Mumbai's United Television has decided to cut costs by switching off air-conditioning duringcertain hours and introducing coupons for tea.With advertising spend growing at only 22 per cent in 1996-97, compared to a phenomenal 35 per cent in 1994, belts are being tightened and socks are being pulled up all across the media world. Even according to the most liberal estimates (by media analysts Carat India), the ad spend this year will be only Rs 5,100 crore, about Rs 1,000 crore less than the expectation. Even of this, not all the money will be in the bag. ``Payment cycles have changed from 35-40 days to 90 days,'' says Nimbus Deputy Vice-President (Marketing) Arup Dutt, whose company has let go of people associated with ``programmes that were not materialising''.
There is a liquidity crunch in the market, agrees Doordarshan Director, Audience Research, B S Chandrasekhar. Which is why, DD, which talked so proudly of its Rs 532-crore of advertising revenue last year, will be grateful if it touches Rs 450 crore. The downturn is over a year old and most are ascribing it to a decline in themanufacture of consumer durables and the absence of a regulatory framework (which has particularly affected the television industry). ``We anticipated a decline last year which is why we let go half of our employees,'' says Clea Director P Venugopal.
Even that is in a state of flux. ``Inventories are piling up and there are very few new campaigns. If there are, they are press-oriented as they are price-driven,'' says Dutt. And though programming needs of television networks have increased, the vicious circle of delayed payments is causing the general lull. Corporate clients are not paying advertising agencies on time, agencies are not paying the networks, and the networks are not paying the production houses. So, even if the ad spend has grown, albeit at a slower rate, collection has become virtually impossible. Will the situation improve? Plus Channel's eternal optimist Amit Khanna thinks so, even though he agrees that profit margins for producers have declined. ``Where guys earlier made Rs 50,000 on eachepisode, they must be making only Rs 5,000 now,'' says Dutt. The way out, says Khanna, is to make more shows.
Especially in news and current affairs, thanks to the elections. But even here, television companies are being cautious. TVi, TV Today and New Delhi Television are hiring only for the short-term till Election '98 is played out. Till a new government is in place, does some spending and resolves the chaos in the regulatory environment, no one wants to take a chance. Look what happened the last time they were told of a boom.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
