Shailesh Kapoor | Inventory Not Found: TRAI Again!

22 Feb,2013

By Shailesh Kapoor


Many of us complain about excessive advertising on television, especially during movies and award shows. In what can be called a pro-consumer move, TRAI mandated last year that channels should carry a maximum of 12 minutes of inventory every hour, including channel promotions. There has been no serious implementation of the guideline, and the heat on this subject is picking up again now.


Personally, I have been a prime proponent of a viewer experience where intrusive advertising is limited. Such an experience does at least two things:


1. The viewers enjoy a more satisfying viewing session, leading to higher affinity for the brand (channel) over time.

2. In the absence of endless inventory in its wares, the selling team at the channel is forced to consider rate increase and non-intrusive advertising (AFPs, product placements, etc.) as solutions. In particular, a rate increase is what traditionally undersold genres like Hindi movies and kids should be pushing with great conviction.


There are many like me who believe that a limited-inventory environment is an industry-friendly move, not just a viewer-friendly move. In the long run, it will create better monetization of both the advertising inventory and the viewer experience.


A shortfall of supply (inventory) is bound to increase prices over time. Top advertisers can’t afford to ignore popular TV genres such as GECs, movies, news and kids today. There are no substitutes that offer even a fraction of their reach. Hence, a price correction will happen. Just that the short-term impact on the revenue can be unnerving, given the testing times we are in right now.


Having said that, TRAI’s approach to the entire issue is highly misplaced. As a first step, one can rightly argue that a regulatory body has no business deciding how much airtime a channel sells every hour. Market forces should be deciding optimum inventory levels, and if that means that some channels lose out because their competitors give a better viewer experience over time, then so be it!


While I can’t fault the market-forces agreement, that’s not by biggest concern with TRAI’s approach. Where the inventory-cap proposal is breaking down (and will continue to do so) is the policing-oriented mindset with which it has been floated. I’m not even sure if TRAI has really done any mathematics to understand and convince broadcasters of the long-run potential of its proposal. In fact, I’m not even sure if TRAI itself understands this potential deeply and conceptually.


There should have been better engagement with the industry, even if that meant more time. In any case, nothing has been implemented as such, so time has been lost anyway. But a more participative approach would have allowed TRAI and IBF to take a more informed, collective view on the subject.


But the even more fair approach would have been TRAI staying away from the topic altogether. If some channels want to commit hara-kiri by stuffing inventory in their prime time, they should have full freedom to do so. Because logically, the next argument could then be all channels should have equally good programmes, as viewers want good programmes!


Shailesh Kapoor is founder and CEO of media & entertainment research and consulting firm Ormax Media. He spent nine years in the television industry before turning entrepreneur. He can be reached at his Twitter handle @shaileshkapoor


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