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Broadcasters threaten to drop ads

October 15, 2007 10:36 IST
Leading television networks that are members of the Indian Broadcasting Foundation (IBF) have decided to drop all spot advertisements from their channels from Monday night if the advertisers and their media agencies do not agree to pay the 25 per cent surcharge levied on them.

Speaking to Business Standard, a top advertising sales head of a TV network said all the leading entertainment and television news networks such as Sony, Star, Zee, NDTV and Network18, among others, have agreed not to play television commercials of advertisers who do not agree to pay the input cost inflation surcharge.

In a media release, the IBF has also stated that advertisers who agree to paying the surcharge by 1800 hours on Monday will get a waiver on the additional 25 per cent for the first month - from October 16 to November 16 that will cover the festival season.

According to a source, the IBF is encouraging advertisers to approach the channels directly in case their ad agencies do not agree to the conditions.

"If the clients approach us directly, we will offer them a waiver of 15 per cent initially and will charge them only 10 per cent extra," the source said.

The IBF has issued a separate advisory for some channels in the southern states as some of them wanted to defer enforcement to a later date.

"This is because advertising in many channels in south India is sold by private producers and they needed time to work out the new system," the source added.

The IBF release added that "the surcharge only partially negates the effects of cost inflation that broadcasters have suffered even as audience deliveries have grown very strongly thereby ensuring that TV continues to remain the most efficient and most effective advertising medium in India".

BS Reporter in New Delhi
Source: