A cap on the limit of advertising time on television has polarised the views of the broadcasters and viewers. After a tug of war for quite some time, the Indian Broadcasters Federation (IBF) reluctantly agreed to the guidelines of the ministry of information and broadcasting (MIB) in the last week of May.

According to the new rule, by October, all channels will have to place a cap of 12 minutes per hour on the time of television advertisements. Although the rule has been around for six years, it was only in the end of May, after the agreement with the IBF was rolled out, that the ministry could implement it.

According to the agreement between the two bodies, channels will bring down the advertising slot in phases. From July 1, news channels have a cap of maximum 20 advertising minutes per hour, while the entertainment channels have a cap 16 minutes. From October, all channels will bring down the limit to 12 minutes of advertising per hour.

The initial difference in the minutes has been given due to the nature of the channels. According to Shailesh Shah, general secretary, IBF, the inventory costs that the news channels use are more, and so they will face a bigger problem while negotiating the contract. In comparison, the entertainment channels will have it a little easier.

The rule will hurt the smaller channels more, says Shah. “We are already complying with the rule. On an average, we show advertisements for 11.14 minutes,” he says. “Of course, there are certain slots, like the prime-time hours, where the advertising time exceeds this. But then there are those watershed hours in the night where there is hardly any advertising. So if we take an average, it comes to about 11 minutes.”

Sources in the federation say the telecom regulatory authority of India (TRAI) has decided to monitor this transition. All channels will have to send a monthly report to the regulatory body, stating the total number of television advertisements they had telecast. This process will be starting by the end of June.

Channels will have to show their day-to-day telecast plan, including the slots for advertisements. This will bring in a lot of transparency to the whole system.
Although limiting the time slots for commercials would benefit the viewers, both the broadcasters and the advertising fraternity are wary of the move. “The consumers will get to see more uninterrupted programmes. But it will hurt us,” says Shah.

The obvious reference is to the revenue. The immediate impact for the channels will be that their revenues will go down. Shah agrees with this but adds that in the long term, the rates of advertising will be decided by the market forces.

“The number of advertisements is going up. And the need for commercials is also going up. Over time, when the slots are limited, the rates will also go up. The ideal time for this rule to have come in would have been after the digitisation process had been completed. That is when the broadcasters would actually receive the digitisation rates. Right now, we have reluctantly agreed to the rule.”

The I&B ministry’s decision to limit the advertisement time will affect the advertisers too. In fact, it is a catch-22 situation for both the broadcasters and advertisers. On the one hand, while the broadcasters are worried about their revenue, the advertisers are fretting about the rates for the commercials, which, they say, are bound to go up.

“It is a difficult situation,” explains Aprajita Virmani, business group head, Maxus (owned by Group M), a leading advertising agency. “When you get a limited space for commercials, for the agency which is buying that space the rates will go up. Let’s say, I have 12 advertisers vying for a slot and I only have space for six, then for the channels, it will be an open market. To be fair to the channels, the money that they used to earn in 30 minutes, now they will have to earn in 10 minutes. Ultimately, the demand and supply will come into play.

“The channels are reducing the minutes every month. The rates have started going up already. But it is a discussion that has started. We will see a clear picture in two months.”

Since it is not a marginal cut in the slots for commercials, the brand managers and advertising agencies will now have to grapple with the task of making ads more intense than ever. Besides, they will have to look for other mediums than TV.

Nivedita Sarkar, brand manager, Idea Cellular Ltd (Delhi & Haryana), adds, “The limit to advertising time on air definitely poses a challenge for all brands and the advertising fraternity, which is already upset with the limited space. Brands will now have to make more effective advertisements in order to grab the customers’ mind space. Having said that, it is also a huge opportunity to look out for and develop other means of communication and advertising.”

According to experts, the best alternative to television is the mobile phones platform. That also gives advertisers an opportunity to net in youth. Virmani says, “We have over-dependence on the television. We need some rationalising. Advertisers will be shifting money to mobiles as a platform. That is where they will catch all the college-goers.”

Virmani explains, “For the consumers, this limitation will be brilliant. A 12-minute cap will mean giving precedence to quality over quantity. It will be a clutter-free zone for the audience which in turn will make the audience more receptive to the commercials. But for us, it will mean better advertising. In a way, the bombarding will stop.”

However, there is even a larger debate. Will the limitation on advertising mean better content for the viewers? The view on this is divided. A section says that it will result in a decline in the revenue, forcing the channels to spend less on the content, which will result in poor quality of the programmes. Another, more optimistic, section says that the channels will now be forced to give better content to hold on to the viewers’ attention.

We’ll keep our fingers crossed till October.