programme.

One will just have to wait and watch.

 

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