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Hindi entertainment channels mull ad rate hike
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Mumbai: The year 2009 had been a year of challenges for the Hindi general entertainment channels (HGECs) in India prompting major players like Zee Entertainment Enterprises Ltd (ZEEL) and Sony to plan a hike in ad rates this year.

Joy Chakraborty, chief revenue officer, ZEEL said, “Last year, in February -March we had rationalised our ad rates. In the GEC space, we have to juggle around the package provided. Hiking ad rates is a continuous process in our company, and this year we are looking for increasing the ad rates by 8-10%.”

According to industry reports, Zee had raised prices for its ad spots by almost 12-15 % in September, 2009. ZEEL had also decided to lower its programming costs by 15 - 20 % by renegotiating its rates with production houses. Media buyers say that HGECs’ ad rates differ on parameters of various deals.

Mona Jain, executive vice-president, India Media Exchange said, “If the television ratings of channels go up, then ad rates also rise. However, if the channel is not performing, then the rates will go down or will be status quo. The ad rates of GEC were more or less status quo as the year 2009 progressed. While there was pressure by some channels to increase rates as the ratings went up, overall the value delivery was maintained.”

Industry sources say that the ad rates are bought by the advertisers, on the basis of cost per rating point (CPRP), which indicates the percentage of viewers watching the programme. “Every new deal with the advertisers has a higher CPRP than the earlier year. It is seen that advertisers like to invest in soaps as compared to the non-fiction shows,” added Chakraborty. According to sources, advertisers from sectors like telecom, automobile, financial and FMCG are increasingly investing in this space, with FMCG covering the highest 70% of the ad pie. The top three channels namely, Colors, ZEE and Star Plus are said to be competitive in terms of gross rating points and television rating points every week.However, this solely depends on their performance of reality shows, a blockbuster movie or soaps. Last month, Sun TV Network announced hike in advertisement rates by 9-33% applicable from January, 2010. Ajay Vidyasagar, COO, Sun TV Network, said, “In 2009, we held on to our ad rates and did not revise them, unlike other players. Throughout the year, we operate on our rate cards and this has been consistent over years. However, in 2009 our ad revenues grew by 20% and this year we are eyeing a growth of 15-20 %.” The hike in the ad rates of Sun TV range between 6 -16 % for its Telugu channel, Gemini TV, and upto 10 % on its Kannada channel, Udaya TV. NP Singh, COO, Multi Screen Media, the company that owns Sony Entertainment Television says, “Last year our ad rates fluctuated by 10-15%. However, we are expected to increase our ad rates in the first half of 2010, but cannot confirm anything now.

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