You’re reading it here first: A group of about one hundred internet companies wants the Indian Broadcasting Foundation to review an advertisement policy which requires them to pay the entirety of funds for their marketing campaigns to TV channels, upfront. In late September, Policybazaar’s co-founder and CEO, Yashish Dahiya wrote a letter to IBF president K. Madhavan, on behalf of ‘The Tech/Digital/New Economy companies of India’ calling for the body to review the policy. MediaNama has seen a copy of the letter sent to the IBF.

Apart from Policybazaar, edu-tech platform upGrad, co-founded by Ronnie Screwvala, is among the members of this group. Dahiya declined to name any of the other organisations involved. The IBF is a not-for-profit organisation, and claims to manage over 350 TV channels, and about 90% of television viewership across country.

An industry source we spoke with said that Internet companies are seen by IBF as more likely to default on their dues, which is why member TV channels insist that they pay 100% of their marketing dues to them even before the campaign starts. Due to the same reason, internet companies don’t get any credit from TV channels, which blocks a large part of their marketing funds.

Several industry representatives from the marketing industry that MediaNama spoke to, who did not wish to be named, concurred that these practises towards internet companies are discriminatory, more so, because lately, these companies have become among the largest spenders on TV marketing campaigns.

MediaNama has reached out to IBF for comment, and will update once we hear from them.

IBF’s ad policy ‘discriminatory’, ‘unacceptable’

“We collectively address the impasse on a very archaic stand by the IBF and in turn the Broadcasters who run the Entertainment ( non news/ non digital) Channels in India that “all dot-com” companies most pay 100% advance for advertising on your channels,” Dahiya wrote in the letter. He added that this is a case of “clear discrimination” against companies that have added “at least 50% to the advertising growth”, which is “unacceptable any longer”. Other issues raised:

  • Questioned IBF’s credit policy for internet companies: The letter also called in question an “unfair” credit policy employed by TV channels for running marketing campaigns of internet companies, which still regards “new economy companies” as “high risk”. After the burst of the the dot-com bubble two decades ago, the IBF had become extremely cautious of internet companies, and has since then, considered them more likely to default on their credit, an industry executive we spoke with explained.
    • However, in the letter, Dahiya contended that the situation has “changed since 2001”, and that it is “unfair that the IBF continues to ignore the ground reality as it suits your member’s convenience and cash flows”. The IBF’s credit policy is “not in tune with the ground reality”, Dahiya wrote, and said that it is in IBF’s “interests” that it does not “drive this very valuable sector of companies away from TV forever”.

“It is indeed unfortunate that the government, and the entire world acknowledges and accepts that tech, digital and new economy companies are & have been the future of growth, but the IBF clings on to this clear isolation/discrimination of all such companies based on the view taken by your board many years back when “dot-com” was starting up and never felt the need to review your policy since,” the letter said.

When MediaNama reached out to Dahiya, he told us that he had written to the IBF at the end of September, and heard back from them on October 7, as IBF agreed to review the rules. In the letter, Dahiya had requested IBF to organise a digital meet within a week. He proposed that there be five members representing IBF, including Madhavan, and five members representing the internet companies. “We do hope we can come to an immediate solution to this continued discriminatory and one sided approach that has been a practice at the IBF,” said the letter.

Dahiya further told MediaNama that “It’s an old rule and time has changed so we have asked for a review. That’s it. There is no other issue. It’s just [the] dot com bust was 2001 and 19 years later some of us are decent businesses and thus the blanket credit matter can be reviewed”.

Dahiya’s letter to IBF

Here’s the letter that Dahiya wrote to IBF head K. Madhavan on behalf of about one hundred internet companies:

Dear Mr. Madhavan Sir,

We write to you as head of IBF, collectively as close to 100+ Founders, Entrepreneurs ( all cc here) who in the last decade have contributed collectively to the exponential growth of the new & digital economy of India.

We collectively address the impasse on a very archaic stand by the IBF and in turn the Broadcasters who run the Entertainment ( non news/ non digital) Channels in India that ‘all dot-com”companies most pay 100% advance for advertising on your channels. It is indeed unfortunate that the government, and the entire world acknowledges and accepts that tech, digital and new economy companies are & have been the future of growth, but the IBF clings on to this clear isolation/discrimination of all such companies based on the view taken by your board many years back when “dot-com” was starting up and never felt the need to review your policy since.

1. We believe there is an urgent and immediate need for this to be reviewed and changed. We believe this clear discrimination of companies that in fact have added at least 50% to the advertising growth is unacceptable any longer.

2. We feel further discriminated – as your unfair credit policy still regard the new economy companies ( what your credit policy clubs as “dotcom companies” ) are singled out as high risk! – Clearly the situation has changed since 2001.

3. We believe it is unfair that the IBF continues to ignore the ground reality as it suits your member’s convenience and cash flows.

4. We would like to be supportive of TV as a medium, and there is every reason to co exist if their is mutual respect and acknowledgement that the IBF and your archaic credit policy is not in tune with the ground reality. But for that we would need to find the right solution to the credit policy given to the very companies who support your growth and its in your interest too that you do not drive this very valuable sector of companies away from TV forever.

This letter is a formal request that there be a digital meet, to be called on in the next 7 days – where would appreciate up to 5 members from your side that would include you and two more of the Board members of IBF and if you like two of your Credit Policy members -and we will have a S member group from our side who can speak for all of us below. If you would like a tighter group we are open too.

We do hope we can come to an immediate solution to this continued discriminatory and one sided approach that has been a practice at the IBF