Kantar moves HC, fears falling out of business

The rating agency tussle does not seem to take rest. When BARC announced its technology partner this week, members of the council were repeatedly questioned about TAM’s chances in the race. While most of them stated that there is no harm if TAM wants to participate and run for the race, the game got even more complex and murky in just the couple of days.

Kantar Media, which is owned by global advertising giant WPP, a 50% shareholder of TAM Media Research (the other half is held by Neilsen), the country’s sole television ratings agency, has moved the high court in Delhi against the new guidelines in the segment notified by the central government.

It may be recollected, according to the guidelines, no company either directly or indirectly (through its associates) is allowed to hold more that 10% paid up equity in a rating agency, if it holds a stake or a part of a broadcaster, advertiser or an advertising agency. TAM, as we know, was given 30 days to undo its cross-holdings. Kantar’s shareholding of 50% in TAM, is thus a violation of these guidelines, as the Martin Sorrell-led advertising and marketing services firm has investments in other business ventures in the country. Hence, Kantar, had, earlier this week filed a writ petition against the Government of India in the Delhi High Court, stating that the new guidelines on TV rating agencies would put TAM out of business, a ratings agency that has been operating in this market for the last 15 years.

While the sub-judicious matter would hold back any comments from parties involved in it, the legal recourse is expected to unfold through the week. However what has surprised many is the move by Kantar alone to approach the courts. Nielsen, the other shareholder, has not opted to be a party to the petition.

However, a golden streak in the dark comes for broadcasters and advertisers, who were in a lot of ways unprepared for a media-dark environment in the first half of the year. The main reason being that it’s this time when most broadcaster bring in big ticket properties calling advertisers and investors. Some of them would be season two of Satyamev Jayate on Star Plus which is slated for a March launch, the much loved IPL season seven that comes to television homes in April-May, and the biggest of all – the General elections all through April-May 2014.

With the on-going legal battle, it’s for time to decide how the story unfolds in the coming weeks.