HLL's talks with Zee leaves Star India red

As the country's largest advertiser Hindustan Lever (HLL) negotiates a lower advertising rate with the largest entertainment network Star India, arch-rival Zee Network is smiling.

According to sources, HLL is believed to be advertising on 1,000 seconds per channel (across Zee's bouquet) on a daily basis. In recent times, the volume and advertising spends of HLL ads across the Zee network have also increased by 15-20 per cent.

Advertisers like HLL have been negotiating with television broadcasters to lower ad rates post the conditional access system (CAS) roll out in Mumbai, Delhi and Kolkata since January. Advertisers believe that viewership of channels in CAS areas has declined as the entire cable & satellite subscribers in these areas have not migrated to CAS.

Joy Chakraborty, network sales head, Zee Network said, "We are not offering advertisers any reduction post CAS because the impact of CAS on Zee Network is negligible." Confirming that the broadcaster is in talks with the FMCG major he added, "As opportunists we hope to strike a deal with HLL soon."

Star executives accepted that they were in talks with the FMCG major to resolve a "few" issues. Paritosh Joshi, president ad sales & distribution, Star India said, "We are engaged in resolving a few minor issues with HLL. With HLL being our biggest advertiser we have always given them special deals and will continue to do so."

However, he agreed that Star India has marginally witnessed 1-1.5 per cent dip in the overall viewership post the conditional access system (CAS) roll-out. "There is anxiety among the advertisers because nobody yet knows how CAS will eventually pan out," added Joshi. He added that even as CAS seems to concern advertisers and channels, the "money" lies in analog markets which continue to record substantial growth.

Media buying sources add that HLL buys 10 -15 per cent of Star India's ad inventory. Joshi, however, was not unduly worried about HLL's probable shift in allegiance to Zee. Joshi said, "As long as HLL advertises with the general entertainment channel genre we have no reasons to worry. In case they shift the genre to niche channels then we have reasons to worry."

According to industry experts, as Zee network plans to launch new properties, this will be the right time to sign a big deal with HLL.

According to media buying sources, HLL's ad spends on general entertainment channels like Star, Zee and others is around 25-30 per cent or Rs 240 crore of the Rs 800 crore that the FMCG major spends on advertising.