It's FM all around as Radio gets wired for sound

The radio sector has been witnessing a lot of activities in the last few months, with the bidding process for the second phase of FM expansion over just a month back. It is one media sector that is awaiting lot of discussion and focus during the FICCI Frames 2006. Though, FM privatisation in 2000 saw many aspirants bidding enthusiastically for the licenses, only a few actually entered the space because of the glitches in government policies like the high license fee regime. However, after almost five years, the government relented on the license fee regime and has shifted to the 4 per cent revenue sharing model. This means, earlier when a private broadcaster was earning Rs 12-15 crore annually, he had to pay Rs 8-10 crore as license fee, but now, according to the new policy, he will have to pay only Rs 40-60 lakh. “Yes, radio is on its way to become a separate industry, and we were looking for this shift,” said Tapas Sen, Executive Vice-President, Programming, Radio Mirchi.

That was 2005. And 2006 has brought even more cheer to the industry with the government opening the platform by calling for bids for 330 new stations in 91 cities. While leaders like Radio Mirchi, Radio City, India Today group (for its new FM venture after it sold out Red FM to NDTV, Astro and Value Labs) have again emerged out as the highest gainers. Other companies, which have emerged as big players, include Ambani-owned Adlabs, Sun group with Kal Radio and South Asia FM, Zee owned-Pan Asia, Synergy Media and BAG Infotainment.

In fact, all FM players who have bagged licenses in the second phase have come together to take care of the interests of radio players by forming an All India Radio Operators Association of India. Besides this, a consortium of small players has also been formed by BAG Infotainment. “It will be a dream for smaller players to get good RJs and well-known TV anchors to host their programmes. As prevalent in the West, we will license some of our programmes to these stations, which they could get only for 15-20 per cent of the total production cost,” said BAG Films Project Head Rajiv Mishra.

It’s the time for the Rs 250 crore radio industry to take a leap ahead and rise above its 2 per cent share of the total Rs 11,915 crore advertising pie. As a way forward, after the season of aggressive action, a clearer picture will emerge by the year-end when most players would have set up their stations. For listeners, it certainly is a win-win situation. Players expect their stations to come up latest by December 2006 or January 2007. K P Verma, Managing Director, BECIL averred, “In seven cities, including the four metros and Hyderabad, Bangalore and Jaipur, the stations can start operations by June-July 2006, where the players have to co-locate. In simpler terms, everybody has to start transmission through the tower of Prasar Bharti.”

Reflecting these important changes in the radio sector FICCI Frames 2006 has lined up several big players to throw light on the sector. One of the panel speakers who will be discussing the future of radio sector is A P Parigi, CEO, Radio Mirchi, who felt, “FICCI Frames has come at a right time in analysing the future and showcasing the media and entertainment (M&E) industry at a very smart and dynamic platform. It is an event that has created the B2B platform and is a place of media convergence.”