Broadcasters, ad firms seek to end standoff

After pulling out advertisements from television channels over a new billing method arising out of taxation issues, broadcasters and advertising agencies are stepping up efforts to end the impasse.

Industry body Indian Broadcasting Foundation (IBF) and Advertising Agencies Association of India (AAAI) said they were in talks to resolve the matter at the earliest.

"We want to comply with what the law wants us to do... I think it will be sorted out soon," Indian Broadcasting Foundation (IBF) Secretary General Shailesh Shah told reporters.

The IBF had decided to move to the practice of issuing 'net' advertisement bills from 'gross' billing. The move was triggered by notices from income tax department to IBF members for non-payment of tax deducted at source (TDS) on 15 per cent agency commission, which used to be reflected in gross bills. Advertising agencies have opposed the move as it could nullify their commissions. When contacted, Advertising Agencies Association of India (AAAI) President Arvind Sharma said: "Discussions are on. Hopefully, we will find a solution soon."

Broadcasters have blacked out commercials since yesterday although they said they have carried ads for those agencies which have agreed to move to the new 'net' billing method.

According to media planners, the standoff could lead to a loss of around Rs 20 crore per day for the broadcasters.

"Around 60-70 per cent of ads are not coming since yesterday. So, the loss per day could be around Rs 20 crore," a media planner said on the condition of anonymity.

The TV advertising segment in India is estimated to be around Rs 12,000 crore per annum. "Broadcasters are losing revenue for every minute as ads are off the air. This is hurting us badly. However, the blackout will continue till agencies agree to a new billing approach," Star India CEO Uday Shankar said. He, however, said: "Advertisers won't be adversely impacted by the move to the new billing approach."

Most of the major networks such as Star India, Zee Entertainment EnterprisesBSE -0.28 pc, TV18BSE 2.45 pc, Viacom18, Multi Screen Media, Times Television Network, and ETV have agreed to drop advertisements.

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