MUMBAI: The Indian broadcasting industry is in a tizzy following the Telecom Regulatory Authority of India (Trai)?s binding decision to implement a 12 minute per hour ad cap effective from October 1.

The ad cap will understandably have an adverse effect on broadcasters? inventories which help them generate an estimated Rs 14,000 crore in advertising revenues. And this could also impact their

survival, because most of them are dependent on sale of their respective advertising inventories at a good price. All in all, it could well turn turn out to be a very expensive regulation.

General entertainment channels like Colors and Star have already announced that they will be raising ad rates by 30 per cent and 20 per cent respectively. This move does not really come as a surprise for many, as Colors CEO Raj Nayak explains: "We would have anyway done our annual hike by about 10-15 per cent so as to be able to absorb the increase in costs of programming, production etc. We have not still seen the full impact of digitisation in the form of either a fair share of reduction in carriage fees or an increase in subscription revenue, and with the inventory cap becoming a reality, we are left with no option but to increase our advertising rates to be able to stay on course."

The hike in ad rates on Colors will be effective from July 1 but one wonders will it work in a marketplace where negotiation is a norm and prices are anyway discounted by up to 30 per cent? To this Nayak asserts: "We are here for the long term and we value our relationships with our clients. We will work closely with them to arrive at a win win situation. Having said that I believe, clients who are paying least will have the biggest impact."

The channel has done all its calculations based on its revenue objectives, annual rate increases and has arrived at the 30 per cent hike figure, which Nayak says is what the channel needs on an average to stay on course.

Star India CEO Uday Shankar preferred to keep his cards close to his chest. He said, "I cannot talk about our strategy."

However, the ad rate hike may also drive advertisers towards lower priced outlets and other lesser crowded genres.

Vikas Khanchandani - Consumption of inventories on under-leveraged channels will improve.

AIDEM director Vikas Khanchandani says: "Both GEC and Niche play different roles for different advertisers and the weight-age applied are depending on the need of the brand. The hike in advertising rates is to bridge the gap from reduction in available inventory to broadcasters on account of the decision by TRAI on the cap. Each broadcaster or channel will increase their rates basis their current P&L and the impact of reduction in airtime over what they are currently selling over the cap and/ or any other escalation in input costs. The consumption of inventories on under-leveraged channels will rise."

In that case, will GECs bother about inventories being spread over to niche channels and other outlets? "That?s not such a bad thing. The truth is there is already an overflow of inventory on GEC channels even without the cap, and with the cap the supply demand ratio will change dramatically," says Nayak.

The ad cap is thus affecting one and all, so wouldn?t the niche channels want to go the GEC way and hike their ad rates as well? Do we see the rate hike spreading across the ecosystem- news, niche, etc or to other mediums? Nayak replies in the affirmative saying: "We believe this problem of supply-demand will also spill over to the Niche, Music, Sports & News & movie channels too. So I will not be surprised if they too will be forced to re-look at their advertising rates. I would like to believe that with the pipe getting choked, these channels too will not be left with an option but to increase their ad rates, unless they have a magic wand or a secret formula."

A magic wand or not, all broadcasters general entertainment or niche would do all that they can to lessen the adverse impact of the impending ad cap.

Offering a media buyer?s perspective ZenithOptimedia partner Navin Khemka said that the smaller channels that sometimes run as much as 25 minutes of ads in an hour will find it difficult to sustain themselves. "They will take a big hit if they are not able to increase the effective rate. The ones who run 12-15 minutes should be fine. The key is to be a top three player in a genre. Then you should be alright and manage a hike. At the moment it is hard to say what kind of a rate hike channels can manage. You also have to consider the fact that sometimes annual deals are done. Channels will either try their best to honour them which they should or do some restructuring."

In terms of ratings he thinks that the issue of variance in numbers will resolved in a couple of months time. "It is actually in the channels interest that the fluctuation continues as then they can say that they are not responsible for the poor delivery."

