India:Advertising limit leaves broadcasters in difficult spot

The Telecom Regulatory Authority of India's ruling of restricting ad inventory to just 12 minutes for every hour of programming is giving broadcasters sleepless nights. With digitisation just getting under way, broadcasters claim that robust subscription revenue is still a far cry, forcing them to increase advertising rates by a steep 20 to 30 per cent.

The advertising community is hardly likely to be happy about this. "Broadcasters can expect advertisers to come on board at such steep prices only if they offer reach that is much better than what they currently offer - their ratings have to be substantially higher to justify this price hike," says Mayank Shah, Group Product Manager, Parle Products.

The Marketing Head of yet another Mumbai-based consumer goods maker says his company already pays around Rs 2 lakh for a 10-second spot on Star Plus or Colors, and adds that paying another 20 to 30 per cent more would be prohibitive. "We will have to re-think our TV spends," he says.