Broadcasters on Thursday buckled under pressure from the advertisers and rolled back its earlier decision to charge 25% surcharge on all existing advertisement deals. The Indian Broadcasting Foundation (IBF) on Wednesday announced that the surcharge will not be put into effect immediately and will not affect existing contracts.
“We have no desire to jeopardize or sabotage the marketing plans of the advertiser community, and have decided to unanimously advise all members to roll back the application of the 25% surcharge on existing deals,” a statement from the foundation said.
?IBF is shortly calling an extraordinary general meeting to evolve a consensus approach to address the issue of fair value for advertising inventory for advertising inventory,? the statement added. Sources said that this would be after Diwali.
After the IBF’s announcement early last week, many of the advertisers decided to take on the IBF and refuse to agree to the new rates. Meanwhile, the Indian Society of Advertisers (ISA) are also meeting on Wednesday to chalk out their action plans.
According to sources within the IBF, the broadcasters did not want to jeopardise their long standing relationships with the advertisers or get into any legal hassles. IBF members who attended the meeting on Wednesday included Raj Nayak of NDTV, Sony’s Rohit Gupta, Jawahar Goel of ZEE , Uday Shankar of Star, B Saikumar (TV 18), and also representatives from Sahara, Times Broadcast and National Geographic Channel, among others.
Another rationale behind IBF’s move was the festive season during which a black out could seriously affect the marketing strategies of the advertisers. ?Amost all the advertisements were blacked out yesterday and only BBC and Disney carried any ads as they were not willing to jeopardize their internatinal relationships,? the source added.
On IBF’s earlier stand on hiking ad rates, a spokesperson said, ?Channels and networks of every size and stripe have communicated their frustration with the unfairly low pricing imposed on their advertising inventory as a result of the indifferent attitude of and monopolistic consolidation tendencies among AAAI member agencies.?
Star India COO Uday Shankar added, ?While we are sure that we will go ahead with the decision to levy this surcharge, we are just bringing in a correction in the manner in which we execute this, and hence we have decided to honour existing contracts.?