Trai's restrictions on TV ads are intolerable
In a set of misguided restrictions, the Telecom Regulatory Authority of India, or Trai, has ordered all television channels to ensure that advertisements do not exceed 12 minutes in any given hour. These 12 minutes cannot be carried over onto later hours. Advertisements should be at least 15 minutes apart — except on movie channels, when they should be at least 30 minutes apart. There are a number of other, related proscriptions — banning drop-down advertisements, for example, and saying the average volume level of advertisements should not be greater than that of the programme they are sponsoring. Broadcasters, understandably, are up in arms: they have claimed this could impact their advertising revenues by as much as 40 per cent in some cases. Spot rates for television advertising have already fallen considerably, reflecting the weak economy and competition among channels. In any case, the regulators have needlessly capped the subscription price of a channel at Rs 10. If both forms of revenue are being controlled, naturally the impact on profitability – and on quality – is obvious. Yet the degree to which television is rendered less profitable is not the central point. The central point is: in a free economy and polity, from where does a telecom regulator feel it derives the right to tell a broadcaster what it should broadcast?
Even if a channel is 100 per cent advertising, it should be allowed to broadcast. It is not a regulatory matter. Instead, given that such channels are not likely to get too many subscribers, the free market will work its usual magic. From telling a broadcaster how many advertisements to broadcast, it is a short step to telling newspapers how many advertisements to publish. If at all anyone can claim the ability to make such decisions, it is at the level of the executive or the legislature — which, at least, are accountable. Even then, they are an intolerable intrusion on basic freedoms. Regulators cannot presume to overturn crucial press freedoms by fiat. This is also a poster case for misplaced zeal. If formal advertising breaks are limited in size, is there any doubt that broadcasters will find ways around it? Will they not have more product placements in their programming, for example? Will Trai then step in to regulate exactly how many times a product is mentioned in regular programming and how? Nor will restricting the length of advertisement breaks arbitrarily make for a necessarily more comfortable viewing experience. Channels will now forcibly break into programming if an hour is close to being completed, making for an even more jerky, stop-motion viewing experience.
There is a sense among many regulators, and in the executive more generally, that their job is to make the consumer more comfortable by fiat. An increase in regulatory humility, and an understanding of the limits of their power and effectiveness, would be more appropriate. If television viewers find that a channel is completely unwatchable because of too many advertisements, they will not watch it. Or they will invest in a digital video recorder, and skip the advertisements. Or they will watch pirated versions on the internet. Trai’s decision reveals a basic distrust of free choice by consumers, and a chilling contempt for the freedom to publish.
Foreign institutional investors (FIIs) were net sellers of Rs 665.76 crore (provisional) today, according to data released by BSE.
Analysts expect earnings surprises from consumer discretionary, financial and industrial sectors
Street worried on impact of lower oil prices; analysts say these can be partly offset by de-leveraging gains