Bollywood powers FM; no content diversity


    MUMBAI: According FICCI Radio Forum, the lack of diversity in content in FM channels, which are dishing out Bollywood-centric music, bereft of other forms of entertainment and news and current affairs pogrammes, is leading to disenchantment among audiences.

    This is evident from the fact that while the number of FM radio channels has grown from 10 to more than 200, the penetration of radio — number of listeners as a percentage of the population– has only risen from 45 percent to 53 percent. This trend, says the FICCI Radio Forum, may stump the growth of the radio industry which has being experiencing a CAGR of 28percent.

    In a memorandum to the Ministry of Information and Broadcasting, the FICCI Radio Forum has pointed out that while the radio industry has witnessed rapid growth, in terms of advertising revenues as well as in terms of the funds generated for the government, there has not been significant growth in the listenership numbers.

    Even this limited growth in listenership has happened more on account of growth in geographical coverage i.e. establishment of new FM stations as part of government’s Phase II initiative. Overall, however, while the number of FM radio channels has grown from 10 to more than 200, the penetration of radio (number of listeners as a percentage of the population) has only risen from 45 to 53 percent. An 8 percent rise is definitely not commensurate with the large increase in the number of radio stations. In order to create a larger audience base for FM radio, diversity in content has to be significantly higher than at present.

     With appropriate policies, the reach of the medium can be much larger than TV, especially given the fact that it is a free-to-air medium unlike television, cable, or other services that demand subscription charges, the FICCI forum has stated.

     The FICCI Radio Forum has urged the government to address the following issues which it considers critical to maintain a high and sustainable growth of the radio industry:

     1) Need to release additional frequencies in all markets; allow broadcasters to operate multiple frequencies in the same city.

    2) Tradability of licenses

    3) Automatic renewal of licenses at the end of the initial term of the license.

    4) News and current affairs in radio programming

    5) Facilitate resolution of music royalties issue

    6) Absence of level playing field – satellite radio and FM radio

    7) Raise the FDI ceiling for radio broadcasting

     The forum has called for release additional frequencies in all markets and allow multiple frequency ownership. Any broadcaster should be allowed to own multiple licenses in a city. This is the definitive way to ensure diversity of content for listeners. The government needs to take a progressive view on this subject in the context of the ground realities. Today, given the technology and distribution modes it is unlikely that any company or media can influence public opinion of listeners/readers/viewers as they have unlimited access to multiple sources for obtaining information, education and entertainment. Further, a blanket restriction on the number of channels of a broadcaster will discourage diversity of viewpoints. India being a multi-linguistic country, there is adequate room in every city/town to have multiple FM channels catering to different sections of the population.

     In this context, the FICCI Radio Forum has made the following suggestion to the Ministry:

    1) No national limits for FM radio ownership

    2) Increase local (city-specific) limits to 3 or 33 percent of the total licenses available in the center, whichever is less. This is in line with the recommendations of the Dr. Amit Mitra Committee – which has been endorsed by TRAI.

    3) The second frequency may be mandated to be of a different format than the first one. Some possible parameters to develop formats in radio are:

    –         Era of music: Top 40s, contemporary, 1990s, near-retro (70s, 80s), retro (pre-70s)
    –         Language of music: English, Hindi, regional
    –         Genre of music: pop, rock, Love, Dance, classical etc.
    –         News and current affairs (any language)
    –         Type of radio: talk, music

    The broadcaster can be mandated to choose a format that is different for the second frequency from his existing frequency in the same town, the forum has pointed out.

    The government must allow the FM industry the freedom and flexibility that a business needs. Acquisitions and sale of businesses is an integral part of the normal growth pattern of any industry. Even in telecom where the telcos use government spectrum, they are allowed to buy and sell companies. The spectrum can be sold and bought as part of the business transaction. Even in the case of radio the Government must allow transferability and tradability of licenses. This will ensure that there is an exit route for a company in case it faces losses and the listener interest is protected by ensuring continuity of service. This would also ensure that there is no administrative and financial burden on the Government to keep periodically auctioning the same license during the tenure of license.

    The forum has called for allowing automatic renewal of licenses at the end of the initial term of the licenses as was done earlier and is the international norm.

    The FICCI Radio Forum has stated that private FM radio broadcasters are not allowed to broadcast news and current Affairs. This makes private radio the only mass medium not offering news and current affairs as part of its programming. TV, Newspapers and Internet service providers are all allowed to broadcast news.

    It has suggested allowing six to 8 minutes per hour of news and current affairs to be broadcasted on FM radio under ‘general entertainment’ license in addition to allowing news & current affairs stations; since news and current affairs helps to fulfill all the three objectives of the Government viz, FM broadcasting for entertainment, education and information; to make available quality programmes with a localized flavor and to supplement the services of All India Radio (AIR)

    The Indian Radio industry, which is truly a mass medium in India, covering 97 per cent of the populace, available in 24 languages and 146 dialects, is facing a challenge from the Indian Performing Rights Society, IPRS and Phonographic Performance Ltd (PPL). This is jeopardizing the sustenance of the industry and its future expansion. All of the government’s plans with respect to Phase III could be rendered unviable if the government does not help resolve this issue.

    As is well known, PPL represents the interests of the music companies and IPRS the rights of the music composers, lyricists and other artists. In theory, the two bodies should have different memberships, but in India, the reality is that the same people are members of both the bodies. There is a serious view that radio broadcasters need to pay royalties only to PPL and not to IPRS. However, the reality is that both bodies are being extremely demanding and un-flexible in the terms they are setting for radio broadcasters. In the past, the two bodies have demanded as much as Rs 3000 per needle hour from all broadcasters or 30% of their revenues, whichever is higher. They are not willing to have different rates for small and big cities, or for small and big stations.

    The forum has therefore recommended the following:

    1) Fix a reasonable and appropriate fee for music royalty. Either a fixed fee (not related to revenues) or a revenue-share formula could be used. In case of fixed royalties, there should be concessions given for small towns, older music, time of broadcast and size of radio broadcaster. In case of revenue share formula, the % could be in line with international norms which are in the range of 1-4% of the annual revenues of a station (in most countries. In some countries, royalty per cent is zero to negligible)

    2) Royalty fee should be fair and the same rates should be charged to AIR as well.

    3) Need either a single collection agency for music rights fee or develop a mechanism where one-rate is applicable to all agencies or royalty collection bodies

    4) Eliminate advance payments and security deposits for music royalty.

    The forum has also emphasized the need to create level-playing policies between satellite radio and FM radio. At present there are no FDI limits for satellite radio, whereas FDI limit for FM radio is 20 percent FDI norms as in case of terrestrial FM radio should be applicable to satellite radio in order to ensure a level playing field.

    As for entry fee / license fee and revenue share from satellite operators, the forum has stated that satellite radio has two revenue streams – advertisement and subscription. Around the world, both models of revenue generation are used by operators. FM radio has only one revenue stream (advertising) and is charged with 4 percent revenue share of advertising. It is suggested, that the satellite licensee should also be charged a revenue sharing fee at 4 percent for advertisement and 20 percent for subscription.

    Licenses for terrestrial FM radio are for a period of 10 years without any automatic extension, our request is to follow the same principle for satellite radio.

    It has also suggested that terrestrial repeaters should not be permitted for satellite radio. Repeaters would act as networked broadcasts allowing simultaneous broadcast of programs by the same licensee on different frequencies or by different licensees. Networking implies connectivity between radio stations – real time through satellite or telecom networks. Licensees for FM radio are not permitted to network. The same should apply to satellite broadcasters. Therefore, it is requested that repeaters should not be allowed for satellite broadcasters in India.