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WPP's Kantar Challenges India's New Rules for TV Ratings Agencies

The global advertising giant's research unit lands in court over the government's recent guidelines for TV ratings agencies.

A unit of global advertising giant WPP, which is an equal shareholder in India's only TV ratings agency, TAM Media Research, has filed a case in Delhi High Court challenging the Indian government's revised guidelines for ratings agencies. The suit was filed by WPP's Kantar Media Research division.

The Indian broadcasting and advertising industries have been hotly debating the effectiveness of the 15-year-old TAM ratings system in monitoring TV viewing habits in India's estimated 150 million homes. The size of India's broadcasting industry is estimated at about $7 billion (420 billion rupees). There had long been demands for an overhaul, which led the government to approve a new set of guidelines. These range from revised required equity holding patterns to an expanded sample base of TV homes.

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In early January, the government approved a new set of guidelines for ratings agencies based on recommendations by the Telecom Regulatory Authority of India. The guidelines prevent any company from simultaneously having paid-up equity in excess of 10 percent in both a TV ratings agency and a broadcaster, advertiser or advertising agency.

Another revision requires the sample size of homes to be increased to 20,000 (from the existing 9,600 under TAM) within six months. The guidelines add that the number of panel homes should increase by 10,000 annually to eventually hit 50,000.

TAM was reportedly advised that it had 30 days to adhere to the new guidelines. 

Kantar's petition -- which will be heard next week -- reportedly states that the new guidelines would force TAM out of business, as it is 50 percent owned by global advertiser WPP and has no hope of adherence within the allotted 30-day time frame. That could lead to a blackout of crucial TV ratings data just as India is gearing up for a busy TV season: Bollywood superstar Aamir Khan's hugely popular social awareness show Satyamev Jayate is set for its second season on News Corp-owned Star India network's Hindi flagship channel StarPlus in March. Also in the pipeline is cricket's Indian Premier League on Sony Entertainment Television for April. And as India heads for its general elections by May, TV news networks will be in overdrive.

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Meanwhile, a new ratings system -- Broadcasters Audience Research Council (BARC) -- is expected to launch by October, covering the expanded panel size of 20,000 homes. BARC is jointly owned by the Indian Broadcasting Federation (60 percent) with the Indian Society of Advertisers and the Advertising Agencies Association of India (20 percent each).

BARC recently announced a six year tie-up with France’s Mediametrie for technology services and licensing of a television metering system.

TAM's other equal partner -- Nielsen Company -- is also locked in a legal battle, after leading Indian news broadcaster New Delhi Television (NDTV) filed a lawsuit in New York in 2012. NDTV filed a 194-page lawsuit seeking damages of over $1 billion , accusing Nielsen of violating the Foreign Corrupt Practices Act by manipulating Indian TV viewership data in favor of channels that are willing to provide bribes to its officials. New York's lower court ruled last year that the case should be heard in India and not the U.S., a decision that was challenged by NDTV.