This one is a classic case of misguided good intentions. The Telecom Regulatory Authority of India (Trai) released a consultation paper last week. Trai, which also doubles as the broadcast regulator, has sought to address “issues relating to advertising on TV channels”. Among other things, the paper seeks to reduce the advertising time allowed on pay channels from 12 to six minutes per hour. It also suggests reducing the number and kind of scrollers, pop-ups and so on that you see on your screen.
The idea, the paper says, is to protect “consumer interest”. Even if we don’t get into the debate on Trai’s mandate, which is to regulate carriage and not content, there is one big problem with the paper — its timing.
The reason television advertising is getting out of hand is that pay revenues are not delivering. The ministry of information and broadcasting is trying to fix that with digitisation, now mandatory thanks to an amendment to the Cable Act late last year. By December 2014 all of India’s 142 million TV homes should be digital and addressable. That means there will be 100 per cent transparency and (hopefully) revenue sharing. This, in turn, means that broadcasters’ pay revenues could become 40-50 per cent of top line, instead of the current 10-15 per cent.
Once that happens, broadcasters themselves will reduce the rubber band-like use of advertising time. They, more than Trai, know that subscribers are very irritated with the amount and nature of advertising on TV. You can see that on channels advertising the “one-break movie” or telling you that this is a “two-minute break”. Broadcasters also know that reducing inventory will help increase ad rates, which have been falling.
So why not wait till, say, March 2016? By then full digitisation would have been operational for one financial year. Then all the controls on ad breaks, ad time and so on would make sense.
India is the world’s second-largest TV market by volume. But one of the least profitable ones. By raising the bogey of controlling ad time now, Trai is taking the discussion away from the reasons behind it — and from all the work that is going into digitisation.
All you have to do is look at price regulation to see how a well-intentioned act in the “consumer interest” can go wrong. In TV, price regulation has helped the whole carriage fee phenomenon and put DTH, the only form of digital TV that works, five years behind on breaking even. And it has put off big investors in cable. Most of them want the freedom to set prices. The fact is that if it wasn’t for price regulation, digitisation would probably have happened long ago.
Television, unlike foodgrain, is not an essential commodity. There is no need to control its prices or the amount of revenue a company makes through advertising. What is needed is a policy framework within which these companies can operate and be controlled, if need be. An independent-of-the-government media regulator is the ideal way of creating that framework. The decision on ad time, breaks and so on should come from an FCC (Federal Communications Commission, US) or Ofcom kind of body. For an Indian example, look at the Securities and Exchange Board of India. It effectively regulates financial markets, which are more complex than the media.
If the media industry and the ministry set their minds to it, setting up such a body is possible. And if this can happen before digitisation, it would be great. That way there will be a mechanism in place to deal with all regulatory challenges, not just the ad break issue, once all homes are addressable.
Lastly, you could argue that consumers have a right to demand fewer ads and shorter ad breaks. Sure they do. But are those rights only for TV viewers? What about those pesky ads on the internet? And what about those big ones in magazines or on the front pages of newspapers? Should someone be coming out with norms on those? If they can’t be touched, why television?
The point is media and entertainment products are something we consume of our own volition. Nobody forces us to watch a show or a film. The remote control of our TV sets is always in our hands. For now, it is the best way to tell broadcasters to lay off.