GECs
TV ad cap removal may lift industry revenue by just 1-3 per cent
Elara says weak advertiser demand and falling viewership could limit gains for broadcasters
MUMBAI: More ad minutes may not mean more ad money. The removal of the 12-minute-per-hour advertising cap for television channels could give broadcasters more inventory to sell, but the industry’s revenue gain may remain limited to just 1-3 per cent, according to an Elara Securities report.
The report argues that the bigger problem for television is not a shortage of advertising slots, but a shortage of advertiser appetite. With audiences fragmenting across digital platforms, OTT, social media and connected TV, broadcasters may find it difficult to fill additional inventory without putting pressure on advertising rates.
“The key issue is not how much additional inventory broadcasters can offer, but how much advertisers are willing to absorb and at what price,” Elara said.
The regulatory change could have its greatest impact on segments that still have room to add inventory. News channels, which account for around 7-8 per cent of TV advertising expenditure (AdEx), already typically carry 16-18 minutes of advertising per hour, while some regional channels have also operated above the earlier 12-minute limit.
Live sports, which account for around 22-24 per cent of TV AdEx, offer less scope for additional advertising without disrupting the viewing experience. Elara instead sees a larger opportunity in regional general entertainment channels (GECs) and free-to-air channels, which together represent around 25-30 per cent of TV AdEx.
But more shelf space does not automatically mean more sales. Elara estimates that if around 25 per cent of TV AdEx benefits from the regulatory change and delivers 5-10 per cent net incremental advertising revenue after accounting for pricing dilution, the overall industry revenue uplift would still be only around 1-3 per cent.
That modest upside comes against a television advertising market already under pressure. TV AdEx declined at around a 4 per cent CAGR, falling from Rs 313 billion in CY21 to Rs 263 billion in CY25.
The audience base has also been shrinking. Pay-TV households declined at around a 4 per cent CAGR between FY20 and FY25, reaching about 104 million, including a loss of 11 million households in CY25.
Meanwhile, the viewing landscape is shifting towards connected screens. Weekly active connected-TV households rose to more than 40 million, up from around 30 million in 2024, giving advertisers another route to reach television-like audiences without relying solely on traditional linear TV.
Elara said consumers are increasingly moving towards short-form video, OTT platforms, social media and connected TV, while television continues to face challenges around content innovation.
The brokerage summed up the industry’s dilemma bluntly: broadcasters can create additional inventory, but they cannot create advertiser demand unless audiences stabilise and content improves.
At the company level, the regulatory change could still provide a modest earnings boost. Elara estimates that removing the cap could increase FY28 advertising revenue by around 4.5 per cent for Sun TV Network and 2 per cent for Zee Entertainment.
For broadcasters, therefore, the extra advertising minutes could be useful but they are unlikely to rewrite the television industry’s growth story. The cap may be gone, but the bigger countdown is to winning back audiences and convincing advertisers to follow them.
