Peter Mukerjea’s Media Mullings: Less is More!

26 Mar,2013

By Peter Mukerjea

 

So, is it a surprise that broadcasters are unhappy with the TRAI for enforcing the 10+2 per hour of commercial time on TV channels?

 

Short-term pain for long-term gain in simple terms is what it will be. But no one wants short-term pain.

 

Many of my friends in the broadcast industry are up in arms about this ruling, but when we talk about this, to be fair, they do conclude that it is actually the right thing to do for their business. After all, it will see the advertising rates go up, which will benefit their individual revenue lines and their shareholders in turn. Once the 10+2 regulation sets in and becomes standard operating principle, investors both national and international will re-look at the Indian broadcast industry as an investment opportunity. They will see that the supply-demand ratio is finite and not infinite as it is today. Infinite makes no ‘big picture’ sense.

 

Advertisers, brand managers, small, medium and large will not like the sound of this 10+2 directive either, as it will mean that they will need to increase their TV budgets if they want to continue to get the same ‘secondage’ as they’re getting today. There just won’t be enough ‘secondage’ to go round and advertisers could get into a bidding war for the best TV properties. But the flip side to that is that they will get a secure share of voice. Surely advertisers see more value in their brands being 1/20 than being 1/30. And, if they tell you they don’t care about that, then that’s the biggest load of rubbish you will hear and you can’t let them get away with that.

 

And all credit to the TRAI who have now really begun to act like the regulator it should be ie to look at the big picture – digitization, commercial time, quality of service and so on – but not get drawn into the itsy bitsy litigation attempts of the various stakeholders in the business.

 

There cannot be a single broadcast market anywhere in the grown-up world, where there is ‘unlimited inventory’ of commercial time available to broadcasters. The economics of the broadcast business would not hold up for very long anywhere if there was ‘unlimited inventory’ in any market and surely this is one of the reasons the economics of the broadcasting industry in India is so weak and will not improve so long as it continues with broadcasters taking more ads into their programmes/movies at the expense of the quality of service to the viewers.

 

And why should sports be an exception to the rule? The ad usage will need to be modified to cater to the differing nature of each sport, as tennis differs from cricket and from football or F1, but the 10+2 rule should stay the same.

 

All promo tags, bumpers, drop-downs, split screens are all possible so long as they stay within the 10+2 guideline. It’s not that difficult. Of course broadcasters will resist. Someone once said – “Resistance after all, is the best form of seduction.”

 

In the final analysis of broadcasters’ economic sustainability, growth and profitability, the adage “less is more” will ring true and makes sense for all broadcasters but the faint-hearted or the economically very weak as they will simply not survive, in a survival-of-the-fittest environment.

 

They will simply have to get better at what they do and compete, or fall over and get out of the business.

 

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One response to “Peter Mukerjea’s Media Mullings: Less is More!”

  1. PP says:

    Pete – you will be surprised to know that the standard has changed since 2006. I was shocked to see broadcasters use 12 mins to an hour as the standard especially because I have always been used to the 10 mins standard. In my previous job, I would be worried if I see a 105% inventory fill on a 10 min inventory but there are broadcasters today who would be at 120% of the 12 mins standard. Hilarious!

    We even dropped spots if we couldn’t accommodate an advertiser with a lower rate or some one who comes late would come at a premium. You would remember that! Its all changed now. No wonder, revenues have stayed flat for most broadcasters.

    A higher inventory utilization (%) means a lower ER – obvious fact, but I don’t see the relevant people looking at it in that light. Well, each one to his own!

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