Declaration of Phase III expansion has opened up prospects for investors to set up radio stations in smaller regions. In a way, it is good to see that all villages of India will be exposed to FM radio shortly. But many regional players are bidding for a radio station without even knowing the pros and cons of the business. Also, with number of stations increasing, retaining existing business share for regional players is a big question. Listed here are some challenges that a regional radio player faces. This will also work as a guide for the new entrants.
The issue of music royalty has been seen as a threat. Music royalty is increasing day by day and creating a major problem for regional radio players. Not only for Hindi songs, but also regional songs, the cost is always on an upward swing. If you don’t have a presence in more than one station, the music cost will stand before you as the biggest challenge.
There will be a huge flow of money due to open e-auction for the Phase III licences. The biggest challenge for new regional players would be to bear heavy investments to set up a station and then try to shorten the break-even period – which is the toughest thing to do.
Another major issue is the cost involved in running a radio station. Operating costs are increasing every fortnight. Rent to be paid to All India Radio (AIR) is also increasing. It is pretty difficult for regional players to survive with such costs and stay in competition.
Quality manpower is another major challenge. Not many experienced professionals are present in smaller areas and hence, radio stations are set up with people with minimal experience in the sector. The major problem is encountered with regional presenters/RJs. This creates a huge problem to deliver programmes up to the standard of any national player.
As a national player, if a programme is developed at any of the stations, it can be spread over to many other stations by which the production costs go down, but for regional players these costs are not shared. So regional players are always on the back foot with regard to content development for a single station.
To deliver qualitative programmes suited to listeners, research and development plays a big role. Cost involved in the process is huge. Generally, national players always involve their R&D team to know the tastes of the listeners and develop content accordingly. Due to heavy costs, regional players rarely go for any research. Without knowing listeners’ choice, offering good programming is a big challenge.
Lack of knowledge of a studio set-up, addressing transmission problems, etc., are other key challenges for the regional players. Also, it is tough to get good frequencies when the number of radio operators is increasing day by day.
[Monica Patnaik is Joint Managing Director, Eastern Media Ltd (Radio Choklate)]