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The surcharge comes into effect from 16 October. But in the
past, the broadcasters have found it difficult to stand united
on an issue. This time, though, they assert that things will
be different.
Zee
Entertainment Enterprises Ltd (ZEEL) president and revenue
head Joy Chakraborthy explains why broadcasters are justified
in asking for a surcharge. "Viewership has expanded through
new platforms like Tata Sky and Dish TV. Why are we not getting
paid for this? These platforms also carry ads. There are also
some genres that are even cheaper than radio. Clients should
treat us as a business. This is not a case of arm twisting.
I would like to point out that discussions have been going
on with AAAI for a year and a half now. It is not as if we
have suddenly woken up and taken this decision. Also this
surcharge will represent just a partial correction of the
situation."
An
official with the country's leading network says that while
all deals are being affected, there is no sign as of now of
any broadcaster breaking ranks.
"There
have been some cancellations for all channels which shows
that there is unity. Our view is that in the long term we
will benefit. So a certain amount of short term discomfort
is worth it. The risk of losing revenue in the short term
is temporary. But gains for us will be long term. This is
not a case of us versus them (advertisers). It is a case of
the deal being fair for both parties. We are talking with
both clients and agencies," he adds.
An
official of another leading network points out that all genres
have seen a rise in costs in recent times. In the sports genre,
for instance, acquisition prices for cricket have risen substantially.
In the GEC segment costs of say a high quality reality show
have more than doubled. News
channels too have to invest in infrastructure and manpower.
"Our deliveries have improved. There is a mechanism to
ensure measurement of this. Yet advertisers who spend much
more on print are so far reacting unfavourably to what we
feel is a legitimate hike," the official states.
However,
the AAAI (Advertising Agencies Association of India) which
represents the interests of the agencies, is also staying
firm.
Leo
Burnett chairman and CEO Arvind Sharma says that it is illegal
on the part of the IBF to have a unilateral demand. "Cartelisation
in any form is illegal, whether it is for cars, toothpaste
or for television. Negotiations are always done on a channel
to channel basis. What the unilateral demand does is dishonour
the contracts that our clients have with channels. We agree
that costs have risen but at the same time there have also
been price revisions. Our point is that this is not done unilaterally
but bilaterally. We hope that the IBF sees reason and backs
off."
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