NEW DELHI: The Ficci Radio Forum has sent a memorandum to the I&B ministry requesting wide ranging policy reforms for the industry, including licenses across the country and allowing news, and also asked it to resolve issue between the industry and the music industry.

Despite the Indian radio industry being a true mass medium, covering 97 per cent of the populace, available in 24 languages and 146 dialects, Ficci says it is facing a challenge from the Indian Performing Rights Society, IPRS and Phonographic Performance Ltd (PPL).
"This is jeopardising the sustenance of the industry and its future expansion and all of the government's plans with respect to Phase III could be rendered unviable if the government does not help resolve this issue."

The PPL represents the interests of the music companies and IPRS the rights of the music composers, lyricists and other artists.

Ficci says that while 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 inflexible in the terms they are setting for radio broadcasters.

"In the past, the two bodies have demanded as much as Rs 3,000 per needle hour from all broadcasters or 30 per cent 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 Ficci memorandum has pointed out.

The Forum has, therefore, recommended the following:

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 percentage could be in line with international norms which are in the range of 1-4 per cent of the annual revenues of a station (in most countries. In some countries, royalty per cent is zero to negligible)
Royalty fee should be fair and the same rates should be charged to AIR as well.
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
Eliminate advance payments & security deposits for Music Royalty.
The Forum has also emphasised 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 per cent. FDI norms as in case of terrestrial FM radio should be applicable to satellite radio in order to ensure a level playing field, Ficci has demanded.

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 are charged with 4 per cent revenue share of advertising. It is suggested, that the satellite licensee should also be charged a revenue sharing fee at 4 per cent for advertisement and 20 per cent for subscription.