Blog

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.