Starting Monday, the worst fears of television channels might turn true. Media planners feel that given the ongoing cine workers? strike, which has led to general entertainment channels (GEC) telecasting repeat programmes, advertisers may now be compelled to either cancel their ad spots on the channels or ask for compensation.
In the current standoff, Advertising Agencies Association of India (AAAI) had written to key advertisers requesting them to stand by the broadcasters and give them an interim period of 10 days to resolve the matter, which is ending Tuesday. Media planners feel that if the dispute is not resolved within this time, advertisers will ask for a rebate from the broadcasters.
Every broadcaster in the country today is dependant on revenues from advertising. According to a PricewaterhouseCoopers report on the Indian media & entertainment industry, the Indian television industry, estimated at Rs 22,600 crore, is projected to grow to Rs 60,000 by 2012 on the back of advertising revenues, especially in GECs. Broadcasters have always feared that the workers? strike would eventually impact channel revenues substantially.
A senior official in Star Group India, who didn?t want to be named, said, ?So far, none of the Star channels have faced the heat. However, we fear that the pressure will now mount on us.? He also said that advertisers may not go to the extent of cancelling spots but may ask channels to give complimentary on-air sponsorship.
CD Mitra, president, Mudra MAX, said, ?Every broadcaster has both cancellation and non-cancellation clauses in their agreements with advertisers, which, under normal circumstances, no one really follows.? However, Mitra added that there is no clarity on whether advertisers will cancel spots or start renegotiating on the rates with channels.
Members of the Federation of Western India Cine Employees (FWICE) went on strike from the first week of October over low wages paid by the producers. In turn, television producers? association called for a strike and demanded 15-20% higher rates from the broadcasters. Since broadcasters did not agree to pay, worker unions disrupted shooting.
In a spot
? Advertisers may cancel their ad spots or ask for compensation
? AAAI had given broadcasters time till Tuesday to resolve crisis
? Media & ent industry slated to touch Rs 60,000 crore by 2012