Broadcasters to contest Trai charge on ad limit in court

TRAI was to take broadcasters to court over violation of the 12-minute ad cap mandate

Television channels plan to contest the decision of the Telecom Regulatory Authority of India (Trai) to take them to court for breaching its direction on number of minutes an hour allowed for advertisements.

The regulatory body has named 16 channels as defaulting on either or both of the following grounds — exceeding the ad limit and providing incomplete or false data regarding the air time of content and advertising. The case has been filed at a lower court in Delhi and is under consideration for whether or not to issue a notice.

While the entire list of 16 channels isn’t available, among those named are Zee News, NDTV Good Times and Aaj Tak. The channels are yet to receive a formal communication  from the court or Trai, say sources.

“We have been compliant despite the reduced ad inventory affecting our revenues. They have decided to take the matter to court without so much as a warning, official or unofficial,” says an executive from a broadcast network, on condition of anonymity. He says until the broadcasters know the charge, it is difficult to chart a definite plan of action.

Trai had in May 2012 directed broadcasters to limit the ad air time on their channels to 12 minutes in every hour of programming. Of these, 10 minutes could be used for commercial advertising and the rest for promoting the channel and/or its shows.

This met with a lot of resistance from the broadcasting community as it depends heavily on ad revenue — digitisation is yet to set in fully and subscription revenues are still a small part of the total revenue for most networks. In such a scenario, reducing ad inventories drastically would mean a huge loss in ad revenue — it is not possible to raise ad rates, especially in an economic downturn.