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Boycotting TAM: Desperate measures for desperate times

It was NDTV which first decided to severe ties with rating agency TAM Media Research last year. Now Multi Screen Media, which runs channels such as Sony Entertainment Television, SET Max, and Sab TV, has followed suit. Other big networks such as Viacom 18 and Star India are also expected to join the bandwagon.

twitter-logoAjita Shashidhar | June 11, 2013 | Updated 20:41 IST

Ajita Shashidhar
Ajita Shashidhar
It was NDTV which first decided to severe ties with rating agency TAM Media Research last year. Now Multi Screen Media, which runs channels such as Sony Entertainment Television, SET Max, and Sab TV, has followed suit. Other big networks such as Viacom 18 and Star India are also expected to join the bandwagon.

Why would broadcasters, which are heavily dependent on advertising revenue, want to stop subscribing to TAM ratings? After all, advertisers invest in channels on the basis of these ratings. But media observers maintain this is an act of desperation to increase revenue.

The bulk of the ad money a channel gets from large advertisers is linked to the cost per rating point (CPRP). The CPRP is benchmarked against the TAM rating.

Earlier this year, TAM diversified into smaller towns with populations of 20,000 or so.  This has impacted the ratings of several channels, especially the ones consumers have to pay for. In the smaller towns, with lower purchasing power, many more consumers are likely to watch the free-to-air channels such as Sahara or Star Utsav rather than the paid ones such as Sony or Star Plus. Thus several pay channels have found their TAM ratings falling.

The viewership of IPL this year dipped to 6.9 points against 8.9 points last year. "The fall is not so much to do with the IPL controversy," says a media planner who doesn't wish to be quoted. "It is more likely that many people didn't watch IPL in smaller towns because it is a pay channel and their cable operator doesn't show it. This time TAM has captured that data."

Sony Entertainment Television's ratings have dipped in the post-digitization period, says this media planner. "Dip in ratings would mean lower CPRPs and hence dip in ad revenue," he says. Therefore, not subscribing to ratings could be a way for a broadcaster to back out of CPRP-linked deals.

Doesn't the broadcaster have robust subscription revenue to fall back on? The truth is that while digitisation has been imposed, broadcasters are yet to start getting revenue. Set-top boxes have been installed in consumers' homes, but the last mile cable operators are yet to start collecting the revenue and passing it on broadcasters, says a senior media analyst. Barring the DTH companies, most of the cable operators have not created subscription packages for their viewers.

To make matters worse for the broadcaster, the TRAI (Telecom Regulatory Authority of India) has capped advertising time at 12 minutes per hour of programming. As a result, broadcasters such as Viacom 18 have announced a 30 per cent hike in their ad rates. "The advertiser will not agree to pay a premium unless there is proportionate increase in viewership," says this media analyst.

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