Impact Of India’s TV Advertising Limits On Digital & TV; Digital First

A short-sighted Telecom Regulatory Authority of India, on the 22nd of March, notifiedsignificant limits on advertisements on television on duration of advertisement in TV channels_Final:

- Only 12 minutes of advertising on a broadcast channel television in an hour, including house ads. Any shortfall in advertisements may not be carried over.
- Time gap between ad breaks and programming should be at least 15 minutes, except if it is a live sporting event. In case it’s a film being broadcasted, the break will be 30 minutes
- During the live broadcast of a sporting event, ads only in breaks
- Only full screen advertising allowed. No popups, part screen ads or drop down advertisements
- Audio level of TV ads shall not be higher than that on the Channel

Implications for TV:
- The end of house ads. Given that there isn’t enough money to be made from advertising house ads, channels will look to use every second of those 12 minutes for advertising.
- Increase in TV advertising rates: fewer ad slots, and with supply of advertising air-time reduced, the rates will increase.
- Shorter commercials: we just might see the 30 second commercial end, and more advertisers looking to 15 second commercials
- In case of live not-sporting events, a possibility of increase in on screen advertising and branding for advertisers, perhaps with instructions to broadcasters to focus on ads at the venue more frequently. The backdrops will have more advertising, to compensate for the lack of “innovations” (drop-down ads, part screen ads)
- Possibly a decrease in carriage rates for cable and DTH companies, if broadcasting revenues decline.
- Equitable distribution of advertising revenues across channels, because prime time is prime time, and the supply of advertising minutes at prime time has been limited by this regulation.

Impact on digital

- We will see more ads that say “Watch the rest of the ad on YouTube”
- A decrease in supply of advertising time on TV might lead to an increase in digital budgets: a situation where more and more FMCG advertisers look at the Internet, Mobile, OOH and Radio.
- Increase in focus from Channels on the Internet as a mode of delivery, live, since these limits will not apply there, especially using overlay ads to monetize. For this, however, broadband speeds and reach will have to improve, and become more reliable. And Airtel will have to dispense with their stupid Fair Usage Policy.
- More business for tools like Shazam, which integrate TV and the web. Airtel has already experimented with Shazam.