BARC: Debt funding without equity in process
It is learnt that debt funding through broadcasters and some major advertisers is currently underway for the present phase. As per sources, there will be no equity funding involved at any stage of the process
With new ratings guidelines in place and a question mark over the existing ratings agency TAM still remaining, stakeholders in the industry are looking forward to the Broadcast Audience Research Council (BARC), which is scheduled to commence its operations from October 2014.
Speculations are rife about the funding for BARC. It is learnt that in order to execute BARC’s operations from October, big funds are now needed for the developments to move to the next stage. Most of the funding is being currently raised as debt funding from banks through broadcasters and advertisers. Apart from this, sources have also shared that there will be no equity funding involved at any stage of the process.
Highly placed sources involved in the day to day functioning of BARC have revealed that by the end of this week (March 7, 2014), funding of the current phase will be completed. The funding will be required in phases and not collectively. “Money is not at an issue at BARC as all the stakeholders are at consensus with each other and are working collectively towards it. Big funding will now be required and due process is taking place as of now,” informed a highly placed official at the agency.
Major advertisers, who have a high share of TV spends, are also involved in facilitating the funding. Although some advertisers have confirmed that they have not been approached for funding, they also affirmed that they will be involved in the future.
Meanwhile, BARC has maintained that its cost will be less than that of TAM as the technology used is open source technology. In an earlier interaction with exchange4media, Punit Goenka, Chairman, BARC had said, “We are going with an open source technology, which is PC-based, while the technology which the current system (TAM) uses is proprietary. I don’t know what the cost of making it is. When I get an open source technology, I can negotiate each component and, therefore, I know what the cost of making that meter is, and we are going to get it manufactured from one of the best in the world. We are confident that we will be able to deliver the numbers.”
The Council recently announced French company MediaMetrie as its technology partner. BARC is also looking to appoint a panel design partner soon, who will decide on the constitution of the panel homes.
As per the ratings guidelines, the ratings agency operating in the field should put 20,000 peoplemeters in place, which need to be increased by 10,000 every year till the number of peoplemeters reaches 50,000.
For the record, BARC is a Section 25 company, which was registered on July 9, 2010. As per the Companies Act, 1956, Section 25 companies are formed for promoting commerce, art, science, religion, charity or any other useful objective. The profits accrued or any other income obtained is used in promotion of its objectives and it prohibits payment of any dividend to its members.
The Indian Broadcasting Foundation (IBF), Indian Society of Advertisers (ISA), and Advertising Agencies Association of India (AAAI) have stakes in BARC in the ratio of 60:20:20, respectively.
The sources that exchange4media spoke to have also said that there is no question about halting any operation as stakes are high and the credibility quotient of the people involved is also at stake.
BARC officials had not responded to the emails sent till the time of filling this report.
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