At least three major broadcasting companies have held discussions on forming a combine, the first of its kind, to counter the might of media buying houses in dictating commercial air-time rates.
"Media buying houses aggregate their business by buying ad time on behalf of a whole host of clients. Broadcasters deal with them individually and do not have any bargaining power, forcing them to sell their inventory at highly discounted prices," said the managing director of a broadcasting firm that started a few months ago.
The executive confirmed that talks are on between broadcasters that have roughly similar market shares and gross rating points (GRP) — the total ratings of all programmes in a week on the channel — to deal with media buying houses as a group.
Executives involved in these parleys said the top three broadcasters, Star TV, Zee or Sony, could never combine owing to strong competition among them and large differences in market share.
The broadcasting companies concerned do not want to be identified yet.
"Today, three or four channels together have a GRP of 300 to 400, which is equivalent to Star TV’s GRP of 280. So together, media buying houses cannot ignore our bargaining power, individually they can pressure us," said the executive.
Media buying houses are aware of the talks but said the move is difficult to implement.
"For advertisers it makes sense to do a group deal with one broadcaster and its various channels rather than across broadcasters and spread their ad budgets thinly," said Sidharth Tarashar, investment service director, Group M, the country's largest media buying house.
Others said that deciding a common ad rate would be difficult. "For instance, Sahara One gets lower ratings than INX, Colors gets a higher rating. So how do you fix ad rates per second for all of them?" asked a media buying executive.
According to TAM, market shares of channels like 9X (5 per cent), NDTVImagine (7 per cent), Sahara One (6 per cent) and Sony Entertainment TV (8 per cent) are almost the same, while Colors is higher at 14 per cent.
6 months ago