A+E Networks| TV18 VP, head marketing Sangeetha Aiyer offers a different take saying that for the factual and lifestyle genres increasing rates might not be feasible. "The current economic environment is difficult. The ad market is not great. With the slowdown most genres apart from the Hindi GECs are facing a revenue crunch. Also packaging in digital cable has not happened. Tam also has to get its house in order. FMCGs account for 40 per cent of the factual genres revenue. So ratings do play a role especially since factual channels have language feeds."

So what is the way forward? She notes that doing more local properties is one way as for that channels could charge a premium. "The aim should be to conceptualise ideas that can work as a tentpole which is what we did for ?The Greatest Indian?. Of course for that you have to earmark monies for production, marketing. I would have preferred it if the ad cap had come once digitisation was complete. We normally air 15 seconds of ads."

MSM Rohit Gupta - It?s a demand-supply equation.

MultiScreenMedia (MSM) president network sales, licensing and telephony Rohit Gupta declined to talk about his channel's strategy. He however added that it is likely that most genres will go in for a rate hike. "If you don?t then you will lose money. It is a demand supply equation. Market forces will take over. You could see a situation where clients look at more genres and channels given the shortage of available inventory on channels that they frequently use."

Times Television Trigunayat - Movies Now to hike rates by 50%

Movies Now is looking at a 50 per cent rate hike in the coming six months. Times Television Network CEO English entertainment channels Ajay Trigunayat is in favour of the reduced inventory. "English movie channels air around 15 minutes of ads in an hour. What was happening was that channels in other genres were abusing inventory and airing as much as 20 minutes an hour. This compromised the effective rate in the English movie genre. Now the viewer experience will be better. Less ads will result in more stickiness for the genre which will also justify a rate hike. Overall I expect ad rates in the English movie genre to grow by 25 -30 per cent."

Trigunayat concedes that the 50 per cent hike target is ambitious. "But we always set out ambitious targets for ourselves. In the short term there will be issues. I expect resistance from clients. But things will iron themselves out. A clearer picture of various channels? strategies will emerge by August. On our part we are not getting the rate that we feel we deserve. Generally for a new player clients wait to see the response that the channel is getting. The other challenge has been TAM ratings which have seen big fluctuations. Our rate has been flat for the past six months and fluctuations in the ratings have played a part in that. The ratings could take over a year to settle down. Clients therefore will have to look at other metrics like brand positioning, quality of the content etc. We also have to spend more time convincing clients".

On the issue of rating fluctuations Gupta conceded that there is a trust issue. "At the same time clients do not only use ratings. There is qualitative analysis that goes into media buying. Clients do their research. Over the past five years Sony?s inventory has stayed the same. Yet we manage revenue growth of 20-30 per cent as we hike rates."

Asked if less inventory on more mainstream genres will benefit the English movie genre Trigunayat noted that English movie channels are already running at full capacity. "If you look at players whether it is us or Star Movies, HBO, Pix their inventory is full. They will all increase rates. Clients will benefit if they book spots now well in advance which is what happens in the US."

Neo Sports Krishnan - Ad cap unfair on sports genre

Neo Sports Broadcast COO Prasana Krishnan said that the ad cap is unfair on the sports genre as breaks happen according to the sports action going on rather than on the basis of the clock. "Sometimes you might not have much of an ad break in an hour. Sometimes you might have more if there is a live cricket telecast. I would have preferred it if the rule was an average of 12 minutes an hour in a day. Then things would have evened out".

The news genre is not left unaffected by this development. An industry insider points out that the government should be more considerate towards news broadcasters. "You cannot reduce our ad inventories while you do nothing about the enormous burden of carriage fees that we have to bear." He further adds that unless the carriage fee is brought down substantially and subscription revenues are also looked at, the ad cap compulsion is unfair. There must be a considerable drop in carriage fees wherein a network of 2-3 channels has to pay approximately Rs 10 crore - Rs 12 crore while single channels pay not more than Rs 2 crore - Rs 3 crore, he said.

