Guest
Column
AROI looks to continue making waves with radio
Apurva Purohit, President, AROI and CEO, Radio City 91.1 FM
As
I speak today, the Association of Radio Operators for India (AROI),
the nation's apex body of radio broadcasters, is well into its second
successful year.
Since its institution in September 2007, the AROI has been striving
to secure the collective business interests of radio broadcasters in
India through a National Governing Board supported by four Regional
Governing Boards and a Board for Small Operators. We also have in place,
six Committees to individually address matters critical to the radio
business in India - namely, the Government Relations (Regulatory) Committee,
the Music Committee, the Internal Affairs Committee, the Radio Evangelising
Committee, the Financial Committee, and the Awards and Events Committee.
2008 has seen private FM in India striding over the cusp of growth to
truly become a national phenomenon. Due to various measures taken and
proposed by the Government, the medium has grown to employ over 6,000
people, reaching over 15 crore Indians in 91 cities. The allowance of
political advertising on radio has also removed a major impediment in
giving the radio industry a level playing field as compared to other
media in the country.
We know 2009 holds much promise for the private FM industry, and can
be a year that can propel this infotainment vertical into another league
altogether. As the central organisation for Indian radio broadcasters,
we at AROI are actively working towards making this a reality. To this
effect, we have identified a set of extremely critical issues, which
we will focus on addressing along with the Government this year. These
are:
1. Evangelizing radio
Our efforts towards securing business interests of radio broadcasters
are bearing fruition, thanks to the direct and collaborative contribution
of key stakeholders of individual radio businesses. Among our successes
in 2008 has been our first ever radio evangelizing campaign highlighting
the cost-effectiveness of radio as a public broadcasting medium, especially
for delivering localised messaging. In 2009, we plan to further build
on this campaign, taking it across various other media vehicles propagating
the merits of radio.
2. Resolving
the issue of music royalties
Next on the agenda for AROI in 2009 is to ensure the timely resolution
of discussions between FM broadcasters and music companies over music
royalties. This long pending matter has reached such a critical stage
that if not resolved, it may hamper the success of bidding for licenses
in the proposed Phase III. To ensure that this matter is resolved in
a manner mutually beneficial to both industries, we have approached
the Ministry of Information and Broadcast (MIB) and the Ministry of
Human Resources Development (MHRD) to mediate. It is expected that intervention
of these concerned ministries would help expedite the speedy resolution
of this issue, failing which the growth of the private FM radio industry
would continue to be hampered.
3. Invoking intervention
of regulatory authorities on Phase III
We have also approached the MIB requesting intervention and modifications
to the Government's stand on the proposed Phase III policy. Responding
to the TRAI's Phase III recommendations in February 2008, the Ministry
had presented its views in November 2008, seeking feedback from the
TRAI as well as the private FM operators on the same. In accordance,
we submitted a set of issues, which include allowing FM radio to source
news from all public and private registered broadcast channels, including
authorised news agencies for the first year, after which this could
be reviewed. Some of the modifications requested are that the lock-in
period for tradability of licenses be kept at one year instead of three
years. This move would encourage the launch of some more Phase II radio
stations, which have been stalled due to lack of funds. We have also
requested that the 10-year license period of broadcasters be extended
to 15 years with automatic renewal on same terms as the original on
expiry of the term.
4. Ensuring timely
collections and closure of pending dues to FM broadcasters
Another key issue that is cutting into cash flows of radio businesses,
especially in the current economic environment, is the delayed closing
of collections and receivables from advertisers and agencies. Among
our key objectives at AROI is to monitor and ensure timely settlement
of payments due to radio broadcasters from various entities. To ensure
that this happens while not affecting our relations with clients and
agencies, we have set up a Sub-Committee comprising Financial Heads
of key FM broadcasters. This Committee works together like one entity
to ensure that FM broadcasters receive their payments on time.
5. Ensuring an
internal self regulatory mechanism for radio via a content code developed
by the radio industry
We at AROI, like the Indian Broadcasting Foundation (IBF) and News Broadcasters'
Association (NBA), are intent on preparing our own content code for
self-regulation. To this effect, we had set up an Advisory Committee
for the creation of a self-regulatory Content Code in October 2007.
There have been developments in this direction and this matter is currently
in its final stages of discussions.
Today, Indian private FM is about 280-plus stations strong. This number
is likely to reach 800 stations with Phase III. These issues need to
be addressed on time, before the industry sets off on this four-fold
expansion. Especially given the current economic slowdown, the timely
resolution of each issue is very likely to have a critical impact on
the viability and growth of the FM radio business in India.
Thus, we at AROI are determined to jointly work together to further
the cause of radio as it sets off on the next stage of its expansion
and growth.
