How Modi can shake the FM business out of imposed inertia

Apurva Purohit, CEO, MBPL (Radio City), makes a compelling case for the new govt to do away with the massive policy paralysis that deters the nationwide growth of radio industry

e4m by Apurva Purohit
Published: May 29, 2014 8:11 AM  | 5 min read
How Modi can shake the FM business out of imposed inertia

When anybody points out the huge challenges that face Mr Modi and his government as they take charge of the nation, informing me fatalistically that we must either lower our expectations or wait to be disillusioned, I present  three simple lessons  to them which I have learnt after 25 years of working and 15 years of running various large and small organizations;

1. Great implementation skills invariably lead to great success:  It is a fact carved in stone that people who are good implementers can and will make a positive change in any environment and with any task however unimaginably tough it may be.

I don’t know how many of you remember, but in the years preceding the previous Lok Sabha elections of 2009 the media was abuzz with stories of how Rahul Gandhi had based himself in UP and taken upon himself the mantle of turning around the fortunes of the Congress in that state and a UP sweep would firmly establish his credentials, both as a leader and a grassroots implementer. After all that effort and the might of the Congress machinery behind him and the overarching advantage of the UPA winning the general elections, what happened? I think the Congress won just 21 seats in UP, up from 9 in the previous elections! Not enough to make an impact and certainly not enough to be showcased as a great performance of their leader’s personal efforts. The same task was picked up by Mr Modi this time and what a sweep in UP it has been. That’s great implementation!

2. Scale does not matter: The issues facing a small organization are exactly the same as those facing a large organization except multiplied ten times over. If he has figured out how to run a state efficiently and effectively, I see no reason why he cannot run the nation as effectively by applying the same principles that gave him success in Gujarat.

3. When you are starting from zero base everything you do is a step forward: Given that the previous government had completely stopped working approximately three years ago, all it requires is for the NDA to do something, anything; Come to office every day, clear pending files, solve existing policy bottlenecks. That itself will be a huge step forward!

This brings me to what Mr Modi and his government can and must do for the radio industry.

As has happened everywhere, the FM industry too has been a victim of a policy paralysis which has caused the stagnation of a hitherto vibrant medium. In July 2011, the government finalized Phase III of the expansion of FM in the country. This envisaged approximately 840 FM licenses being awarded in nearly 300 more cities, it allowed news to be carried on air (albeit in a limited manner), networking and ability for players to own multiple licenses in a city.

What would this have done for all the constituents?

1. Created about 12000 - 16000 more jobs in the market, largely in small towns.
2. Taken the reach of the only medium which is free for the consumer, to around 80 per cent of India, from the current 40 per cent.
3. Provided an opportunity for small traders and retailers in these 300 towns to advertise on a cost effective medium and thereby expand their businesses by reaching out to new consumers.
4. Added approximately Rs 1600 crore to the government’s coffers through the auction and license fees.
5. Given an opportunity for the FM industry to compete on a level playing field with other media like TV and print, by removing the artificial constraints imposed on it which don’t exist for other media which have far more freedom in running their businesses.

While the industry waited interminably for the government to progress the deregulation and expansion, another gloom filled spectre raised its head, namely the players who have been operating licenses from Phase I onwards and in fact are the pioneers of the medium, would be witnessing the end of their license periods in March 2015, less than a year away. Recognizing the stress this would put, not only on the viability of the current businesses but also the risk appetite investors would have to participate in Phase III auctions, TRAI recommended a formula for the current players to migrate into Phase III and get an extension . It was the general view of all concerned that the formula was tough but fair to the players and to the government.  That again has been languishing in the dusty corridors of Shastri Bhavan while March 31st 2015 approaches closer, one day at a time.

Like the rest of India in the last decade, the FM industry is yet another tragic story of lost opportunities and groundbreaking chances being thrown away because of the callousness of a non-functioning, self-serving political leadership. A young man wrote to me a few years ago from a small town; it was an impassioned plea to start an FM station in his hometown since he was desperate to be part of the medium which he truly believed was his calling. What could I say? That as a head of a leading radio network I had no control in expanding my business and had to wait for the day when the government in its wisdom would allow me to do so? So I didn’t reply to him and thereafter got several letters from him which increasingly became more and more accusatory in nature, vilifying me for being an obstacle to his chances to become a radio professional.

Mr Modi, you have witnessed first-hand the power this medium has, to move millions and its ability to connect and create a positive impact in their lives through your own party’s campaigns. Imagine what it can achieve if it reaches our entire nation, rather than just a small part of it. Imagine how it can change the life of that young boy and several thousand like him, if it is made accessible to all.

And guess what? All that requires to be done is one signature on the policy document and the TRAI recommendations that are ready and waiting to be signed for the past three years!

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