Khanchandani adds: "Impact on news will be different from that of niche. News is most impacted by the decision and have to significantly increase their own rates on account of very high dependence on ad time. If the increase in GEC pricing is very steep the advertiser might optimise the plans in favour of some genres but as I mentioned it depends on the requirement of the brand."

A CEO of a news channel while refusing to come on record admitted that "the news broadcasting industry will also look at hiking ad rates because even our inventories are being adversely affected."

In such a complex scenario based on the government and business environment, the advertiser?s target audience and consequent decision remains the bone of contention. After all, with the impending digitisation, there is a lot of ambiguity revolving around which channels are reaching the audience and which are not.

Khanchandani gives some perspective: "The television platform continues to be an effective medium for advertisers at large and I strongly believe in the medium. The impact will be varied across genres and channels. It?s a function of demand and supply and their respective state of inventory utilisation. Fundamentally prices will go up across channels and inventory utilisation across under leveraged channels will improve."

GECs are confident of their loyal advertisers; as Nayak puts it: "The advertising market is buoyant, I see a reasonable growth this year over previous year and we believe as long as we deliver value people will continue to invest in our channel."

MUMBAI: Riding on the back of several close encounters and an engaging month long marketing campaign, the ratings for the sixth edition of the Indian Premier League (IPL) on Max and Six have held steady.

According to Tam data provided by the broadcaster, the first five matches and the Opening Ceremony got an average TVR of 3.8 for CS 4+ TG All India market. It has managed a reach of 100 million.

Last time the first six matches and the Opening Ceremony got an average TVR of 3.9 but the reach was 78 million. The story is similar in the Hindi Speaking Markets (HSM) where the average rating this time is 4 compared to 4.1 last year.

Data provided by the broadcaster also shows that the Mumbai Indians matches are followed the most. The closely fought match between Royal Challengers Bangalore and Mumbai Indians got a TVR of 4.9, the highest so far for any match.

The Mumbai Indians versus Chennai Super Kings match got a TVR of 4.5. The first match last year which featured these two teams had crossed a TVR of 5 with a 5.5 TVR. Following the trend seen in previous years the early evening match had a lower rating.

The match between the Rajasthan Royals and Delhi Daredevils at 4 pm this time had a rating of 2.1. The Opening Ceremony?s viewership which featured the likes of Pitbull improved with a rating of 1.8 compared to 1.2 last year.

Multi Screen Media (MSM) president network sales, licensing and telephony Rohit Gupta said that the ratings were a combination of different factors. "Despite Tam?s panel expansion the event has done well. There is more buzz this time. The matches are closely fought. The stadiums are packed. On the ad inventory front we are more or less sold out. We have got 11 sponsors."

He adds that the IPL has hit Hindi GECs. "If you see the ratings of other channels like Zee, Colors, and Star have been hit. ?Dabangg? would have contributed 28-30 GRPs for Star. If you take that away then Star has taken a big hit."

Vivaki Exchange CEO Mona Jain said that the event has stabilised. "There is a lot of paraphernalia happening around it. It is getting into the primetime viewing of homes. People want to be clued into the hot topic of the day which is the IPL. Also cricket has gotten a fresh lease of life after India beat Australia."

Max EVP and Business Head Neeraj Vyas reveals that not only has the reach of the property gone up, the time spent has also remained steady at 24-25 minutes. The reach, particularly, has been encouraging as the tournament happened in the backdrop of 38 cities going digital in Phase II, adds Vyas.

MSM has already sold 90 per cent of its inventory for tournament with 11 sponsors on-board which include Pepsi and Vodafone as co-presenting sponsors with Tata Photon, Samsung Mobile, Panasonic, Havells, Usha Appliances, Karbonn Tablets, Godrej, and Parle as associate sponsors.

