By ASHWIN PINTO
Indiantelevision.com Team

(16 October 2007 1:30 pm)

MUMBAI: The inevitable has happened. With neither broadcasters nor advertisers refusing to budge on the surcharge issue, a large number of ads have gone off the channels including Star, Zee, Sony.

Speaking on behalf of the Indian Broadcaster Foundation (IBF) Star president ad sales and distribution Paritosh Joshi says that to cover up, broadcasters are airing public service advertisements (PSAs), channel promo spots and ads of clients not affiliated with AAAI.

"TV producers will be the group that are pleased as their content will go on for longer. We now hope that the advertisers and agencies will take this issue more seriously. My point is that their focus has been more on the form of the issue and not on the substance.

"By form I mean that they are simply focussing on the unilateral part. I have not yet heard a debate on their side on the substance of our case which is that costs have gone up, channel deliveries have gone up and so our price should also go up.

"We have not closed the door on having sensible discussions with agencies and their clients. However for that to happen they must listen to our case instead of just dismissing it outright. I would also like to state that this is not a case of us acting in a belligerent manner. It is a question of industry survival. We will wait for them to consider our case."

He adds that the surcharge will amount to less than one per cent of the topline of FMCG companies like HUL. The average cost of a 30 second spot is Rs 4500. He says, "All we are asking is that this go up to Rs 5700. Mind you there are channels that charge much less and the average cost goes down when you take Star, Zee and Sony out of the equation.

"The other smaller channels too have costs like infrastructure, manpower. Even if say on a local news channel a spot gets a rating of 0.01 that still means that your spot has been seen by 400,000 viewers given that there are 70 million C&S homes. What is the cost that the advertiser is paying per viewer? I know of channels that charge Rs 200-250 per 10 second spot."

Zee Entertainment Enterprises Ltd (Zeel) president and revenue head Joy Chakraborthy says that it was important for broadcasters to put up a united front. "None of us have acted in an opportunistic manner by backing out. While we have a strong relationship with clients that have grown as the channel has done well over the past year we at Zee felt that it was important that the industry came together."

Meanwhile, the Indian Society of Advertisers is scheduled to meet today evening, where over 50 major advertisers will discuss the next course of action.