Movies Now ups ad rate by 100 per cent; Is the move logical?

The channel will continue to stick to the commitments that it has already made in the long-term contracts. The rates will be applicable for the new advertisers coming on board and on deals which are ready for renewal.

In a bid to find the 'right value' for what it delivers, Movies Now, the English movie channel offering of Times Television Network, has decided to increase its advertising rates by an absolute 100 per cent with immediate effect.

Consequently, according to market estimates, the non-primetime rate of the channel will increase from an average of Rs 1,500 per 10 seconds to Rs 3,000 per 10 seconds. The primetime rates, meanwhile, is expected to move up from an average of Rs 6,000 to an estimated Rs 12,000. The advertising airtime available on the channel is 12 minutes an hour.

When quizzed on why the channel decided to go for a hike, Ajay Trigunayat, CEO, English Entertainment Channels, Times Television Network, says, "When we launched, our 10-second spots were priced much lower until we decided to up them in the second quarter of the launch, even as the advertisers started reacting to our market presence. However, the rates still remained short of what STAR Movies demanded. We have been delivering consistently but it was not reflecting in our pricing. Therefore, we thought it's time to cash-in on the performance and correct our pricing from this year onwards."

Trigunayat adds that the channel did not want to increase the inventory time as that could disturb viewership. "There was no other option but to increase the rates," he explains.

For the record, for STAR Movies, the primetime rate ranges between Rs 10,000-12,000 per 10 second spot, while for non-primetime, the variation could be anywhere between Rs 2,000-3,000 per 10 seconds.

However, does this mean that advertisers will have to revisit their long-term and existing contracts with the channel?

"No!" says Trigunayat. "We will continue to stick to the commitments that we have already made in the long-term contracts. The rates will be applicable for the new advertisers coming on board and on deals which are ready for renewal."

But, does a 100 per cent increase in ad rates find logic in the advertisers' books?

No one denies the fact that the launch of Movies Now created significant ripples in the English movie genre, which had otherwise remained an "undisturbed" territory until the foray of this new competitor. In fact, experts note that Movies Now has been averaging at a 10 GRP rank in the C&S 15+ (All India) category, while for STAR Movies, the average GRP is around 11 points.

So, for some, the move to match up to STAR Movies' demands seems quite logical.

According to Sudhir Raju Puthran, media group head, MPG, Movies Now has seen a 15-20 per cent increase in viewership in the last one year and a boost in ad rates is, therefore, a reasonable move.

"Also, if the inventory of the channel is expected to go full, then the channel is left with no option but to increase its rates to generate more revenues when the choice of upping the inventory time remains invalid," he says.

However, there is another group of media pundits who feel that a 100 per cent rate hike is too illogical a move for the channel as of now.

Vidhu Sagar, senior vice-president, Carat Media India, notes, "No doubt, Movies Now has been performing well within the given genre. But it has still not earned the status of a market leader. STAR Movies is still the undisputed leader when it comes to perception. Also, the English movie genre is used in a media plan with more frequency and reach, and Movies Now is not always a part of that plan. It could be replaced with HBO or Pix."

Another top media buyer notes that the market is still not buoyant and many categories including insurance are not willing to spend enough. "In such a scenario, it's least expected that advertisers will be willing to pay a premium to a channel which is not an undisputed leader or has not doubled its ratings in the last one year," she says on conditions of anonymity.