The Telecom Regulatory Authority of India's (TRAI) proposal to cut the ad duration to half on pay television channels has raised a storm in the media industry.
While a discussion paper floated by the regulator calls for cap on ad duration at six minutes per hour to offer clutter-free viewing for audiences, industry stakeholders have raised questions over the viability of operating under such regulations.
According to Kevin Vas, president (ad sales, Star India) it would directly impact revenues as advertising time would be halved. The current regulations allow airing of 12 minutes of advertisements for every hour of programming.
At present 163 pay TV channels are operating in the country which account for a lion's share of Rs11,600 crore made in ad revenues in the television industry, according to consultancy KPMG. Subscription revenues contribute another Rs21,300 crore, however, due to "leakages" in the broadcasting system, pay channels depend more on advertising than subscription revenues. No wonder then they are not happy with the TRAI's proposal, according to analysts.
The regulator, however argues that with the government setting the ball rolling on digitisation of the cable and satellite industry by December 2014, pay channels need not depend as much on advertising revenues as they did now.
According to a report tabled by Media Partners Asia, dependence on advertising by pay TV channels had reduced 71.97 per cent in 2011 from 76.33 per cent in 2007. Channel heads, though offer a different perspective.