NEW DELHI: While the number of FM Channels in the country has grown from ten to more than 200, the penetration of radio has only risen marginally from 45 to 53 per cent since the channels are not able to give creative programming in the absence of permission to broadcast news and current affairs.

The Federation of Indian Chambers of Commerce and Industry (Ficci) has in a memorandum to the Information and Broadcasting Ministry again reiterated the need to permit these channels to broadcast news and current affairs since the lack of diversity in content 'is leading to disenchantment among audiences'.
The Ficci Radio Forum says that with FM channels only 'dishing out Bollywood-centric music bereft of other forms of entertainment and news and current affairs programmes' may result in stumping the growth of the radio industry which has been experiencing a CAGR of 28%. An 8% rise (number of listeners as a percentage of the population) was definitely not commensurate with the large increase in the number of radio stations, the Forum said, adding that in order to create a larger audience base for FM radio, diversity in content has to be significantly higher than at present.

But 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 Forum has said 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 6 to 8 minutes per hour of news and current affairs to be broadcast 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: 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 Forum has urged the government to also consider some other benefits which are critical to maintain a high and sustainable growth of the radio industry. These include the need to release additional frequencies in all markets; allow broadcasters to operate multiple frequencies in the same city, permit tradability of licenses, raise the foreign investment ceiling for radio broadcasting, and ensure a level-playing field for satellite and FM radio since there is no FDI limit for the former, but a ceiling of twenty per cent for the latter.

There should be automatic renewal of licenses at the end of the initial term of the license, and an early resolution of the issue of music royalties.

The Forum says any broadcaster should be allowed to own multiple licenses in a city. This is the definitive way to ensure diversity of content for listeners. '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. Furthermore, 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' the Forum opines.

The Forum says there should be no national limits for FM radio ownership and the local (city-specific) limits should be increased from 3 or 33% of the total licenses available in the centre, whichever is less. This was in line with the recommendations of the Dr Amit Mitra Committee – which had been endorsed by TRAI

Noting that the second frequency may be mandated to be of a different format than the first one, the Forum suggests some possible parameters to develop formats in radio. These include Era of music, Language of music, Genre of music, News & Current affairs (any language), and type of radio - talk, music etc.

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. Even in the case of radio, the Government must allow transferability & tradability of licences. 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 Indian Radio industry, which is truly a mass medium in India covering 97 per cent of the populace and is 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.

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. It is felt that radio broadcasters need to pay royalties only to PPL and not to IPRS but 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 fixation of 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)

The Royalty fee should be fair and the same rates should be charged to AIR as well. There is need to either have a single collection agency for Music rights fee or develop a mechanism where one-rate is applicable to all agencies or royalty collection bodies. Advance payments and security deposits for Music Royalty should be eliminated.

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

The Forum says that the principle of satellite radio should be followed as far as automatic extension of licenses for terrestrial FM radio (now for a period of 10 years) is concerned.