Ad break: Good or Bad?

In a democracy,regulation is essential to maintain balances. At the same time,there needs to be uniformity in regulation. The first point in the 12-minutes per hour cap on TV advertising is the fact that,it is being imposed on the TV medium alone. Is ‘viewer experience’ on TV different from ‘reader experience’ in print or internet? Or even the aesthetic sense of their cities being impacted by innumerable outdoor advertising?

The issue of this cap came about when the digitisation process was rolled out with broadcasters arguing of getting better revenues from subscription. There are two business models in broadcast — one set of channels that are Free-to-Air,(FTA) more than 450 in number,and then there are the Pay channels. The FTA channels are those where no subscription fee is to be paid by Multiple-System Operators to the broadcasters for its re-transmission on cable. The broadcaster therefore earns no revenues from subscription. This negates the argument for the FTA channels that their subscription revenue has increased.

Next is the point of the roll-out of digitisation itself. With DAS Phase 2,the roll-out has happened in 38 cities along with four metros in Phase 1,while the rest of India is still analogue. The completion status of transition from analogue to digital is still ambiguous. But the most critical component of the digitisation process is the declaration of packages by cable operators. A la carte selection of channels is still not implemented and the monthly subscriptions are still as per the pre-digitisation model. So where is the question of revenue enhancement even for pay channels?

Finally,broadcasters are running a business and would not go overboard with ad breaks. They are committed to advertisers to deliver viewership and will not be irresponsible. The authorities should therefore leave it to broadcasters and viewers.

Nikhil Rangnekar

CEO – SA1,Spatial Access

The 10+2 limit in TV advertising will definitely result in a better viewing experience since viewers will get to watch more content than advertising. All viewers have been victims of excessive advertising on channels. While watching a cricket match,typically the first ball of a new over used to get cut because of an ad exceeded the break time. Break durations on movie channels sometimes extend up to 20 minutes. Except for ‘Breaking News’ time,even news channels have long advertising breaks. All this has been frustrating for the viewer.

With a fixed break duration,the audience will cut down their channel surfing habit resulting in higher viewership during ad breaks. If currently the viewership during a break drops by 20 per cent,this drop could reduce to 10 per cent. This means that for an advertiser if the rate increases by 10 per cent,the CPRP will still be the same because the viewership will also increase by 10 per cent. Hence,it might be a win-win situation for everyone.

With reduced inventory available,advertisers will have to start planning their campaigns well in advance and this would result in the advertising industry moving to a more professional approach in media planning. Last minute campaign releases will stop,improving the working process in the industry.

Having said this,the regulation has to be implemented in sync with other key developments,which is DAS. If broadcasters see a big upswing in their subscription revenue,that eases the pressure on advertising revenue and this cap will prove to be beneficial to all. However,if that does not happen and broadcasters have to depend on advertising revenue to meet their targets,this could have an adverse impact on the industry since the rates will have to be increased significantly for some channels/ genres,which advertisers might not be willing to accept.