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Revenue sharing to improve financial viability: FM radio companies

28-June-2002
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Revenue sharing to improve financial viability: FM radio companies

Indian FM radio companies think that a migration from licence fee to revenue sharing in the government’s policy would improve the financial viability of the sector. According to them the present stringent policy guidelines makes it difficult for the companies to operate a profitable business venture.

According to senior official in Zee Telefilms, they decided to exit the business as they found that the policy guidelines were not viable at all. The company will look at the sector only if there is a change in the policy. Zee had also appealed for refund of the earnest money deposit (EMD) and advance licence fee amounting to less than Rs 10 crore.

Nishchint Chawla, chief operating officer, Radio Today (an India Today Group venture), said, “It is true that the policy of auctioning has resulted in high bidding. I think that changes in policy keeping in mind evolving a conducive business environment is always welcome. We will formulate our strategy once we study the detailed policy guidelines.” According to him, the government needs to be very careful while implementing the revenue sharing model.”

According to a senior executive with Radio Mid-Day, “If the government changes the policy by allowing revenue share instead of the present licence fee, the situation in which the companies operate will improve. It will also offer companies a level playing field. The high licence fee and the bidding system will make it difficult for the smaller companies to operate.” Radio Mid-Day will take a view on the new policy after closely studying it.

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