Broadcasters call it their revenue lifeline, while television viewers grumble about too many advertisements interrupting their viewing pleasure. Enter the umpire in this dispute.
The Telecom Regulatory Authority of India has stepped in to try and bring a balance for both sides. It has circulated a consultation paper on 'Issues Related to Advertisements in TV Channels' for discussion that will close on April 2, after which it will take regulatory decisions.
"There is no doubt that in India, the television viewing experience is bad," said Devendra Parulekar, partner, Ernst & Young. He said the top four-five general entertainment channels are running around 14 minutes of advertising in a clock hour, while the permitted limit is 12 minutes - 10 minutes of ad commercial and two minutes of channel promotion time. "Besides, during film climaxes, the ad breaks' frequency goes up and volume levels on your television go through the roof when the ads come on."
According to a survey carried out by the Centre of Media Studies, the duration of ads in six major news channels over the last four years has been 35% of the prime time slot (7-11pm), against the allowed hourly limit of 20%. The maximum yearly average is as high as 47.4%.
Consumers also question why they should suffer ad breaks if they are paying channel subscription on the direct-to-home (DTH) platform.
Bhaskar Bhattacharya, a Mumbai-based investment advisor who watches DTH TV, recalled happily watching high definition ad-free cricket last year. "However, nowhere is the world is there a sustainable model without advertising," he added ruefully.
While recognising that free-to-air (FTA) channels need their ad revenues, TRAI says that in the pay channel scenario, ad dependence comes down. But then, it also cracked down on subscription rates, capping channel rates for DTH/digital TV at Rs 5.30 a month, Parulekar said. "TRAI is proposing bringing down 12-14 minutes of ad time on pay channels to six minutes. All major general entertainment, sports and news channels are pay today. Close to 80% of ad revenues go to pay channels. If the ad time drops, ad rates will go up. TRAI's proposal would shave off nearly Rs 5,000 crore of the Rs 11,600 crore ad revenue a year."
A key issue is also about the digitisation of the cable TV industry, which could take 30 months. "Limiting ad time before the digitisation is complete could be killing for the broadcasters," he said.
Ashish Sehgal, executive vice president, Zee Entertainment Enterprise Limited (ZEEL) and head, network sales, ZEEL and 10 Network, said TRAI's subscription limits has put revenue dependence for broadcasters at 70:30 in favour of advertising. "A 50% reduction in ad time is not sustainable. How will broadcasters ensure good programming quality without money? Channels are already looking at self-regulating their ad time."
Punitha Arumugam, group CEO, Madison Media, said, "News and sports channels will definitely get hit, as too smaller channels."
A senior official from Star India said that TRAI's proposals were already present in the Cable TV Act & Rules. "There is no reason for reinventing the wheel," he said, adding that TRAI did not have any power to regulate advertising; the Information and Broadcasting (I&B) Ministry does.
TRAI disagrees, saying it has some decision-making powers given by the government.
Broadcasters are looking at the Indian Broadcasting Foundation (IBF) to intervene. Naresh Chahal, director-finance, IBF, said that the association has requested TRAI to stretch its deadline to April 15. "We will respond to TRAI and if required, will talk to the I&B Ministry as well."
Viewers like Bhattacharya said things were perhaps best left to the market. "People will not watch a channel if ads are being bumped up too high on it."
Parulekar agreed: "Why put subscription caps? Let the customer choose. There may be pressure at the base pack level of Rs 150, but why keep the top end of the market price-inflexible?"