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Private FM players seek licence fee rationalisation

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MUMBAI: Private FM players in the country are getting ready to pack their baggage and move on to fresh pastures. "We will not survive another year if the licensing structure is not rationalised", a sombre Sumantra Dutta told a panel discussion on "Radio - The Second Coming" during the latter half of the first day's sessions at FRAMES 2003.
 

Sounding warning bells, Dutta, COO of the Star backed Radio City that runs in Bangalore, Mumbai and Lucknow said that instead of a scorching pace that any new industry is expected to set, FM radio is instead registering negative growth.

The high licenses, that came into effect after a blistering bidding process three years ago, are killing the fledgling private FM players. "The media landscape is dominated by television and press. Twenty three parties had bid over Rs 4.25 billion for 108 frequencies in 40 cities in the initial process. Of these, only 10 paid their bank guarantees and only 37 frequencies are functional", radio City's Dutta pointed out.

"Radio as a medium develops revenues slowly, but the high license fees will not allow players the luxury of a slow build up," Dutta said. "Also, the growth rate of FM radio is directly proportional to how many radio stations are going to be set up in how many places," he added.

"Private FM could also help the government with its public service broadcasting agenda, if the licence structure could be replaced with a revenue sharing model soon," Dutta added.

"All the private FM players in Mumbai earn a revenue of Rs 22 million in a month, while the license fee outgo of all players is to the tune of Rs 264 million," Dutta pointed out, making it an unviable business model.

Radio Mirchi head A Parigi who moderated the proceedings, admitted that the players, despite the backing of established media houses, have been unable to lobby for a better revenue model with the government.

Mid day Multimedia MD Tariq Ansari, asked to speak about killer application for FM in India, said none existed.

"Programming made for the lowest common denominator brought in larger audiences but there is no market differentiation as everyone is just trying to outshout the other," Ansari noted.

"If a better revenue model were in place, different killer applications could be tried out including one that catered to the huge Marathi speaking populace; one that targeted old Hindi song loving audiences; or those who loved classical or devotional songs. In the absence of one, however, the very future of private FM in the country is bleak," Ansari said.

Veteran radio personality Ameen Sayani, who spoke on the introduction of community radio in the country said the government should have clearer guidelines on what the programming on community radio should consist of as well as on what is expected of community radio, and on the various revenue streams they could tap.

Programming on community radio could revolve around constructing a database of residents in the five kilometre area where community radio operates, explanation of laws and taxation, basic information about all religions in the country, as well as tips about reducing wastage in all forms.

Sony Music MD Shridhar Subramaniam said that while radio ought to be complementary to music, it is currently competitive, sharing a litigious often acrimonious relationship with radio players in the country. Radio has brought the fatigue element by playing the same records over and over, he pointed out.

Both Subramaniam and Ansari however agreed that both parties need to sit together and thrash out the issue of payment for music content used by private FM players.

 
Dollar rupee conversion rate: US$1 = Rs 47.66

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