'Music royalty issue deserves attention'

With the government announcing the third-phase expansion of private FM radio, India may soon have over 1,000 FM radio stations. Still, several fundamental issues continue to pull back the sector, which is growing annually at 28 per cent.

The Association of Radio Operators for India (AROI), the apex body of all FM radio operators, has raised concerns over the expansion of the sector before sorting out some important issues. In a chat with ASHISH SINHA, AROI President APURVA PUROHIT, who is also the chief executive of Radio City 91.1 FM, dicusses the concerns of all FM radio operators.

Do you welcome the third-phase expansion of FM radio?

We support any initiative that expands our business. It is quite evident from the response we sent to the Telecom Regulatory Authority of India (Trai) on its consultation paper regarding the third-phase expansion.

There are several issues that need to be sorted out before we move forward. FM radio is still growing in the country and it needs all the positive support from the regulator and the government.

What are the issues that are hampering the growth of FM radio business?

Allowing news and current affairs on FM radio, raising the foreign direct investment (FDI) cap from the current 20 per cent to at least 26 per cent, payment of music royalties to a single body rather than different outfits, allowing mutiple licences within a single city to a radio entity, tradability of radio licences and the calculation of net worth of a radio company are some of the issues, which, if sorted early, will cause phenomenal growth in the radio sector.

Of these, the issue of payment of music royalties to a single body rather than different outfits is clearly affecting all the 37 FM radio companies.

Since playing recorded music is still central to most FM radio programming, its a major issue between the music companies and the FM radio stations. There are several court cases being fought by individual players with the music companies.

What is the industry's view on AROI's demand for increasing the FDI cap from 20 per cent to 26 per cent?

While most of the radio companies are funding their FM stations through internal accruals, a 26 per cent FDI cap for the FM radio sector will open doors for a number of foreign FM radio stations and media organisations that wish to come to India.

How do you see Radio City shaping up during this new phase?

We are a programming-centric company and not a marketing-driven organisation. We are present in all metros and big towns and five smaller towns of Maharshtra and as per our strategy, we will continue to focus on big cities. If most of the AROI's concerns are addressed then we may look at expansion, but as of now we are doing good as is evident from listeners' demand.