Monday, June 01, 2009

FM players’ wishlist for Ambika Soni includes news, multiple frequencies and FDI hike

A lot is expected from Ambika Soni, the new Information and Broadcasting Minister, as she takes charge. The media industry is looking forward to some positive developments during her tenure and some definitive decisions on several issues. exchange4media speaks to leading FM players to find out what’s there on their wishlist for the Minister.

Prashant Panday, CEO, Radio Mirchi:

1) We seek the implementation of Phase III of radio reforms. The policy has been ready for some time and it can be pushed through immediately. The Government must, however, delay the portion of Phase III policy which relates to auctions of new cities till the time that the problems of music royalty can be settled. All other reforms as envisaged in the policy should be implemented at the earliest.

2) With respect to the satellite radio policy, the Government must re-look the matter. There is no gain in hurrying through with a policy that can lead to the total destruction of the nascent FM radio industry. Specially, the provision of terrestrial repeaters being considered should be dropped. Additionally, any disparity that exists between satellite radio policy and FM policy must be bridged, specifically: a) FDI limit must be the same; b) OTEF charged to satellite broadcasters must be much higher than currently conceived. With a national reach, satellite radio impacts the fortunes of the Entire FM radio industry.

3) The AROI has been petitioning the Ministry to look into the costs that Prasar Bharti charges private FM operators, be it the rentals for its towers or its land. These are way higher than market rates and are proving to be a big burden for the industry.

4) The Government has recently empanelled many FM stations in many towns. However, this exercise is still not completed and many of the smaller stations are still not empanelled. Besides, the rates the DAVP has offered – in many cases – are way too low. They need to be re-looked.

5) Given the severe economic slowdown, especially in the media and entertainment space, the Government must look at giving the FM industry a moratorium on license fee payments for the next 2-3 years (or till the downturn eases). At the same time, the Government must look at extending the period of the license to 15 years from the present 10 years – the Government knows perfectly well how badly the FM industry is doing – this act of the Government will help in bringing some semblance of profitability to the FM industry, if not now, then at least in the long term.

Tarun Katial, COO, Big FM:

For the radio industry, we are hoping to see news and current affairs open up, live sport coverage being allowed, multiple frequencies per city, which is another huge opportunity for growth of the category in India. In addition, we are hoping for the removal of service tax, and finally an increase in the FDI limit will help. The industry has been actively lobbying with the Government to make this happen at the earliest and we are very optimistic.

S Keerthivasan, Business Head, Fever FM:

Foreign direct investment (FDI) cap should be raised to 74 per cent from the low level of 20 per cent currently. The industry needs investment and there is no justification for the low level of FDI currently allowed.

The Government should allow consolidation in the industry. The restriction that radio licenses cannot be transferred for five years must be done away with. At least one more frequency should be allowed per operator per city. This will enable differentiation of content on radio.

News and current affairs should be allowed on radio. This is critical for a vibrant media and the growth and relevance of radio as a medium of mass communication. The full potential of radio will be unleashed only when news is allowed.

Prasar Bharti should reduce infrastructure rents. BECIL (Broadcast Engineering Consultants India Ltd), which has been mandated to build common infrastructure by the Government, has done a shoddy job after collecting a good amount of money from all radio stations. More accountability should be brought into these matters.

We need a resolution and clear guidelines on the music royalty issue. Currently, we are paying royalty to the Indian Performing Right Society Ltd and the Phonographic Performance Ltd (one is an association of music labels and the other, that of artists). Music companies are taking advantage of the lack of clarity and are armtwisting radio companies. Royalty rates should also be in line with revenue potential.

The Government currently levies 4 per cent of gross annual revenues as license fee. This is hefty for an industry that is at infancy and is bleeding currently. This should be waived off at least for a few years till the industry reaches maturity and gains strength as a media platform. AM should be opened up for private players. This will vastly improve reach and quality of broadcasting and help create truly national players in the radio industry.

DAVP rates should be brought in line with commercial ad rates. The Government charges us commercial rates for infrastructure. We pay huge amount of license fee, bidding prices were decided by market forces and we get no subsidy whatsoever from the Government. So, I don’t see why the Government should get special ad rates from the industry.

Harrish Bhatia, COO, My FM:

Our foremost expectation is an expedited announcement of the third phase of licensing and the resolution of the high cost of music royalties. We are also very keen on allowance for broadcast news and current affairs from the internal media house sources, along with permission to broadcast sports, as these measures will boost the medium and will diversify our audience base as well. Lastly, our wishlist includes a resolution of the high fixed cost of services of Prasar Bharti and also an increase in FDI limits, which will provide huge financial support pillars to the medium.

The Rs 750-crore Indian radio industry has a long list of what its wishes from the newly-formed UPA Government. Allowing news and current affairs, resolution of the music royalty issue, multiple frequencies, FDI hike top this wishlist. Now, over to the new I&B Minister...
© exchange4media 2009 Robin Thomas June 01 2009