Is the industry heading for another ratings blackout?

The Ministry of Information & Broadcasting has notified the guidelines that were approved by the Union Cabinet last week (January 9).

Based on the recommendations of Telecom Regulatory Authority of India (TRAI) on TV ratings, that were issued in September 2013, the 'Policy Guidelines for Television Rating Agencies in India' will come into force after 30 days from the date of issuance of the order (January 16, 2013).

The portion in the guidelines about cross holdings says that no promoter of a rating agency can own shares in either an ad agency or a broadcaster. This clause presumably deals with issues of conflict of interest. Since WPP owns Kantar that jointly owns TAM with Nielsen, as well as several ad agencies, this would go against TAM - unless its stake is diluted within 30 days.

As of now, Kantar and Nielsen have 50:50 stake in TAM. As per the guideline, the TV ratings agency will be disqualified if it has more than 10 per cent equity with any broadcasting/advertising/ad agency venture. This implies that if TAM fails to comply with the issued guidelines, the industry might see absence of TV ratings until BARC (Broadcast Audience Research Council) rolls out its TV ratings.

In a regular meeting with I&B secretary Bimal Julka on January 16 on BARC's progress, the body has informed the ministry that it will only be able to release its ratings in the second half of the calendar year. "BARC roll-out is completely in sync with what was planned. MIB is just monitoring the progress and we updated them on the progress in the meeting. We look forward to roll out the ratings in the second half of the year," says Partho Dasgupta, CEO of BARC.

According to an industry expert, if TAM believes itself aggrieved in the current circumstances, it will have to move to the court to seek relief. "They might get an immediate relief if the court holds these notified guidelines in abeyance," he adds.

It is yet to be seen how broadcasters, ad agencies and advertisers react to the notification. According to Paritosh Joshi, a BARC Technical Committee member, the progress for rolling out TV ratings at BARC is happening at a good pace. "The industry may experience absence of ratings for a few months but then it's not that this has never happened before. When we look back a year after BARC starts releasing ratings as expected in the second half of this year, people will likely not even remember this hiatus. A quality audience measurement system needs patience, diligence and meticulousness."

As mentioned by afaqs! in earlier reports, another significant feature of the guideline is implementation of a minimum panel size of 20,000 within six months of the guidelines coming into force. Thereafter, the panel size shall be increased by 10,000 every year until it reaches the figure of 50,000.