Splitsville

Written by Anushree Chandran | Updated: Nov 20 2012, 09:13am hrs
Broadcast company New Delhi Television Ltd (NDTV) which beams channels such as NDTV Profit, NDTV India and NDTV 24*7 has ended its ad sales union with television network Star India, proving once again that most ad sales marriages in the Indian broadcast sector are short-lived. NDTV had announced in March 2011 that it was entering into an ad sales agreement with Star India for these three channels. An official note released by NDTV said that Uday Shankar, chief executive, Star India and Kevin Vaz, executive vice president, ad sales, Star India, had worked very closely with the network to build an excellent relationship. But as envisioned earlier, NDTV will take its sales and marketing destiny into its own hands and the transition process has already begun. This will ensure close integration with a number of fresh initiatives that NDTV is launching. The network did not specify what these were.

A strong connection with Star will remain including strategic coordination on cross platform sales and marketing. The current Star sales team that was working on the NDTV channels will be transferred to NDTV, the statement added. Working together with Star has been a great experience. We have developed a close professional relationship and plan to retain close ties at a strategic level, Prannoy Roy, executive co-chairperson at NDTV, said. Star Indias Shankar said that he and Roy shared a great relationship. Star and NDTV (and Prannoy and I) share a deep relationship. It was always meant to be a short-term arrangement to enable NDTV to make a successful transition. Now that the team is ready and NDTV wishes to take charge of its own destiny, we are happy to pass on the baton and wish this great brand continued success. said Shankar.

Advertising sales tie-ups are not new to broadcast, though these may be restricted to some of the smaller broadcast firms. Aidem Ventures, an independent media consulting, marketing and ad sales firm was recently appointed as the media represenative of Get Punjabi, a regional channel. It also holds the ad sales mandate for Tamil channel Jaya TV, and GETIT which originally pioneered the concept of Yellow Pages in India and now has transformed into an integrated digital media organisation specialising in local search and classifieds. For the record, before NDTVs mandate was given to Star, it was handled by the same Aidem Ventures.

Smita Jha, leader- entertainment and media practice at PricewaterhouseCoopers India pointed out that ad sales was an integral and core function of television broadcast companies. Most television networks preferred to handle ad sales in their own way, and outsourcing this function was more the exception than the rule. Alliances had come about on the distribution side, but on the ad sales front there were so many differences in genre, content, brand personas, that it was difficult to navigate an ad sales union. For instance, advertisers for Hindi general entertainment channels are so different from advertisers on movies, news or other genres, said Jha. According to Jha, some of the smaller television networks have been, however, known to outsource ad sales to third party companies, in order to become part of a bouquet and achieve greater scale. Such unions were also feasible in print, where differences in content were not as striking and two or three publications could easily team up and offer combo deals to advertisers. With television, an ad sales union between the two top broadcast networks was difficult to envision primarily, because of differences in content and the multitude of channels, she said.

Independent media consultant Paritosh Joshi believes that media agnostic firms like Aidem are more likely to make a success of ad sales unions, than a single broadcaster taking on ad sales responsibilities for third party channels. The future belongs to such firms. In other unions, the channel that has bundled up with the bigger broadcaster will always question whether it is getting a fair price from this union. The bigger broadcaster will also wonder why it has taken on this mandate at all since it already has a huge network. It will also ask itself if the money is fairly earned by the smaller channel since it is the weight of the larger network that drives the sales. Consequently, both parties are unhappy. It takes a lot of trust from both sides to take such a union forward, said Joshi. Joshi added that companies such as Aidem are better placed to handle third party ad sales because they were media agnostic and could aggregate across media platforms. Personally, I feel that the future is definitely bright for media agnostic aggregators, he added.

In its quarterly earnings released on November 1, 2012, NDTV disclosed that it had reduced its losses from R22 crore to R15 crore. In particular, NDTV 24*7s profitability has doubled on the back of robust growth in revenues. The groups total revenues were estimated at R108 crore.