Television audiences in India may soon find themselves at the receiving end of the battle brewing between broadcasters and advertisers over selling inventory on the high-definition (HD) feeds of their existing channels, bringing to an end the almost ad-free viewing experience they currently enjoy.
The fracas between broadcasters asking to be paid separately for the HD feeds and advertisers who are reluctant to do so has escalated with the Indian Society of Advertisers (ISA) writing to its members not to agree to the demands of broadcasters.
Broadcasters are to soon begin showing commercials on HD channels, according to ISA.
“From the advertisers’ perspective, this is a positive development as we were unable to reach these audiences who had moved from SD (standard definition) feeds to HD feed,” ISA said. “However, we have also got to know that the channels are planning to book ads at different rate for their HD feed versus SD feed.”
ISA regards the HD feed as another distribution channel similar to direct-to-home (DTH) or cable without any difference in programming or show timings.
The association has told its members and their buying agencies not to pay more money for HD channels, said Bharat Patel, chairman of ISA, which has 200 advertisers as members.
“An advertiser is already buying commercial time on the same programme at the same time on standard definition,” he said. “Besides, in most developed markets, broadcasters do not book ads separately for standard and high definition feeds.”
Although broadcasters agree that most of them carry the same content on two feeds, they say that the channels are distributed separately and hence need to be treated thus.
“Star Plus is a separate channel from Star Plus HD and it makes business sense to monetize the two separately,” said Sanjay Gupta, chief operating officer, Star India. “Advertisers also negotiate ad rates on the basis of a channel’s gross rating points in cable and satellite homes without taking the additional digital homes into consideration. So why shouldn’t we leverage the HD platform separately?”
The dispute isn’t bringing much comfort to consumers who are already complaining that ads are not restricted just to the free-to-air standard-definition channels and also carried by those that are pay. HD subscribers are further irked by the prospect of commercials because they currently pay twice the normal rate for the privilege of watching higher-resolution pictures. The HD set-top box costs double the SD box and subscriptions are costlier as well. “If HD channels start airing commercials, then I want a reduction in my channel subscription,” said Ashish Tiwari, a Mumbai resident. Ankul Barar, who lives in Delhi, said, “If broadcasters are going to air ads then, since we pay a premium on these channels, we may as well have just one ad break in one hour —like when we go to watch a film in a cinema hall.”
Shailaja Bajpai in Bangalore is angry at the thought of ads interrupting her viewing on channels she pays more for. Still, she spends most of her time on Discovery HD, which plans to remain ad free. “Discovery HD content is entirely different from programming on Discovery in standard definition. The HD feed is not meant to carry ads,” said Rajiv Bakshi, vice-president, marketing, Discovery Networks Asia-Pacific.
Other channels aren’t planning to keep ads away from HD.
“It was never said that it (HD channel) will be ad free. We were trying to gauge the platform since it was a nascent viewing experience. In fact, it gives marketers a niche, more focused segment to advertise to,” said a senior executive from a leading media house who did not wish to be named.
A cable industry expert and a member of the MSO (multi-sytem operator) Alliance said that pay television follows a mixed model worldwide. It generates revenue from subscription as well as advertising. “In markets where HD has a deeper penetration, channel owners accept advertising,” he added.
Broadcasters don’t charge separately for ads on HD in overseas markets, according to the World Federation of Advertisers lobby group, which said this finding is based on feedback from countries such as the UK, Belgium, Canada, Finland among others. The report followed a query from advertisers in India. Although HD offers access to the right audience, “the reach is not impressive yet,” said Samaresh Parida, director, corporate strategy, at Vodafone Essar, a big spender on television. “And the absence of a measuring system makes it less value for money for us advertisers at this point in time.”
Media experts said broadcasters are also trying to recover their investments in setting up HD feeds, which cost more to transmit as they occupy greater bandwidth. Besides that, HD programming is also more costly to make. It should be up to the channel to decide whether it wants to charge advertisers separately or not, said Ashish Sehgal, network sales head at Zee Entertainment Enterprise Ltd.
“It’s the network’s call if we want to leverage our HD channels. It is a business decision of an individual broadcaster,” he said. “We did not increase our ad rates when direct-to-home viewership grew.”
Star’s Gupta said the company already has clients on board for the HD channel. “Clearly, interested clients are aware of the viewership segment we reach out to through HD.”
Media buyers, who have been advised not to speak to the media on the issue, privately admit that HD channels offer access to viewers with high spending power. “Advertisers cannot choose to ignore HD channels since they reach out to a specific consumer group,” said an executive at a media buying agency requesting anonymity.
Source: Live Mint