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Indian ad association successful in combating TV rate surcharge
Date: 28/10/2007
Following action from members of the Indian Society of Advertisers (ISA), the Indian Broadcasting Federation (IBF), which had initially directed its members to levy an input cost surcharge of 25% on TV media rates effective Oct 16, 2007, has rolled back its decision to impose any surcharge.
The move has been welcomed by ISA members, who had expressed concerns that media rates should be negotiated and decided by an advertiser and its agency, with the sales house concerned, and that no third party or industrial association has any role to play in deciding commercial terms between an advertiser, its agency and media.
In a recent meeting, ISA Members had authorized the local Advertiser Association to take necessary legal action to stop broadcasters from collectively imposing rate increases and confirmed that they would be taking individual legal action for breach of contract, if any. Members were encouraged to continue the practice of rate negotiations and agreements with individual broadcasters. Members agreed to reject any demand by any broadcaster to implement IBF announced surcharges and agreed that the rates would continue to be guided by the merits /demerits of individual broadcasters.
Following the decision, speculation has arisen that the IBF will reconsider the levy of a surcharge on new deals effective Jan 1, 2008 and that they propose to foreclose existing contracts. The ISA has reiterated that it rejects the levy of any surcharge at any time and will strongly oppose any industry body collectively imposing rates, prices, levies, surcharge or increase by whatever name called.
WFA has worked closely with the ISA in its efforts to roll back the imposed surcharge and has provided support, including legal advice, from a global level. The ISA will shortly provide its members with template terms and conditions for broadcast contracts provided by the WFA. For more information on this please contact [email protected]
