With its Siliguri launch in October, Sun Network's SFM has its presence across 43 stations and would be largest network after its remaining two stations (Aizawl and Gangtok) become operational. In an interview with Radioandmusic.com's Anita Iyer, SFM 93.5 Project head Nisha Narayanan converses about the issues like royalty, independent news, political ads in the radio sector, challenges of radio in small towns and the SFM's plan for the year 2009.

1. SFM has launched in metros as well as the small towns. How innovative has SFM being in smaller markets?

Much of the programming in metros is admittedly mass market, but there is ample scope for innovation in smaller markets. In metros, we have five to six shows in a day; but we can push up to 16 shows per day in smaller cities and towns. More shows in a day offer a refreshing variety for listeners and give space for more RJs and innovative programming.

In smaller towns, we go local and discuss issues that affect the common man for whom radio is an important part of their lives. Our RJs talk more about locally and socially relevant subjects and the music is also regional with a small percentage of Bollywood or other mainstream film songs. In our new Pune station, for instance, we have more of Marathi and less of Hindi talk and songs.

2. What are the hurdles that hamper development of growth of radio in the small markets?

In smaller towns, we are presently in the concept setting phase, when we have to introduce radio as a medium to the listeners. In metros, commercial radio is about six years old but our smaller towns are still virgin markets. Local advertisers in these towns are not open to investing in radio as they don't realize the potential of the medium. Also, the local music industry is not organised like IMI or SIMCA, so we usually have to approach these labels individually and ask them for their music. The other problems in small towns are lack of power, poor infrastructure, limited professional talent etc.

3. After SFM launch in Siliguri, only Aizawl and Gangtok are left. When are they scheduled to be launched?

In Aizwal, SFM will be the only commercial radio station in this phase, and so we have to start from the stage of concept setting. The power supply situation in this region is very erratic, so we still looking for solutions to this, and other infrastructure problems.
We will be launching our Gangtok station in a few weeks from now and Aizwal will be launched early next year. In both these stations, we will be carrying forward our policy of being regional. Radio is about the familiar, about reflecting the community, and the beauty of FM is that it is local and reflects the flavour of the region it belongs to.

4. Do you market extensively in these small towns?

In small towns, especially in the north east, it is said that the culture and ethos change every ten kilometers, and we try to ensure that our programming reflects this change. The listeners have strong community links in these areas and word of mouth usually works better than any advertising gimmick.

5. What would be the music content for your upcoming stations?

For our upcoming station in Aizwal, we will be playing lot of Mizo music, like we play Khasi music in Shillong. The RJs, of course, will speak in the local language rather than Hindi and we will probably not play any Bollywood songs. We have carried out extensive research before launching these stations and we have found that there is no market for Bollywood music in most parts of the North East. In Gangtok, we will be playing a mix of English tracks and local music.

6. For SFM, where does the majority of ad revenue come from?

Retail advertising is still picking up and it will take time for it to dominate our revenue model. At the moment, our revenue source remains predominantly national. Media buyers are now looking at radio as a viable and attractive medium today and there are research figures available with radio stations to establish their listenership and popularity. However, it will take a while before retail advertising becomes strong for radio.

7. Were radio stations keen on getting clearance for political ads than getting independent news?

I wish the government had permitted independent news on radio before they allowed political advertisements. Allowing political ads without allowing independent news shows a skewed sense of priorities, and it doesn't serve the public interest. However, allowing political ads on radio is a positive, though long overdue development.

So, while we commend the I&B Ministry for giving their nod to political ads, we are hopeful that they will also overcome their misplaced resistance to allowing independent news on radio.

8. Does permitting political ads on radio mean additional revenues for radio? How much does SFM expect from political advertising this year?

I have seen figures of anything between Rs.60 to Rs.120 crores being put forward as the kind of revenues that FM radio could earn through political advertisements by the general elections. SFM being the largest private FM network in the country, one can logically assume that a fair slice of revenue from political ads would come to us, but I can't share any figures right now.

9. Is there a need for code of conduct for political ads?

Political ads are approved by the Election Commission before they go on air. Even when the Supreme Court permitted political advertisements on TV, they had insisted on a number of regulatory measures and similar vetting procedures have been put in place for radio as well. In any case, there are enough provisions in the existing programme and advertising codes, as well as our civil laws, to prevent libel and mud-slinging. Also radio broadcasters have their own codes of conduct for what's permissible and what's not, so I don't foresee any problems with political ads.

10. What is your take on only agency news being allowed on radio?

It's wrong to say that only agency news will be allowed on radio. It is worse than that: the current view in the I&B Ministry is that only AIR and DD news should be allowed on radio. The idea that a couple of hundred private radio channels should become relay centres for AIR news is very questionable, to say the least, and hugely restrictive of radio's freedom. Prasar Bharati is a notionally autonomous corporation, and its news is managed by Information Service officers of the Indian civil service. In an election year, the kind of sarkari news coverage provided by AIR is likely to be extremely coloured, and this obviously has all sorts of political implications.

Besides, AIR's record of local news coverage is terrible. Private companies have radio stations in 87 cities already, and this could go up by another 200 or more in the next phase of FM licensing. AIR, though, has barely 44 news rooms. It would be quite impossible to source local or locally relevant news from AIR or DD bulletins for most of these 300 or so FM cities. The chances are that all FM stations will end up broadcasting exactly the same sort of anodyne, The Vice President of Kazhakhstan today signed an MoU with the Minister of State for Textiles …... kind of news that's broadcast over AIR, which has hardly any significance, and certainly no local colour or local relevance. The FM channels would have no editorial control whatsoever.

11. What is the radio sector expecting from Phase 3?

For one, we are expecting a somewhat more liberal licensing regime. Personally, I would like a change in the licensing policy for neglected regions like the north east which will encourage more regional players to enter the industry, like in the south where there are many regional players rather than �national' ones. We were hoping for district-wise licensing, possibly as part of a three tier licensing system. We are expecting multiple licenses in each city, rather than the single license per player per city mandated in the earlier policy. We hope the restrictions on networking will be lifted and the 15% cap on ownership of licenses across India will be raised.

In the Phase 3 of FM licensing, there is need for a more enabling policy which is not regulatory and restrictive in approach, but which facilitates further growth of the radio industry. From what we have seen of TRAI's recommendations and the I&B Ministry's responses, Phase 3 looks fairly promising, but issues like tradability of licenses, music royalties, clearance for independent news etc have yet to be addressed.

12. SFM has started airing ads on Sun TV? Do you plan to advertise other mediums as well?

This year, SFM was busy launching stations and now that almost all our frequencies are operational, we are set to consolidate them and take them to No. 1 position next year. We have started advertising on Sun TV and will be using other media like print as well. Also, we will be doing a lot of brand activations in the coming year, as outdoors is the most effective way of being visible on ground.

13. How do you see SFM channels shaping up in the year ahead? As almost all stations have been launched now, when you foresee break even at these stations?

In financial terms, we don't see each station as a stand-alone channel but as part of a group. Rather than breaking even on each individual station, we are looking at returns on the group as a whole, and we'll certainly drive to be No. 1 at most places next year.