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Acting on a petition by Kantar Media, the high court here on Wednesday stayed a contentious provision in the guidelines issued by the government to cap cross-holding between rating agencies and broadcasters, advertisers and advertising agencies at 10 per cent.
Kantar Media, the 50 per cent shareholder in television ratings agency TAM Media Research, had challenged the government’s decision to regulate TV rating agencies in the country since the regulation was to come into effect from February 15. Kantar is part of the WPP group, which posted revenues in excess of $10 billion in 2012.
Disclose ad affiliates, clients
“The court has stayed the clauses which say that if there is cross-holding between TV rating agencies and advertiser, one has to choose only one business. The matter will be taken up on March 6 and, in the meantime, TAM has to register itself with the authorities,” said Kantar counsel Mukul Rohatgi.
The court also asked Kantar to disclose its affiliated companies in the advertising sector, as well as give a list of its significant clients within two weeks.
The court has also decided to push back the registration date for television rating agencies by 15 days to March 6 and TAM will have to abide by the remaining provisions of the regulation. The relief will hold until the court takes a final decision.
New policy
The government had in January this year decided to regulate the television rating system in the country and asked rating agencies to register with the information and broadcasting (I&B) ministry by February 16. According to the new policy guidelines, no single entity can hold paid-up equity in excess of 10 per cent simultaneously in a rating agency and broadcaster, advertiser or advertising agency.
On Tuesday, Kantar had argued the I&B ministry’s directive had been done under an executive action, which can be questioned in a court of law. Kantar also informed the court of a possible blackout in the absence of a rating agency in the country, while mentioning that political reasons could also be behind the hasty implementation of the new guidelines.
Television rating points, or TRPs, are often used as a parameter by advertisers before selecting a channel or programme to air ads. With the ratings often being criticised for their small sample size and lack of transparency, the ministry asked agencies to increase the minimum panel size to 20,000 panel homes. Plus, agencies should raise the panel home size by 10,000 ever year until the size reaches 50,000 panel homes.
TAM India is a 50:50 joint venture between AC Nielsen and Kantar Media Research. The latter is part of the Martin Sorrell-led WPP Group, which operates a number of media agencies and advertising houses across the globe.
GroupM, the largest media agency group in India (with billings to the tune of Rs 1,000-1,200 crore in 2012) is a part of the WPP Group as are leading creative agencies such as O&M, JWT and Bates.
In an interview with Business Standard last year, Kantar chairman and Chief Executive Eric Salama had revealed his company would be interested in the ratings business in India only as a joint venture with Nielsen, which is the current arrangement.
According to estimates, the advertising money riding on news, Hindi general entertainment and sports channels this year will be Rs 8,000-9,000 crore. Of this, nearly half will be spent in the first half of the year, making it difficult for companies to take proper investment calls without ratings.
Kantar Media, the 50 per cent shareholder in television ratings agency TAM Media Research, had challenged the government’s decision to regulate TV rating agencies in the country since the regulation was to come into effect from February 15. Kantar is part of the WPP group, which posted revenues in excess of $10 billion in 2012.
Disclose ad affiliates, clients
“The court has stayed the clauses which say that if there is cross-holding between TV rating agencies and advertiser, one has to choose only one business. The matter will be taken up on March 6 and, in the meantime, TAM has to register itself with the authorities,” said Kantar counsel Mukul Rohatgi.
The court also asked Kantar to disclose its affiliated companies in the advertising sector, as well as give a list of its significant clients within two weeks.
The court has also decided to push back the registration date for television rating agencies by 15 days to March 6 and TAM will have to abide by the remaining provisions of the regulation. The relief will hold until the court takes a final decision.
New policy
The government had in January this year decided to regulate the television rating system in the country and asked rating agencies to register with the information and broadcasting (I&B) ministry by February 16. According to the new policy guidelines, no single entity can hold paid-up equity in excess of 10 per cent simultaneously in a rating agency and broadcaster, advertiser or advertising agency.
On Tuesday, Kantar had argued the I&B ministry’s directive had been done under an executive action, which can be questioned in a court of law. Kantar also informed the court of a possible blackout in the absence of a rating agency in the country, while mentioning that political reasons could also be behind the hasty implementation of the new guidelines.
Television rating points, or TRPs, are often used as a parameter by advertisers before selecting a channel or programme to air ads. With the ratings often being criticised for their small sample size and lack of transparency, the ministry asked agencies to increase the minimum panel size to 20,000 panel homes. Plus, agencies should raise the panel home size by 10,000 ever year until the size reaches 50,000 panel homes.
TAM India is a 50:50 joint venture between AC Nielsen and Kantar Media Research. The latter is part of the Martin Sorrell-led WPP Group, which operates a number of media agencies and advertising houses across the globe.
GroupM, the largest media agency group in India (with billings to the tune of Rs 1,000-1,200 crore in 2012) is a part of the WPP Group as are leading creative agencies such as O&M, JWT and Bates.
In an interview with Business Standard last year, Kantar chairman and Chief Executive Eric Salama had revealed his company would be interested in the ratings business in India only as a joint venture with Nielsen, which is the current arrangement.
According to estimates, the advertising money riding on news, Hindi general entertainment and sports channels this year will be Rs 8,000-9,000 crore. Of this, nearly half will be spent in the first half of the year, making it difficult for companies to take proper investment calls without ratings.
