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On The Delhi High Court’s Interim Injunction On TV Ad Caps

The Delhi High Court yesterday granted an interim injunction, asking the Telecom Regulatory Authority of India to not take any action against broadcasters, if they exceed the ad-cap enforced by the regulator, while at the same time, asking the broadcasters to maintain records of the amount of airtime on each channel on a weekly basis, as per reports from Indiantelevision.com and afaqs. Strangely enough, Afaqs is calling this “god-sent” for broadcasters, even though this is par for course in most cases that we’ve covered: the court allows the appellant (in this case, the broadcasters) temporary relief and gets them to maintain accounts, and sets a date for the next hearing. This has no bearing on the final judgment, and the accounts maintained might be used to finalize damages if the appellants lose the case. So, our suggestion to our readers is to not read into this as a victory for broadcasters, and any respite, is temporary, until the High Court rules on this.

According to IndianTelevision.com, the date of the next hearing is 13 March 2014.

The broadcasters had filed a case in the High Court following the dismissal last week, of their appeal at the Telecom Dispute Settlement Appellate Tribunal (TDSAT) on jurisdictional grounds, after the Supreme Court had struck down the TDSAT’s powers to adjudicate against TRAI regulations.

The TRAI regulations significantly restrict advertising on television, which, if imposed, will accelerate the growth of digital advertising in India, with video advertising, in particular, benefiting from this move. The TRAI regulations:

–  Maximum Duration Limit of Advertisements: 12 minutes per clock hour, but with the leftover advertisement duration (if any) carried over to the next hour. This is applicable to advertising spots, info-commercials and house inventory from the broadcaster.

– Advertisement breaks only during breaks for live sporting events: half time in football or hockey match, lunch/ drinks break an change of overs  in cricket matches, game/set change in case of lawn tennis etc

– No Partial Advertisements: Only full screen ads allowed. This would certainly come as a blow to sports broadcasters who sell screen overlays as part of ad inventory.
– Audio Level of Advertisements: broadcasters should ensure that the audio level of advertisements should not be higher than the audio level of the programmes.
– Broadcasters to Submit Ad Details: All broadcasters have to submit the details of advertisements carried in their channel in the format specified by TRAI, within 15 days from the end of a quarter.

Where We Stand

We’re opposed to this regulation, because it significantly restricts the monetization of media businesses. We believe that consumers have the right to choose whether to watch content on TV, and the price they pay, is watching the ads. It’s questionable, whether this actually benefits the consumer, since a decline in advertising revenues (even if somewhat compensated by an increase in rates) will lead to an increase in subscription cost, and to broadcasters looking at subscription as a source of revenue.

We don’t quite understand why the TRAI is limiting innovations on Television: we hope a situation doesn’t arise, wherein broadcasters look at digital modes of delivery for TV, and the TRAI considers limiting advertising on the Internet.

For the TRAI to get into determining ad caps of TV is worrying, and it essentially opens the door for further regulation of advertising. We’d like to remind you of something what the counsel for TRAI said in court, on being asked if it can direct Google on the duration and number of ads it can run: “I am the regulator and I will decide who, when and how much to regulate”.

P.s.: We’d like to attend the court hearings for this case, and as always, we’ll need a lawyer to get us in. Please do help.

TRAI’s TV Ad Limits Remain: Broadcasters TDSAT Appeal Dismissed

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