Regulatory Shift in TV Advertising Cap: Limited Gains but Strategic Opportunities

The removal of the 12-minute-per-hour TV ad cap is unlikely to significantly boost industry ad revenue, with potential benefits focused on regional GEC and FTA channels. Audience migration, content stagnation, and demand issues amid changing TV dynamics are core challenges, according to Elara Capital's report.

A recent regulatory change removing the 12-minute-per-hour advertising cap on television channels is predicted to have a marginal impact on overall TV ad revenues, according to a report by Elara Capital. The easing of regulations aims to foster fair competition and enhance business conditions in the broadcasting sector.

Elara Capital estimates that the overall TV advertising revenue could see an increase of just 1-3% at best, in a scenario marked by structural challenges such as audience migration and stagnant content innovation rather than a shortage of advertising inventory.

Although India's TV audience remains extensive, the traditional Pay-TV user base is declining, with a projected drop to 104 million by 2025. In contrast, connected-TV users have sharply increased. With FMCG's share in TV ad expenditure declining, the most notable growth opportunities lie in regional GEC and FTA channels, despite the limited scope for expanding ad inventory in other segments.