MUMBAI: The wait is over as cricket?s biggest extravaganza is back with a bang and there are a lot of new things to look forward to. For those uninitiated, the cash-rich league has got a new title sponsor in Pepsi, a new franchise in Sunrisers Hyderabad and has found a new home in Sony Six which will simulcast the event along with sister channel Sony Max.

Multi Screen Media (MSM), IPL?s broadcast rights partner, is sitting pretty this year having roped in 11 broadcast sponsors unlike last year when the broadcaster had to go into the tournament with unsold inventories as it refused to bow down before the advertisers who were asking for rate reduction.

The broadcaster had this year played the volume game by rationalising ad rates by 10 per cent. The reduction in ad rate did the trick with old sponsors like Samsung and Godrej coming back on-board and new ones like Parle jumping on to the IPL bandwagon.

The co-presenting sponsors are Pepsi and Vodafone while the nine associate sponsors include Tata Photon, Samsung Mobile, Panasonic, Havells, Usha Appliances, Karbonn Tablets, Godrej, and Parle.

MSM president network sales, licensing and telephony Rohit Gupta told Indiantelevision.com that 90 per cent of the inventory had been sold out, at the time of writing. The remaining inventory will be sold at later stage of the tournament at a premium.

?We have got 11 sponsors on-board this year and have sold 90 per cent of the inventory. We have seen a growth of 25-30 per cent. We have also expanded our advertiser base due to entry of new advertisers and the return of old advertisers due to rate reduction,? Gupta asserted.

Encouraged by the response, the broadcaster has increased spot buy rates to Rs 500,000 per 10 second spot, says Gupta. It has also hiked spot rates for semi-finals as well as the final match to Rs 1.5 million per 10 second spot compared to Rs 1-1.2 million last year.

Vivaki Exchange CEO Mona Jain had earlier told Indiantelevision.com that the broadcaster will earn Rs 8.5 billion in ad revenue up Rs 1.5 billion from Rs 7 billion last year.

The good news for the broadcaster is that average television rating for the IPL is expected to increase 2.6 per cent to 3.9 TVR for CS15+ years, Male/Female, SEC ABC, as per MEC. Mumbai Indians (4.5 TVR), Kolkata Knight Riders (4.2 TVR) and Chennai Super Kings (4.1 TVR) games are projected to have the highest ratings.

It?s been a mixed bag for Board of Control for Cricket in India (BCCI) though. While it had managed to strike a huge title sponsorship deal with Pepsi valued Rs 3.96 billion over a period of five years it has been unable to retain associate on-ground sponsors with the sole exception of Vodafone.

With Citi, Hero MotoCorp, Volkswagen, Karbonn Mobiles and Fly Kingfisher refusing to renew deals for different reasons the BCCI had to scout for new sponsors that saw Yes Bank and Star Plus coming on-board.

IPL on the go

The consumption of IPL is not just happening on television. The digital medium is slowly gaining traction among discerning consumers and the direct beneficiary of this alternate viewing is Times Internet Limited (TIL), the new media arm of Times Group, which has the global digital rights of the IPL including radio, internet and mobile.

TIL recently renewed its partnership with YouTube for 2013 and 2014 that will enable it to stream all 76 matches of IPL season 6 on its over-the-top (OTT) platform Boxtv.com and its dedicated YouTube channel youtube.com/indiatimes.

As part of the deal, YouTube will also have exclusive live-streaming rights for desktop web viewing (with a five minute delay in India) and non-exclusive rights for mobile viewing through the 2013 and 2014 tournaments.

India?s leading mobile TV service nexGTv has also bagged the official mobile streaming rights of Pepsi IPL 2013.

?IPL has been a big driver for us, in steadily engaging and growing our young, sports savvy users over the last two years, ? says TIL CEO Satyan Gajwani. ?We saw a 43 per cent growth in audience base just last year on IPL online. Our partnership with YouTube is strategic in building supplementary touch points with these audiences and we?re happy to renew our association with it.?

Then there is huge activity that BCCI has planned for Twitterati by coming up with initiatives which will allow Twitter users to have their tweets broadcast on television. That is surely going to set the Twitter universe abuzz with activity around IPL 6.

