 "We will deal with the govt's action as it comes: Nisha Narayanan")
The government has stepped in to challenge the go-ahead granted by the courts to the Kalanithi Maran-promoted Sun Group to participate in the ongoing FM radio auctions. Nisha Narayanan, chief operating officer at the group's Red FM, responds to queries from Viveat Susan Pinto on her station's preparedness for this and the way forward. Edited excerpts:
How prepared are you in the event the government moves the Delhi high court?
We will deal with the government’s action as it comes. Officially, there has been no word on this. The government has gone to the division bench of the Madras HC, challenging the interim order. The Delhi HC verdict was the final order. We will have to wait and see what happens next.
Were you annoyed when Radio Mirchi knocked the Madras HC door last month, saying they were against any conditional permission to be granted to Red FM to participate in the auction process? Was there a need for any other player to interfere?
More than annoyed, I was disheartened. We are a small industry and it would be nice if we all stay together. If it can happen to us, it can happen to other groups as well. For a station that has been playing Bollywood music since 2002, overnight becoming a threat to national security is not something one can comprehend. There is no sensitive information that is broadcast, since news is not permitted on radio stations. The Association of Radio Operators for India has been supportive of us right through our legal battle. I can only hope that all players speak in one voice on this.
The auction process has gone on for a month. For a sector close to Rs 1,600 crore in size, was there need for such a long process?
Most of us are hoping it will conclude in the next few days. Compared to the telecom sector, radio is a much smaller market. There has been some aggressive bidding, resulting in price inflation in a few cities. As we stand now, yes, four weeks of the auction process are over. Bids have crossed Rs 1,100 crore and if we take into account migration fees from phase-II to phase-III, the government would have got Rs 1,500 crore by now. It is possible that next week could be the last one.
Some markets have seen disproportionate interest during bidding, resulting in price escalation. Is this sustainable? How will players recover these costs?
The good news is that this auction process has seen a lot of interest going into markets located in the east and northeast. That is a good sign. But, yes, prices have gone up in the top 15 markets and some of it has been much more than expected. Recovering it will be a challenge.
We have to come together to see not only how radio is perceived but also how radio is sold. Radio has limited inventory and our primary revenue is from advertisements. If you have limited time, recovering these costs will be a challenge. I guess one will have to re-look the business model.
Do you expect another round of consolidation in radio?
I don't think that would happen. This is because whatever had to happen in terms of consolidation, did so before the auction process. It is unlikely now.
How prepared are you in the event the government moves the Delhi high court?
We will deal with the government’s action as it comes. Officially, there has been no word on this. The government has gone to the division bench of the Madras HC, challenging the interim order. The Delhi HC verdict was the final order. We will have to wait and see what happens next.
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As a radio group, I can only hope that we are looked upon fairly and not taken to task for things we have not done. We have been in the sector for long and have done work not only from an entertainment point of view but also from a social cause perspective. We have gone to markets where radio is not growing and given a fillip to local music and talent located there. I can only hope that these factors are taken into account.
Were you annoyed when Radio Mirchi knocked the Madras HC door last month, saying they were against any conditional permission to be granted to Red FM to participate in the auction process? Was there a need for any other player to interfere?
More than annoyed, I was disheartened. We are a small industry and it would be nice if we all stay together. If it can happen to us, it can happen to other groups as well. For a station that has been playing Bollywood music since 2002, overnight becoming a threat to national security is not something one can comprehend. There is no sensitive information that is broadcast, since news is not permitted on radio stations. The Association of Radio Operators for India has been supportive of us right through our legal battle. I can only hope that all players speak in one voice on this.
The auction process has gone on for a month. For a sector close to Rs 1,600 crore in size, was there need for such a long process?
Most of us are hoping it will conclude in the next few days. Compared to the telecom sector, radio is a much smaller market. There has been some aggressive bidding, resulting in price inflation in a few cities. As we stand now, yes, four weeks of the auction process are over. Bids have crossed Rs 1,100 crore and if we take into account migration fees from phase-II to phase-III, the government would have got Rs 1,500 crore by now. It is possible that next week could be the last one.
Some markets have seen disproportionate interest during bidding, resulting in price escalation. Is this sustainable? How will players recover these costs?
The good news is that this auction process has seen a lot of interest going into markets located in the east and northeast. That is a good sign. But, yes, prices have gone up in the top 15 markets and some of it has been much more than expected. Recovering it will be a challenge.
We have to come together to see not only how radio is perceived but also how radio is sold. Radio has limited inventory and our primary revenue is from advertisements. If you have limited time, recovering these costs will be a challenge. I guess one will have to re-look the business model.
Do you expect another round of consolidation in radio?
I don't think that would happen. This is because whatever had to happen in terms of consolidation, did so before the auction process. It is unlikely now.