How dual currency will play out as TAM re-enters TV ratings business

With TAM India applying for a license for TV ratings, the stakeholders debate whether two currencies can coexist and who will benefit from the new regime - advertisers or broadcasters

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New Delhi: As TAM India plans to return as a television rating agency, India is set to become a dual-currency market once again after about one and a half decades.

TAM’s TV ratings business ceased to exist in February 2016 after the Indian media and entertainment sector set up a joint industry body to launch a new currency under BARC India. However, the firm continued its other operations including the weekly AdEx India report.

TAM has been in talks with the Ministry of Information and Broadcasting for over a year before formally applying for a license under the “Policy Guidelines for Television Rating Agencies in India 2015”.

Under the guidelines, any rating agency applying for a license will require a minimum panel size of 20,000.

“Thereafter, the panel size shall be increased by 10,000 every year until it reaches the figure of 50,000. The panel of homes has to remain representative of all television households in the country,” says the policy guideline.

The existing ratings regime has about 50,000 people meters measuring pay and free television viewership across the country.

This would be a big departure from the past when TAM India used to disseminate TV ratings with about 8,000 people meters when it sold them to BARC India.

The I&B ministry officials told that the application is being processed and any firm has to fulfil all the requirements laid down by the government in the policy guidelines.

Industry observers, who were in favour of a single currency until a few years back, pointed out that the governance issue with BARC India in the past coupled with the alleged TRP scam in 2020 gave reason to the government as well as the industry to adopt dual currency.

“However, there were no takers of this idea because of the huge investment required to set up a full-fledged rating agency with at least 20,000 meters to begin with. Even TAM had been engaging with the ministry seeking certain relaxation but it finally applied for a license,” said a senior media executive.

If TAM fulfils all the requirements, it is expected to begin with TV-only measurement and then expand its capabilities to measure digital devices later, the executive added.

TAM, a 50:50 joint venture between Nielsen and Kantar Media, was dragged to a US court by NDTV over meter tampering charges.

The lawsuit was the final nail in the coffin of the TAM ratings as the industry initiated the discussion around the joint industry body in 2013 led by then Star India chief Uday Shankar and Zee’s Punit Goenka.

According to GroupM’s “This Year Next Year” report, television adspends is projected to be around Rs 45,000 crore in 2024, more than double the 2015 estimates.

While industry experts support the idea of a dual currency, they cautioned that the broadcasters may not be willing to shell out double what they are already paying to BARC India.

“Forget the setup cost of Rs 250 crore which BARC India incurred in 2015. With the advancement of technology, that cost will be significantly less today for TAM. But the operational cost is more than Rs 300 crore annually which is paid by the broadcasters. Will broadcasters pay 1.6% of their ad revenue towards ratings instead of the existing 0.8% is the question,” said a broadcast veteran.

“Our clients are hungry for the data. As their agency, we will subscribe to the data at whatever cost TAM will propose. Now, which data will primarily be used for media buying will be the big question in future. For two currencies to coexist in a market, it is only possible when the clients are divided into two sides. A client cannot use both currencies for media buying. If some clients use BARC India and some use TAM India, then in that case each broadcaster will have to have both the currencies and that’s the only way of coexistence. Else, one will have to retire,” said a media agency head.

When asked if the dual currency would be used to suppress advertising rates by advertisers, the agency head did not deny such possibilities.

“This will add negotiation power to the advertisers. Any advertiser will be free to use the data set which saves some advertising bucks. This will be a whole new skill set required in the dual currency regime. One can argue that the broadcaster will have the same advantage to their side but you know how the advertisers have always the upper hand owing to the fragmentation of media,” the agency head said.

Ministry of Information and Broadcasting BARC India TV ratings I&B ministry TAM India