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On February 23, 2013, the Telecom Regulatory Authority of India (Trai) issued the Standards of Quality of Service (duration of advertisements on television channels) (amendment) Regulations, 2013 (3 OF 2013). The third clause of the said amendment has created a storm in the broadcasting universe. It reads: "Duration of advertisements in a clock hour: No broadcaster shall, in its broadcast of a programme, carry advertisements exceeding twelve minutes in a clock hour."
Explanation: The clock hour means a period of sixty minutes commencing from 00:00 of an hour and ending at 00:60 of that hour. (example: 14:00 to 15:00 hours).
While the viewers and the general public have welcomed the initiative, the already battered channels, especially the news channels, have reacted with sharp criticism to the amendment. This is an attempt to approach the dilemma from different perspectives. The consumer (viewer), the channel network and the advertiser.
For the consumer
n Better viewing experience: Advertising in any media format is interruptive in nature. More so when it comes to live sports, news, entertainment and reality television. As a viewer, long breaks that come more frequently on movie channels during the climax are a genuine irritant. It gets even murkier with some news channels stretching the norm at times to a ridiculous 30 minutes per hour. It is high time we encourage some mechanism to control this trend.
n The regulations were long overdue: Trai is only enforcing the accepted advertising code of the Cable Television Networks Rules (CTNR) 1994. In fact, most markets across the world have laid down norms for advertising time control for television and these are adhered to with all intent. These norms become even stricter when it comes to programming in kids genre. The maximum time allowed for advertising content for programming for children is limited to 10 minutes per clock hour in the US and Australia.
n Better content: Since channels will work towards creating more programmes, which attract viewership, they will have to offer better programming content.
For the channel
n The demand-supply story: With more than 800 television channels and more than 170 pay channels, the television media planners are spoilt for choice when it comes to driving frequency. It is a classic over supply, poor demand story. The industry wants to address this issue by creating more low price supply, which could be disastrous. An over-supply situation can be managed only by controlling supply, more so when the demand is slowing down.
n Better rates: With controlled supply, once the demand improves with the market revival, the channels will be in a position to command better rates, as the advertising inventory will be limited.
n Equitable distribution of revenues: In the current situation, most channel networks have a couple of lead channels and they offer a bundle of other channels in terms of channels/ day-parts as fillers. The new regulation will help the second/third-in-line channels to get fully paid advertising revenues rather than bundled derivatives. In fact, the top-line channels must be celebrating the regulation in private - as they can price their inventory higher, and also have high demand-supply imbalance in their favour.
For the advertiser
If at all there is anyone who would be anxious about the outcome of this regulation, it will have to be the advertiser. On the brighter side, this regulation will result in reducing clutter and hence one can expect better efficiencies of delivery. But it will also mean lesser duration of visibility on television in absolute terms for the same rupee. Advertisers may have to increase their investment in media research to understand the effect on the recall parameters better.
Also, overall media spends would go up to address the lower GRPs.
Post amendment enforcement scenario: With Trai all set to enforce the regulations soon, what will be the options available for advertisers? A look at some of the possibilities:
n One of the immediate effects will be some branding initiatives including re-launching or rebranding of a few channels across genres, especially those which have shown promise. This will be done to create some salient prime inventory. Also, top advertisers will look at creating branded programming on these channels. There will be a sustained effort to create new media properties and OOH will lead the effort outside television.
n News channels will face the toughest challenge to attract advertising revenues if these norms get applicable. To start with, they will look at attracting new viewer segments like the young adults and teens. There will be greater integration of online and broadcast media and channel tickers will evolve into a powerful delivery method beyond television.
n Personally, I think, Trai's phrase "in its broadcast of a programme" has something inherently exploitable and one can even expect one-hour advertorials as per Trai's definition of an hour. This may be permissible, as the advertising is not happening during any "programme" as per Trai.
n In terms of revenues, print can expect some immediate rise in its share, especially from FMCG brands, which were using television for thematic communication and print for tactical initiatives.
n A new form of volume agreement between the brand and the channel networks could be devised to ensure presence in top rated programmes from the network.
n Frequency-building media like radio and outdoor will benefit as reminder value inventory (frequency builders) will go down.
A reduced window for advertising on prime television is a major challenge for both the advertiser and the channel network. While one does not want to negate the role of small media, I believe its impact will be felt on planning of large, traditional media and will not really change consumption of new media options like digital or in-programme placements. While the debates can carry on forever, one person who will hopefully be smiling at the end of all this will be the media consumer.
Mangesh Borse
Associate dean, marketing, Prin L N Welingkar Institute of Management
