NEW DELHI: Indian TV news channels are already being adversely affected by October's impending advertising cap, as revenues and ad rates have fallen during their preparations for a limit of 12 minutes of advertising an hour.
Since the beginning of July, around 100 news channels have cut their commercial airtime from 25-30 minutes an hour to 20 minutes and executives are now reporting revenue down by 15-20%.
"The situation for news channels is indeed very grave. This [the cap] will reduce the saleable inventory to less than half of the current levels for news channels," Ashok Venkatramani, chief executive of Media Content and Communications Services, told Livemint.
The vice chairman of NDTV Group was even more blunt. "From 1st of October, the situation may be disastrous," said KVL Narayan Rao, adding that while inventory would be halved, ad rates could not be doubled.
The past two quarters have seen a 20% fall in advertising across news channels on some estimates. The reasons include the general economic slowdown, which has affected the financial services, real estate and auto companies that typically advertise on news channels, and the diversion of advertising to sports channels during the Indian Premier League and Champions Trophy cricketing events.
Advertising executives also said the viewing market share of news channels had almost halved in recent months, from 7% to 4%, and suggested that in the wake of digitisation fewer households were opting for news channels.
Venkatramani did not think decline was so sharp and noted that digitisation "is throwing up numbers which are fluctuating wildly and are clearly erroneous", raising once again the ongoing issue of audience ratings which has seen broadcasters and measurement company locked in a standoff.
Whatever the actual figures, news channels are no longer as well regarded by agencies.
"A few years ago, news channels were the darling of media planners for the kind of reach they delivered, but their advantage has worn off," remarked Basabdutta Chowdhury, chief executive of Platinum Media, part of the Madison World integrated communications agency.
"They are not as efficient and there has hardly been any incremental reach," he added.
Data sourced from Livemint; additional content by Warc staff