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The private FM radio segment sees some hope in the new Union minister for information and broadcasting, Prakash Javadekar, talking of hastening phase three of radio frequency auctions, beside relaxing the prohibition on private stations carrying independent news bulletins.
Currently, private FM radio is the only mass media platform barred from carrying news and current affairs. This has not only increased the dependence of these stations on music and radio jockey talk but held back the ad rates and alienated certain categories of advertisers, due to lack of enriched content.
"The inclusion of independent news bulletins on private FM radio will give us the chance to provide differentiated and enriched content, says Harrish Bhatia, chief executive officer (CEO), My FM, a part of DB Corp. "In view of the phase three auctions, after which, private FM radio will reach 300 additional towns, the medium will become attractive to almost all advertisers who are looking for rural, tier-II and tier-III penetration."
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However, Apurva Purohit, CEO, Radio City, says there might not be any major revenues streams opening with this move. "News on private FM channels will be part of the enriched content we provide our listeners and in that sense, will certainly add value to both the consumer and to us but I don't see any major revenue streams opening as a result," she says.
As part of the phase three auction policy, the I&B ministry had allowed private FM radio stations to carry news from the All India Radio bulletin. However, this was not agreeable to most private FM entities, especially those that are part of news media companies.
Prashant Panday, managing director and CEO, Entertainment Network (India) Ltd (ENIL), the company that runs the Radio Mirchi national station (ENIL is under Bennett, Coleman & Co, the media giant), says: "Being able to air news only from AIR was a disastrous proposition for radio players. Not only would we have the same content as the state radio and each other, we also might have had to pay to carry the bulletins."
Bhatia agrees that for radio stations like My FM and Radio Mirchi, which have synergies with mainstream Hindi and English newspapers, there is unlikely to be any sense in relaying news from the state broadcaster. The addition of news on private FM channels will mean additional cost. Here, too, stations that are part of news media companies, will suffer slightly lower costs than those with no such connections.
Bhatia says this will also result in driving up ad rates, as no radio station would want to suffer losses. Currently, advertisers pay Rs 500 to Rs 1,000 for a 10-second spot on radio. This is much less than the average ad rates on Hindi general entertainment channels, where top prime time shows charge as much as Rs 1.5 lakh for 10 seconds. While radio might not be able to catch up to television in this case, the industry is bullish that there will be some significant correction in rates.
