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TAM’s final support from advertising and media agencies is also cracking. The Advertising Agencies Association of India (AAAI) and the Indian Society of Advertisers (ISA) have expressed concern over the issue and are meeting TAM officials on 16 August.
“We (ISA and AAAI) will be taking a collective view on this issue. We have scheduled a meeting with TAM later this week. I have no independent opinion that I can share with you at this stage,” says GroupM South Asia CEO Vikram Sakhuja.
So is there something rotten in the ratings agency that influences advertising expenditure of around Rs 140 billion on Indian television networks a year?
The truth is that parachuting out of TAM is no easy option. There is no surviving ratings agency and setting up operations in quick time to represent India’s vast and diverse socio-economic structure can’t happen in any hurry. It has, after all, taken TAM 14 years of hard experience in the Indian market to set up a ratings system that may have become inadequate in coverage now (broadcasters would say inaccurate too) but has largely captured the industry needs over so many years.
BARC and the power tussle
BARC, the option that broadcasters have been toying with for so long, is yet to gather wings. It is in a way stuck between a power tussle between the broadcasters and the agencies. Even after agreeing this March on a shareholding structure with broadcasters having a majority of 60 per cent equity and the AAAI and ISA holding the balance 40 per cent, it has failed to get off the ground.
“We (IBF) are keen to set BARC in motion. But AAAI and ISA have been responsible for slowing down the progress,” says IBF president and Star India CEO Uday Shankar.
That direct attack has not gone down well with the agencies. “The ball is in the IBF court and the draft document (incorporating memorandum and articles of association) has been sent to them a while back,” states AAAI president and Leo Burnett chairman and CEO Indian subcontinent.
But why will the media agencies be interested in delaying the existence of BARC?
“Maybe, the system is working for them. Only one-third of the country is measured by TAM and for that they are getting paid (by the broadcasters) for the whole of India. Television advertising is, thus, cheaply priced and they are benefitting from it,” says the chief executive of a leading broadcaster on condition of anonymity.
AAAI president and Leo Burnett chairman and CEO of India subcontinent Arvind Sharma does not agree that the agencies do not want a new ratings system as the current structure helps them drive down prices. “The belief that the only purpose is buying cheap is not right. Clients have a very different agenda and are interested in reaching out to their target audiences. In a free market, pricing will definitely be an issue but not the only one that matters,” he says.
The root of the matter is that broadcasters, yielding to the muscle power of the media agencies who have consolidated over the years to gain size, want to strike a balance that will enable them to get better pricing for their content as costs have spiraled over the years. They have been unable to do that for so many years but a new-found unity due to economic compulsions has provided them with sufficient strength to push for BARC.
Shankar, a newsman throughout his work life till Rupert Murdoch made him the CEO of his highly successful media empire in India, was quick to sense this changing pulse. Sharing a great relationship with the son of Subhash Chandra and Zee Entertainment Enterprises chief Punit Goenka, he played a main role in uniting the broadcasters in this fight.
The benefit of that unity: broadcasters could get majority stake in BARC and even went to the extent of excluding ISA.
“They (IBF) first said why have ISA as a part of it (BARC). That came as a stumbling block. But we are cooperating with them and are not resisting anything that will genuinely protect the interests of our clients and the industry as a whole,” says the head of a leading media agency who did not want his name to be revealed.
When BARC was first mooted in March 2008, the ISA was kept out of the shareholding structure. The IBF held 60 per cent IBF and the remaining 40 per cent was with AAAI.
“In the beginning, an ISA representative said they want 50 per cent share. Then it watered down to one-third of stake with each body and they even said that they would not pay for their equity holding. We were appalled by the suggestion as it would have given the two of them a combined share of two-third in the entity. We found that unacceptable and said that if they made such demands, ISA could be kept out as the interests of these two bodies are aligned and they want to buy advertising cheap. Obviously, we didn’t want IBF to be outvoted. Since the ratings system is primarily for a broadcast market and there is need for complete independence of data, we didn’t want any change in the construct of the shareholding,” says Shankar.
How the power equation changed
So why did the agencies bend and come down to supporting BARC?
“The government has stepped in and that has changed the power equation,” says the head of a broadcasting company.
The situation has, indeed, changed. When Zee raised its voice against TAM in late 2001, alleging leakage and manipulation of data, it appeared like a lone wolf wailing in the dark. Few came in support and TAM CEO LV Krishnan then countered that the channel did not raise the credibility issue when it was enjoying higher TRPs (television rating points). “Was it because some other channels have an edge today,” he had stated.
Even when Doordarshan clamoured for a wider representation of measurement data that would be able to capture its kind of mass audiences, it did not get support. Private broadcasters were then busy eating into the audiences of the pubcaster and expanding their own networks at a time when cable and satellite television started penetrating wide and deep.
NDTV’s allegations have, perhaps, caught more attention as the broadcaster has not just moved the court but also filed it in New York. It also cited an unidentified “whistleblower” who seemed to have said that he “accepted bribes from TV channels and in turn paid bribes to TAM officials and to some of the people who have allowed TAM to install peoplemeters at their homes”.
Growth in Tier II and III towns demand expanded coverage
The embarrassment has come at a time when TAM is under pressure to expand its coverage to smaller cities and get into more demographic sampling. .
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