Broadcasters plan 10-30% hike in ad rates
ADVERTISERS may have to brace themselves for an across-the-board rate hike in TV advertising very soon. Major broadcasters like Star, Zee and Sony say they are banking on the growth in satellite TV audiences to justify a 10-30% hike in rates. But advertisers and media planners aren’t quite willing to buy the logic as it means changing over from industry-wide practice of relying on rates based on specific programme viewership. According to NRS 2006 data published in September last year, average weekly viewership of satellite TV across the country grew from 207 million individuals in 2005 to 230 million individuals in 2006. The number of cable and satellite (C&S) homes showed an increase of 12% from 61 million to 68 million in 2006, even as total TV penetration touched 112 million, a growth of 3.2 % over last year. Broadcasters reckon that this growth in the C&S market effectively translates into an increase in reach, and have begun reworking rates for all contracts that are up for renewal with advertisers. “Star will definitely be going in for a revision of rates. We are looking at a 15-20% hike, considering the audience size has grown, and the fact that there is more headroom for growth for Hindi speaking markets,’’ said Paritosh Joshi, president, advertising sales and distribution, Star India. Rohit Gupta, executive VP (sales and revenue management), Sony Entertainment Television, said, “We are already in the process of correction of rates. It has been long pending, and now there is a clear justification for a rate increase, which cannot be termed as unfair.” Joy Chakraborty, network sales head, Zee Network, said that a 10-30% rate hike has already been effected from all deals, depending on client spending patterns, effective April 1. There’s an another reason why broadcasters are confident of pulling off a rate hike: India’s World Cup debacle has sent cricket ratings plummeting and suddenly made other genres of entertainment a lot more attractive. Besides, early this year, Television Audience Measurement (TAM) expanded its panel from 4,800 peoplemeters to 7,000. With credible viewership data now available for 77 more towns, broadcasters believe they are justified in demanding a rate hike. But media planners, who work on the basis of cost per rating point (CPRP) method, instead of cost per thousand (CPT) currency, clearly have other ideas. “If we followed CPT, affecting a rate hike on the increased TV household would have been no problem at all, but given the fact that the CPRP system still continues, it will not be a very easy task,” said a media planner. “The Indian Broadcasting Federation (IBF) and the Advertising Agency Association of India (AAAI) are having continuous meetings on how to take the CPT currency forward, and once it is officially stipulated, we will see the transition into the CPT mode,’’ said Mr Chakraborty. However, by all accounts, this will be fought tooth and nail by media agencies and advertisers.
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