Government asks TRAI to reconsider decision on advertisement cap
With Network 18, one of India’s largest broadcasters, engaged in a downsizing exercise, and a general gloom in the news television industry, the government has expressed concern about the larger ‘systemic’ issues that afflict the broadcasting space in India, leading to a crisis in some of the companies. It has also urged the regulator, the Telecom Regulatory Authority of India (TRAI), to reconsider its decision to enforce a rule prescribing the maximum ad-time per hour on channels.
Speaking to The Hindu, Minister for Information and Broadcasting (I&B), Manish Tewari, explained how the government saw the emerging situation in the television space.
‘Since 1991, there has been a proliferation of channels, with 852 licences given out. After a recent exercise by the Ministry to see if they are meeting statutory norms, there are 798 channels, out of which over 400 are news channels.”
This, Mr. Tewari contended, ensured ‘pluralism’ but had also led to ‘fragmentation of market space.’ And in this crowded market, all networks had an almost wholly advertisement-dependent model. “The government has stayed the course on digitisation because I wanted to correct the skewed revenue model.” This process, it was hoped, would lead to direct revenues from subscribers removing intermediaries, and reduce carriage fees which broadcasters had to pay up. But this has not happened to the extent hoped yet.
The Minister said: “This is the broad context. The full benefits of digitisation are yet to manifest themselves. In some States like Punjab and Tamil Nadu, there are cross-holdings between the content-provider and carriers, which squeezes others out of the market. There is volatility in the economy. And the regulator has imposed a cap on advertisements. These are systemic issues that need to be addressed.”
In what will come as heartening news to the TV channels, the government has appealed to the TRAI to reconsider its decision to enforce the 12 minute-per hour ad-cap, which was a part of the licensing agreement.
Mr. Tewari said, “No one is saying that the statutory code should be violated. But it is also true that between 2006 and 2013, no one did anything about it. While the general entertainment channels are happy to implement the decision, news channels are very worried about its implications.” He said the role of the regulator was to ‘ensure a stable business and economic environment.’ “TRAI should introspect and reconsider its current stance till carriage fees don’t mitigate further and subscriber revenue doesn’t stabilise for the sake of the healthy growth of the industry.”
The government believes that instead of enforcing this rule in news channels from October 1, as TRAI has stipulated right now, it should be enforced concurrently with the final phase of digitisation, which concludes at the end of 2014.