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FICCI Radio Forum seeks level playing field for satellite and FM radio

26-December-2007
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FICCI Radio Forum seeks level playing field for satellite and FM radio

The FICCI Radio Forum has urged the Government to address some issues which it considers critical to maintain a high and sustainable growth of the radio industry in the country. The Forum has chalked out 6-7 issues that need attention from the Government for the betterment of the radio medium and has also given some suggestions for resolving them.

Stressing on the need to release additional frequencies in all markets and allow broadcasters to operate multiple frequencies in the same city, the Forum observed that India being a multi-linguistic country, there was adequate room in every city/town to have multiple FM channels catering to different sections of the population. Moreover, given the technology and distribution modes today, it was unlikely that any company or media could influence public opinion of listeners / readers / viewers as they had unlimited access to multiple sources for obtaining information, education and entertainment.

In this context, the FICCI Radio Forum has made certain suggestions, including the proposal to have no national limits for FM radio ownership; increase local (city-specific) limits to 3 per cent or 33 per cent of the total licenses available in the center, whichever is less. The second frequency may be mandated to be of a different format than the first one and the broadcaster can be mandated to choose a format that is different for the second frequency from his existing frequency in the same town.

Citing the telecom industry’s example, the Forum has urged the Government to allow the FM industry the freedom and flexibility that a business needs by allowing transferability and tradability of licences.

Noting that private radio is the only mass medium that is not offering news and current affairs as part of its programming, the FICCI Forum has proposed 6-8 minutes per hour of news and current affairs to be broadcast on FM radio under ‘general entertainment’ license, in addition to allowing news and current affairs stations.

Elaborating more on the challenge faced by the FM radio industry from the Indian Performing Rights Society (IPRS) and Phonographic Performance Ltd (PPL) in issues relating to music royalties, the Forum has requested the Government to fix a reasonable and appropriate fee for music royalty. The revenue sharing model and fixed fee model has been further elaborated in the memorandum submitted.

The Forum has also emphasised on the need to create level playing policies for satellite radio and FM radio. At present, there are no FDI limits for satellite radio, whereas FDI limit for FM radio is 20 per cent. FDI norms as in case of terrestrial FM radio should be applicable to satellite radio in order to ensure a level playing field.

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

The licenses for terrestrial FM radio are for a period of 10 years without any automatic extension, the Forum has requested to follow the same principle for satellite radio as well. It has also suggested that terrestrial repeaters should not be permitted for satellite radio. Repeaters would act as networked broadcasts allowing simultaneous broadcast of programmes by the same licensee on different frequencies or by different licensees. Networking implies connectivity between radio stations – real time through satellite or telecom networks. Licensees for FM radio are not permitted to network. The same should apply to satellite broadcasters.

Also see:

FM radio losing sheen due to lack of content diversity: FICCI Radio Forum

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