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HC`s hearing on OAP implementation nearing its date; will Delhi`s OOH environment finally stabilise?

06, July, 2015

Abhinav Mohapatra, New Delhi

About two months back, the Delhi High Court gave the city’s civic authorities an order to implement the Outdoor Advertising Policy of 2007 and ensure that all media that are contrary to the policy are to be taken down. According to the High Court the OAP was not being followed in ‘Letter and Spirit’ post hearing a PIL by a resident, the judicial body had expressed concern over billboards, hoardings and posters, both commercial and political that were put up across the city, which were in ‘gross violation’ of the policy and had directed municipal authorities to immediately remove such illegal structures.

With the High Court hearing nearing its date, Delhi, according to asset owners is not what it used to be when it comes to outdoor media. A lot of media owners have expressed concern over the topic and are waiting for amends that will stabilise the environment in the city. The Delhi High Court has also said that the direction to implement the OAP includes tendered sites that violate the policy. The corporations have been ordered to take action under the Delhi Prevention of Defacement of Property Act of 2009 and file a status report by the 14th of August which lists down the steps taken by the authorities concerned to implement the 2007 policy and 2009 act.

Happenings

Ajay Gupta, Managing Partner, Number One Advertising and Marketing and a member of the Delhi Outdoor Advertising Association says that the authorities are totally against private sites and the reason behind the same which everyone is discussing is the court striking down the licence fee that the municipality used to take for outdoor media assets. “I am of the opinion that this is not the reason for it, the actual reason is that there were a lot of illegal sites that had cropped up which the corporation was not being able to control and if we talk about revenue; utilities, bus-shelters, street furniture does not generate any revenue. The authorities want the private players to fade away and they themselves want to come up with a sole tender or a cluster approach.

The court had ordered to remove illegal sites and those that are not in the purview of the policy on the 8th of April this year, according to the asset owner, the South Delhi Municipal Corporation sent a mail to the advertisers on 23rd of May, stating that the permissions for private sites have been revoked. This rippled and made more than 2.5 lakh people, who are a part of the outdoor advertising fraternity, uncertain about their employment. The DOAA challenged the validity of the withdrawal of permissions and whether it was under the OAP law or not. The issue was to establish whether the private sites were legal under the purview of OAP, which led to the court ordering a joint inspection for figuring out deviations if any. After the joint inspection the report that was submitted stated that the corporation will have to remove private sites since there was no parameter under section 1.8 of the OAP which is for building wraps on private sites.

Hearing all of this are brands apprehensive of advertising in Delhi? Talking from an OOH specialist agency perspective, Aman Chaudhary, Business Director, IKON says to an extent yes, “large Format units are truly in short supply and cost efficacy takes a back seat while the market offers limited inventories. Many Brand managers are wary about poor ROI on OOH investments in Delhi in the ongoing scenario and my belief is that these investments have either been postponed or budgets diverted to elsewhere. We haven’t seen sizable campaigns beyond OLX, Aashirwad and Hindware in Delhi in last few weeks. Most of us haven’t had a super active June. Besides the uncertainty about OOH media in Delhi, like every other year, many of us have also been out on a vacation in June and the focus on OOH was not much. The real story would unfold July onwards when Supply side constraints would be more visible.”

Search for stability?

Gupta claims that the corporation has given deviations according to its own whims and fancies and since 2007 when the OAP came into existence it has not been followed in letter and spirit. The corporation started charging licence fee from private sites, they started taking licence fee for shop signages, they issued damages circulars among many other such issues. “The policy itself is very good, it gives a free hand to the private sites, it gives control to the relevant authorities, it gives utilities as advertising sites and so many features that are beneficial for the entire ecosystem. But for the longest the corporation has been making their own rules and circulars which are implemented since we have not challenged the same as for 20 years we have just advertised and done whatever the municipality has told us to do. Now the corporation wants the smaller players to go and give the rights to the big players to create a monopoly which will lead to a lot of people losing their livelihood and for this, they are already coming up with a tender, which is definitely going to be challenged by the DOAA and competition commission of India since it is not going to be healthy for Delhi,” he adds.

Chaudhary explains that more and more economical large format units (apparently not complying to OAP-2007) being brought down every week. “We may see 80 per cent of such media assets getting effected. Then I’m told the unipole structures and other options on “Right of Way” would also need to be relocated if thorough compliance to the policy is to be implemented. All 3 Municipal bodies in Delhi would want to showcase maximum possible compliance of the OAP-2007 in their respective geographies before the next hearing in Early August before Hon’ble High Court and I don’t expect much relief before that. As a long term industry goal, the fraternity must work on amending the Policy with the municipal teams bringing enough and more premium inventories in OOH space. Not to mention the Government (both State and Centre) has been a major user of the OOH inventories along with Political Parties. I’m hopeful of an early solution only if Industry veterans bring about self-regulation and commit as a unified body of all stakeholders- read Media Owners, OOH agencies and Municipal/ Court Appointed teams. We are all losing the potential revenues with Municipalities being the largest looser of revenues,” he adds.

Outlook

Looking at a brighter side to the discussion, Pramod Bhandula, Executive Chairman, JCDecaux India says that the authorities are currently following the court orders and removing whatever oes against the OAP. In the process some of the asset owners have reported that their legal sites have also been affected as well which becomes a concern for the fraternity since it does not promote a healthy environment and the ecosystem starts to see this as an injustice to certain people. “By this month the court will take a decision and for the same the corporation is planning to make terms and conditions that will benefit the community and regulations that will be in line with the policy. I don’t have an idea if the policy itself will have any amendment or not but there is no authentic statement from the authority that they will make changes to the policy. Whatever stand the court will take, will affect the whole fraternity since we are all interconnected,” he adds.

Bhandula further says that the entire community is also being suffering with the ongoing issue which has happened because of a few players who had illegal media. “Only very few players indulged in illegal sites not everyone, but still they are facing the brunt. The serious players will grow and they will thrive after the decision is out. There is no question of consolidation like we talked about earlier this year; there are a lot of elements that are shifty. I think we are in a place where we need to go to the next level and consolidation is a dream word. I wish that right things will prevail and the authority will come out with good solutions that will be for the betterment of the city, aesthetics and the industry as well,” he adds.

According to Chaudhary, the good news however, is that both North and South MCDs have estimated a figure of Rs 100 crores annual revenue generation through OOH options in the city. “Such a steep target in the minds of bureaucrats and our municipal law makers comes as a strong support in an otherwise gloomy market with Real Estate brands hitting all time low in their share of voice in last 10 years or so. I am looking forward to Policy front Practical initiatives by the Municipal bodies in near future,” he appends.

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