TRAI, in its latest amendment to the proposed regulations on duration of ads on TV channels, has relaxed a few rules while it has made some adverse changes as well. In a reprieve to broadcasters, particularly movie channels, the regulator has deleted the prior regulation which mandated a minimum gap of 15 minutes between two ad sessions (earlier mandate of 30 minutes gap for movie channels). However, compared to the earlier draft, TRAI has hardened its stance on sports broadcasters in particular by stipulating that they stick to the 12 minutes cap as well. All broadcasters will have to submit details of ads carried to TRAI on a quarterly basis from January 2013. Comments from stakeholders on amended regulations will be accepted till September 11. Though we believe that eventually these regulations will be exercised in some form, their timing is ambiguous.
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Win some, lose some
Following TRAI’s regulations on duration of ads on TV channels in May 2012 and TDSAT’s subsequent stay on them, the regulator had agreed in July to hold discussions with broadcasters regarding the ceiling on ad duration. On August 27, it came out with the following amendments to its earlier regulations:
· Sports broadcasters, who were earlier given a leeway of carrying ads during breaks in sporting actions (which could have exceeded 12 minutes per hour), will now have to adhere to the 12 minutes per hour cap as well.
· In a relief to broadcasters, particularly movie channels, TRAI has deleted the prior regulation which mandated a minimum time gap of 15 minutes (30 minutes for movie channels) between two ad sessions. Thus, though broadcasters can now carry ads at any interval, they will have to stick to the 12 minutes per hour ceiling.
· In a new quarterly reporting requirement, all broadcasters will have to submit the details of ads carried on their channels to TRAI in a specified format. The first such report will have to be submitted by January 15, 2013, for Q3FY13.
The regulator had earlier stated that part-screen and drop-down ads will not be permitted and only full screen ads have to be displayed. These regulations will come into force from the date of their publication in the Official Gazette.
Outlook: Negative for news, sports players; may spur digitisation
In its consultation paper dated March 16, 2012, TRAI had stated that ad revenues constitute ~71% of total revenue for pay TV channels in India. If this ceiling on ad duration is implemented before completion of digitisation, it will be negative for broadcasters, especially news and sports broadcasters, whose ad duration exceeds 15 minutes per hour. Expected increase in ad rates may not compensate for the reduced ad inventory. On the positive side, the overhang of these ad cut regulations may speed up the digitisation process as stakeholders will take digitisation more seriously.
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