Opening ceremony

At the time of writing, there was a mad scramble for tickets to attend the opening ceremony at the Salt Lake stadium in Kolkatta. Llive performances from a medley of international artists including music sensation Pitbull along with flying drummers, Chinese percussionists, awesome fireworks and some of the biggest Indian film stars including Shah Rukh Khan, Katrina Kaif and Deepika Padukone kept the audience swaying in their seats.

It set the tone for Season 6 of IPL, the subcontinent?s biggest entertainer, which is slated to see the who?s who of the corporate, cinema, political, cricket worlds pouring into watch the action on the field. And hundreds of millions of viewers in India and worldwide who will tune into their TV sets or online or on their handphones.

MUMBAI: With broadcasters upping investments on content and marketing, monetisation from multiple streams becomes crucial in a digitised market.

Multi Screen Media President Ad Sales Rohit Gupta feels the key in a digital market will be to create customised content that suits the need of a specific demographic and market.

The addition of LC1 markets to TAM panel will increase their weightage vis-a-vis the four metros. It will also force broadcasters to rethink their content strategy towards these markets.

?Digitisation is key challenge for broadcasters. Monetisation of content is key. With addition of LC1 markets, their weightage has gone up. Creating different content for different type of audiences will be the key,? Gupta said during a panel discussion on ?Revisiting Content in Digitised Space and Impact of Ratings in the Changed Scenario?.
Gupta said television as a medium has seen phenomenal growth to become the biggest medium but it remains under-indexed when it comes to ad spends.

?We are adding 15 million consumers every year but we are still under-indexed vis-a-vis advertising revenue growth. Broadcasters are not getting the benefits of additional eyeballs,? he added.

Gupta said it?s high time that the industry works together to create a new television measurement system. A new system is in the interest of both broadcasters as well as media gencies.

Disney UTV Media Networks CEO MK Anand said the ad revenue led business is here to stay. It will co-exist with subscription driven business model.

?The advertising revenue led model is here to stay. Ratings are not anti-thetical to the broadcast business. Digital Addressable System (DAS) will lead to two kind of broadcasters - one who are subscription led and the ones who are advertising revenue led,? he said.

According to Anand, broadcasters irrespective of the genre have to work hard in a digitised market. The packages that MSOs design will also be of paramount importance.

Time spent in digital homes has increased due to bucketing of content genre-wise, he added.

IndiaCast Group COO Gaurav Gandhi said digitisation will change three things: it will change economics, choice of services and accountability and measurement.

?The cost of content has gone up considerably, it?s on par with international markets. But the revenue growth is not sufficient,? Gandhi said.

Broadcasters will also have to look at other revenue models apart from advertising and subscription to monetise their content.

Natpe President and CEO Rod H Perta said the problem of inadequate measurement system and fragmentation of market is not unique to India. US too has gone through the same path.

Digitisation, he said, will lead to emergence of new business models and opportunities. The question is whether broadcasters are ready for this change, he asked.

He said ratings are an equally ?contentious? issue in US but the market over there has matured and advertisers now don?t just look at ratings while making advertising decision.

?In fragmented markets, advertisers don?t just look at ratings. They also look at the quality of content,? Perta contended.

TAM India CEO LV Krishnan said the issue of reliability of data comes only when the ratings starts falling. Broadcasters, he said, don?t complain when the numbers are in their favour.

He said viewership measurement in multiple-screen era will go from platform-centric to becoming platform-agnostic.

?It doesn?t matter which platform the content is consumed. Parameters will change as content consumption will happen on different platforms,? Krishnan said.

Fremantle Asia MD Paul O Hanlon said, ?We have to rethink the way we produce content which made us look at different formats in different ways and segment it to make it flexible for broadcasters.

?The cost of content is going up, so we have to rethink the business model. We are looking at different ways to monetise content like AFP and not just remain dependent on broadcast fee.?