What''s the spat over TV ad surcharge?
16 Oct 2007
These advertisers account for over 35 per cent of the Rs7,000 crore spent on television channels annually. The decision comes after differences between broadcasters and advertisers over a demand by channels for a 25 per cent surcharge on spot advertisements - which come in as last-minute bookings to fill in unused slots.
The
controversy began when the Indian Broadcasting Federation (IBF), which represents
the channels, decided to drop all spot advertisements if the advertisers and their
media agencies did not agree to pay the surcharge. Advertising agencies described
it as an "irrational demand". The broadcasters are also believed to
have instructed their advertising-sales team against accepting spot ads on their
channels from any company.
Companies normally book ad space either through
bulk deals or spot bookings. However, news channels sell more spot advertising
than entertainment channels. A news channel typically carries 72 ten-second spots
per hour; 30 to 40 per cent of which are spot ads.
IBF
members and leading entertainment and news networks expect to lose advertising
worth Rs12 crore a day if they drop spot advertisements. Notwithstanding this,
they say that they are firm about the blackout. "We have to take a stand.
For six years we have not increased our rates even when the input costs have escalated,"
said a TV channel representative.
The ban is only applicable to the ads
placed by advertising agencies that are part of AAAI. But this covers most leading
agencies. They say the main problem is that the surcharge issue was decided unilaterally."
Star
India President (ad sales) Paritosh Joshi, however, said that the IBF had been
discussing the issue with AAAI for one-and-a-half years. "It is AAAI that
walked away from the joint working committee arrangement," he said.
