Broadcasters and their associations have questioned the right of the Telecom Regulatory Authority of India (TRAI) to frame rules restricting the number and duration of advertisements on television.
In multiple responses, channels and associations have pointed out that the telecom regulator derives its mandate to regulate the media sector only from a notification by the Information and Broadcasting ministry in eight years ago.
“TRAI does not have the authority to regulate advertisements, at best TRAI may make recommendations specifically in relation to parameters for maximum time durations for advertisements…
“Any such recommendation would have to be made to the Ministry of Communication and IT since it is this ministry that issued the 2004 notification by which TRAI is purportedly drawing its power to recommend on issues pertaining to advertising minutage,” India’s biggest broadcasting association, the Indian Broadcasting Federation said.
The Federation, which represents the interests of nearly all the major channel owners except the news channels, pointed out that the current limits on advertisements in channels have been set by an Act of the Parliament, and the TRAI has no rights to change the stipulations.
TRAI had, two weeks ago, suggested halving the advertisement time on pay channels, pointing out that the industry is on the verge of a radical change in the coming weeks.
India will embark on a one-and-a-half-year long transition from analogue transmission to digital next month.
TRAI pointed out that digitization will make it possible for channel owners to increase their customer subscription revenue by several times and as a result, they will be able to cut down their reliance on advertisements as their main source of revenue.
So far, broadcasters have been unable to get most of the subscription revenues paid by consumers as they have been unable to ascertain the exact number of audience for each channel. It was also not possible for consumers to pick and choose which channel to subscribe to, due to the analogue nature of the transmission.
As such, most of the revenue was kept by the cable networks, who also routinely objected to efforts by channel owners to raise subscription rates for all the customers of cable networks at one go.
However, channels and broadcasters were having none of the new suggestions.
“Most news channels are currently struggling to cut losses, let alone make profits. In such an environment, any attempt by any regulator to further reduce revenues by reducing inventory will cause many small players to shut shop and (lead to) loss of jobs on a mass scale,” the News Broadcasters’ Association, which represents the interests of news channels, said.
The Indian Broadcasting Federation also pointed out that things that can be managed by market forces should be not be the subject of regulation.
“Market forces ensure that a broadcaster takes into account the extent to which increasing the number of advertisements shown will cause viewers to switch off or switch channels, and this decision also impacts the amount of revenue raised per viewer from the advertisers. No broadcaster will therefore increase the number of advertisements beyond a point that will cause viewers to switch off or move to another programme,” it pointed out.