India: Four leading entertainment TV channels hike ad rates by 20-30 per cent

With the Telecom Regulatory Authority of India (TRAI) holding firm on its recent cap that limits the amount of advertising TV channels can carry to 12 minutes per hour, the four leading general entertainment channels (GECs) have decided to increase their advertising rates by 20-30%.

Raj Nayak, CEO of Colors, which will raise its rates by almost 30%, said, "As a broadcaster, we have still not seen the full impact of digitisation in the form of either a fair share of reduction in carriage fees or subscription revenues. Given that we are a responsible broadcaster and intend to follow the guidelines set by the regulator, we believe that to stay on course and meet revenue objectives, we are left with no option but to increase the ad rates."

Nayak adds that in the current scenario there is already a shortage of ad inventory on GEC channels, and he sees changes in the supply-demand dynamic ahead. One problem that broadcasters might face, points out Manjit Singh, CEO of Sony, is that most channels have signed long-term contracts with advertisers. "While we are evaluating how much we will increase, those whose contracts are made on low budgets will not get renewed," he said.