The Hindu Business Line : Relaxation of RBI norms brings new advertisers to large foreign channels

SMALL channels beware! The big broadcasters are wooing advertisers such as `Hamdard', `Lijjat Papad', `502 Pataka Chai' and other local detergent and footwear brands. For, private television channels that are currently uplinking from abroad can now accept ads from advertisers who do not have export earnings.

The Reserve Bank of India recently amended the Foreign Exchange Management Act (Current Account Transaction) Rules, 2000 to incorporate the relaxations in current account remittances that were announced by the Government. Accordingly, advertisers are now allowed to remit funds to foreign TV channels even where their export earnings are less than Rs 10 lakh.

This relaxation has opened up huge opportunities for various sectors to advertise in some popular channels from the Star, Sony Entertainment Television (SET) and Zee-Turner stable. And, among the big advertisers are insurance companies, banks and others with popular local brands. These sectors are expected to contribute over Rs 200 crore to the advertising pie.

"Earlier, it was difficult for insurance and other financial services companies to advertise in a big way on television as they did not have export earnings. Though some of them such as Prudential ICICI and OM Kotak Mahindra were present, they had to seek special permission from the Central Bank," said a Mumbai-based media planner. The impact of the new regulation already seems to be visible with MetLife Insurance advertising heavily on popular channels.

Mr Rohit Gupta, Head of Marketing, SET India, said, "There is clearly immediate benefits to broadcasters. The insurance and banking sectors are expected to be big spenders and we have already started making presentations to these advertisers." Currently, several such categories are dominantly present in news channels and smaller entertainment channels such as SAB TV and `Sahara Manoranjan'.

He said that channels such as SET Max or HBO, which have predominantly male viewers, would offer good advertising options to these categories. Similarly, Star India is also targeting these advertisers for its news, movies and music channels. "Some of these advertisers may not be able to buy a large number of spots on say, Star Plus, due to the high advertising rates. But we will definitely try to get them for our other channels," said a Star India spokesperson.

Meanwhile, Mr Atul Phadnis, Director, S-Group, Tam India, said that it is important for big broadcasters to get smaller advertisers on board as the growth in the advertising pie in the last few years has been coming from smaller players.

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