Channel boom a bane for advertisers

A fundamental concept of economics says a surge in supply puts the reins of the market in the buyer's hands, leading to a fall in prices. In the audio visual media, though, the opposite is happening.

The sharp rise in the number of television channels has created an immense amount of fresh advertising space, but only heaped misery on advertisers.

An astounding 200 channels have hit the air since 2000, taking the total number to 326. (There were only six in 1991, when the satellite TV had entered India's orbit, and 48 till 1996.)

Given that a channel devotes about 10 minutes every hour to making money, and that all these channels are always on air, this mushrooming has created 48,000 minutes of new advertising time every day. As advertising time is mostly sold as 10-second spots, that's 288,000 new spots a day.

In a perfect world, this would have meant that the advertisers would get to choose their spots and pay less for it. In the broadcasting world, there has been a deep erosion of attractive propositions for the buyer. And the costs have shot up.

"I have always held the view that when there is multiplicity of channels, it does not work in the favour of advertisers. It becomes that much more difficult to generate impact for the client," said Sam Balsara, chairman and managing director of Madison, a media planning and buying agency.

According to an extensive study by TAM Media Research, seven years ago, only 20 channels accounted for 80 per cent of television viewing.

In 2003, when this was split among 29 channels, 1.2 per cent of all programmes attracted television rating of above 10. If you were an advertiser with a big ad budget, you know which channel and programme to buy into.

At present, one would know a lot less. Eighty per cent of television viewing is now split among 43 channels and not a single show is rated above 10. Viewers are not sticking to any channel for too long and definitely jilting it during commercial breaks.

A case in point is the television premiere of the new Don, starring Shah Rukh Khan, on June 3 this year, less than eight months after its release in theatres. On the same day, at the same time, a rival channel aired the original movie, starring Amitabh Bachchan, which had already been shown 16 times in the preceding 18 months.

By plotting the minute-by-minute viewership on a line graph, TAM shows that at several junctures the viewership of the new Don dipped and that of the old one surged. These, presumably, were the commercial breaks during the premiere.

As TAM's chief executive officer L V Krishnan points out, one would have had to buy several spots on both channels to catch the viewer on at least one.

"Fragmentation requires one to spread across platforms and channels," he said.

And that comes at a price since falling viewership has not resulted in a proportionate fall in advertising rates. "The cumulative impact is that the advertiser has to pay more to reach the same audience," said Balsara.