Ad, TV companies credit period deal lapses

MUMBAI: Advertisers and broadcasters have yet to renew an agreement that provides a 60-day credit period to media buyers to pay television channels for advertisements, say industry officials. The agreement ended on March 31.

The Advertising Agencies Association of India (AAAI) and the Indian Broadcasting Federation (IBF) signed the agreement in 2003 to streamline the credit policy and other aspects of business between channels and advertising agencies.

Usually, a joint committee of the two industrial bodies meets during the Goafest to renew the deal. This time, there’s no meeting scheduled at Goa.

Broadcasters are expected to seek shorter credit period and improved compliance in the new agreement because media agencies have been defaulting on payments, more than one source in the IBF said.

Payments are delayed by almost 90 days, they said. On a monthly basis, the outstanding is to the tune of almost Rs 400 crore, compared to Rs 140-150 crore earlier, a person close to the development said.

The IBF wrote to AAAI president Colvyn Harris a few days prior to the agreement lapsing. “Now it’s up to the AAAI to come up with a proposition that meets the expectations of the channels,” the person said.

Both IBF and AAAI refused to comment. The two are expected to meet after Goafest.