'With no subscription revenue, radio needs aid during COVID-19 pandemic'

Radio industry experts elaborate on the appeal made by AROI to the government to restore economic stability, and the challenges they are enduring due to the COVID-19 pandemic

e4m by Noel Dsouza
Updated: Mar 25, 2020 9:43 AM
Radio Mic

The Association of Radio Operators for India (AROI) last Saturday, appealed to the government to provide a bailout package to help the industry grapple with the coronavirus outbreak and the disruption it has led to economically. The statement was issued by Anurradha Prasad Shukla, the President of AROI.

The FM Radio business was already reeling under the effects of the economic slowdown and consequent cut in ad spends by advertisers including the Government. Most players have expected to degrow by 20% this financial year.

AROI, the body of private FM channels, has asked the Ministry of Information and Broadcasting to grant concessions since the industry has been losing out on advertising revenues for a year now. AROI has said with the services sector battling the COVID-19 crisis, advertising spends had been cut to a large extent. The industry body has asked for a three-pronged bailout package which is: increased spending from the government front, clearing overdue outstanding payments and lastly to defray costs.

Abraham Thomas, CEO, Big FM, FM Radio says that at a time when all other media platforms are battling with challenges of fake news, content creation, and production due to the lockdown, Radio is the only true ‘free to air’ medium, which is live 24x7, local, credible and trusted. This crisis has once again demonstrated the true Power of Radio.

Thomas added, “COVID-19 has put additional pressure on private FM channels to invest behind uninterrupted business continuity services. Radio is a fixed cost business and directly/indirectly employs close to 20000 employees. Ad spends on the other end has completely dried up for the next 2 months at the minimum.”

The AROI has appealed to the government to address three critical issues:

Increased Spending: Government spending has decreased by over 70% in the last year alone. Increasing spends on Radio will help rally the country together to fight this pandemic besides giving some immediate relief to the medium.

Clearing Overdue Outstanding payments: Over 6 months of Government outstanding payments are due and clearing the payments now will be a big relief for the industry.

Defray Costs: A waiver on licence fees, Prasar Bharti rentals, reduction in GST rate and the moratorium on payment of GST, on loan and interest pay-outs are some of the requests made by the AROI to the government.

Talking about the letter to the Association of Radio Operators (AROI) sent by all private FM stations, Ashit Kukian, CEO, Radio City shared that the appeal has been put forward a long time ago. The only thing is with COVID-19, it has been compounded and it has become all the more grave for us at this point in time.

Kukian commenting on the appeal made said, “We are the only Content Media Industry which is paying a license fee and also a revenue share. The radio business is a high-cost business and we don’t have a subscription revenue. We are a pure advertising revenue business. In terms of advertising revenue to there is a lot of stake from government advertisements which used to be quite substantial for us in terms of advertising.”

Kukian further shared, “Now I think it is the survival of the industry. In the bailout, we are clearly asking for a waiver in the license fee for a year and a lot of our payments; the DAVP (Directorate of Advertising & Visual Publicity) payments are stuck with the government. Some of the DAVP payments have been stuck for two years, we are expecting that the government releases that so that it helps the industry get back on track.”

The faith and survival of the radio industry now entirely lies with on the Centre meeting the demands of the Radio Industry.

On a parting note, Nisha Narayanan, Director & COO, RED FM, and Magic FM shared, “All private FM radio players have written to the Union Minister of Information and Broadcasting, Prakash Javadekar about the industry going through a tough phase with advertising revenues shrinking over the past year, coupled with a steep fall in government ads, and we hope the government will consider its requests for certain concessions it had sought in December 2019. We hope that the government helps restore normalcy in this sector in these desperate times."

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