Utpal Borpujari

July 20, 2009

Royalty, other revenue issues delay FM Radio 3rd phase announcement

Filed under: Deccan Herald,Media,Radio — utpalb21 @ 2:00 pm
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By Utpal Borpujari

With revenue generation in Tier-2 city FM radio stations not encouraging enough, the government has decided to postpone launching the third phase of FM expansion in the country to buy time and work out a more workable model for stations in smaller towns.

The Cabinet note in this regard has been sent for “recirculation” among the relevant ministries for inputs, highly-placed sources in the Information & Broadcasting Ministry said.

With one of the contentious issues being the demand for “rationalisation” of music royalty paid by the radio stations to right owners, I&B Minister Ambika Soni is soon likely to meet Kapil Sibal, whose HRD Ministry handles the Copyright Act related matters, to work out an acceptable way out.

While now the royalty paid for each piece of music is fixed irrespective of whether the FM station is located in a metro or a small town, the sources said one of the solutions could be developing a variable fee structure depending on the location profile and audience size.

“The industry has been telling us that the copyright royalty paid now is high, and is demanding rationalisation of its structure. One suggestion is to decide the royalty depending on the possible revenue generation capacity of a station which in turn will depend on the population of the area,” the sources said.

The I&B Ministry is in the process of preparing a list of all such revenue-related issues and put them up before stakeholders so that the policy for the third phase of expansion can be a practical one, they said.

Incidentally, Soni had said a month ago that the Cabinet note on phase three of FM radio expansion was ready and would be taken up soon. However, it was decided to postpone taking it up so that the revenue issues raised by the FM radio industry could be taken to their logical conclusion beforehand.

The third phase envisages setting up of another around 800 FM stations, taking the total number of such radio stations to over 1,000. The new policy is also expected to include permission to private FM stations to broadcast news content, though only those sourced from Doordarshan and All India Radio.

(Published in Deccan Herald, www.deccanherald.com, www.deccanheraldepaper.com, 20-07-2009)

http://www.deccanherald.com/content/14777/fm-radio-third-phase-expansion.html

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