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Mumbai: Advertisers
have threatened to boycott channels following the Indian Broadcasting Foundation''s
(IBF) proposal to levy a 25-per cent surcharge on advertisements citing rising
input costs. IBF
is an industry body representing almost all broadcast networks within the country,
including the biggest broadcasters Zee, Star, Sony, Network18 and NDTV. According
to industry sources, the leaders in ad-spending, which include Hindustan Unilever
(HUL), Procter & Gamble (P&G), Reliance ADAG, Bharti Airtel, Maruti Suzuki,
Coca-Cola, PepsiCo, and General Motors are reportedly mulling a retaliatory halt
to their commercials, though no confirmations are forthcoming. Industry
sources also indicate that media planners and buying agencies are engaged in mediation
between the warring advertisers and broadcasters. Media buying agencies also indicate
the large presence of rumours in this regard, though both media agencies and advertisers
have received correspondence from TV channels that want to implement the surcharge
starting 16 October. IBF
sources indicate that the rise in prices is forced by substantially higher input
costs, which include the cost of programming and transportation, artiste fees,
costs pertaining to procuring news, movies, and so on. According
to sources in the broadcasting business, while the number of Cable and Satellite
(C&S) homes has gone up from 42 million to about 62 million, extreme competition
and clutter in broadcasting space over the last three years has seen ad rates
on TV channels plummet by 20-30 per cent, directly impacting channels'' bottom
lines. Sources
point out that the 25 per cent surcharge is on MRP, and not on the actual rate
card. That would mean that, if somebody has been paying, for example, Rs100 for
a 10 second spot, the surcharge would be applicable on that rate, and not the
pricing given in rate card. The actual rate card is at least 40 per cent higher
than MRP. Contractual
obligations between advertisers and broadcasters are also seen as a hurdle to
the implementation of the surcharge at short notice. It
could well be that, starting 16 October; you may just as well be able to see your
favourite TV programmes, sans commercial breaks.
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