Zee News gets ambitious: To increase ad rates and cut inventory

The news channel has decided to cut its ad inventory by 30 per cent and increase its airtime rate by 40 per cent.

The Hindi news channel has decided to take a bold step. It plans to cut its ad inventory by 30 per cent. This implies that the news channel will have only 9-12 minutes of airtime available in an hour instead of the usual 12-15 minutes.

To compensate for the airtime loss, the channel has increased its ad rates by 40 per cent. As per market estimates, top rung Hindi news channels claim a rate of Rs 1,800-2,000 for 10 seconds. With a 40 per cent increase, the new effective ad rates will range between Rs 2,500-2,800.

Barun Das, CEO, Zee News, says, "The audience will obviously opt for a channel with lesser and shorter ad-breaks. Though some low-investing brands have opted out, it should not affect the revenues. With five-minute ad-breaks, you lose on the viewer for a significant time. We are ensuring that the viewer gets a good viewing experience with more content."

afaqs! spoke to a few media planners to discuss if the move could work in favour of the channel.

Market dictates

Ajit Varghese, managing director, Maxus, says, "Reducing inventory must be a very conscious move. Nowadays, even news channels are running 12-15 minutes of ads per hour, which annoys the viewers. At the same time, increasing content should also work in its favour. It may increase stickiness and can reflect in the ratings."

"As far as the increase in ad rates is concerned, the market decides on the acceptance or rejection of it. I would leave that calculation open. The market alone dictates the ad rates and if the ratings are good, it is quite possible that the increase in rates would not be rejected," adds Varghese.

Sudha Natrajan, CEO, Lintas Initiative Media feels that this strategy may be a follow up to the TRAI regulation of a cap over the limited ad slots time.

She says, "Though we are still fighting it as an industry, I think it should work for the channel if the industry follows. If a single player is implementing it, I fear it may not show results."

However, some movie channels are experimenting with one-minute breaks or single break movie telecasts and advertisers are willing to pay extra for these ad innovations.

Natrajan adds, "Another fear is that this may result in an inventory crunch for the industry as a whole. If this happens, clients will have to plan well in advance. Due to the plethora of channels that have come up recently, clients have developed a habit of planning and taking decisions at the last moment."