A day after media reports suggested that the FM radio industry and the music industry had reached an ‘out-of-court settlement’ over music royalty payments, the Association of Radio Operators of India (AROI), the industry body of the FM Radio players, strongly denied the report.
“No such agreement has been reached with the music industry. AROI had appointed a committee, which already had three meetings with music industry representatives like PPL, IPRS and IMI. But AROI feels that the demand from the music industry on the issue is extremely exorbitant. Stations such as Daman, Itanagar, Muzaffarpur, Agartala, Aizawl, Kohima, Rourkela, and Siliguri will not have yearly revenue more than Rs 50 lakh per year. How will they be able to pay exorbitant fees of Rs 2 crore per year,” asked Rajiv Mishra, Convenor, AROI.
Mishra further informed that PPL was demanding Rs 2,400 per hour and IPRS Rs 958 per hour as royalty fees. The report claimed that a consensus had been reached for payment of a slab-based pricing for Tier I, II and III cities in the range of Rs 700 and Rs 1,400 per hour.
When asked what proposal the FM radio body had put before the music industry, Mishra said that the body had proposed payment of 1-4 per cent revenue as music royalties, which was a global phenomenon. “In India, too, we have to follow the same benchmark otherwise Phase II expansion of FM radio will meet the same fate as that of Phase I. If the music industry does not understand the ground reality then FM radio license holders, particularly from smaller towns, will have no option than to return the licenses to the Government of India as this will not make any business sense to them,” Mishra added.
Brushing aside apprehensions of the music industry that it would face increased losses owing to the 337 new FM stations in 91 cities in the Phase II expansion of FM radio, Mishra held that the booming radio industry might just become an assured source of income for the music industry.
“If the music industry agrees to our proposal of royalty fee based on revenue from a particular station, then it will become an assured source of income for the industry. Globally, there is no statistics that shows that music industry has suffered due to the radio industry. Rather, the music industry will receive extra income through the royalty payment from music lovers who don’t buy music,” Mishra observed.