Vision 2010: News as a commodity will be the biggest differentiator for FM radio

By Sangeeta Tanwar , afaqs!, New Delhi | In Media Publishing | November 16, 2009
At the Vision 2010 conference, panellists strongly advocated for news to be allowed on FM radio, as its absence is driving away both the audience and advertisers from the medium

The Vision 2010 conference in Delhi, organised by AROI (The Association of Radio Operators of India), had a session on Multimedia Perspective: A Comparison between Radio and Other Media.

The panellists for the session comprised Pawan Aggarwal, director, Dainik Bhaskar Group; Anil Mehra, executive director, India Today Group; Rajesh Sawhney, president, Reliance Entertainment; and Anurradha Prasad, chairman and managing director, B.A.G Infotainment. The discussion was moderated by media consultant and author, Vanita Kohli-Khandekar.

Kohli-Khandekar initiated the discussion by saying that statements like 'whether there is a level playing field for radio as compared to other mediums'; 'how policy changes have aided growth of other media' or 'can the same happen for radio' make the radio medium sound as an underdog. But that's not the case.

The moderator sought panelists' opinions on policy being an enabler in deciding the technology and competitive standards for an industry.

Aggarwal of Dainik Bhaskar Group responded, "FM Radio is the last entrant in the economy, after print, TV and even mobile. So, one needs to work on it differently. Unfortunately, the government also owns AIR (All India Radio), which makes it possessive about the medium. It was this protective attitude that resulted in a not-so-successful Phase I of radio licensing policy."

He added that radio commands a reach of 98 per cent, but its impact is much lower. This status could only change if the government decided to care for private FM players, the way it does for AIR. According to him, there is need to bring in a friendlier bidding process; and news has to be allowed on private airwaves.

Mehra of India Today Group articulated the concerns of a multi media company, by emphasising that the entertainment and media industry is not a multi-playing field, in comparison to other businesses. "Radio is a poor cousin of other mediums and is full of restrictions. The government needs to open up the industry and allow for differentiation of content by allowing news and different formats. Otherwise, the end function of this medium will be just creating a differentiation amongst channels, on the basis of the revenue it garners."

"The medium is easy to handle and offers the best multiplier affect when bundled with other media," asserted Mehra.

Supporting Mehra's strong advocacy for news, Prasad of B.A.G Entertainment argued that if news could be allowed on internet, mobile and through local cable; what was stopping the authorities from allowing it on FM radio?

According to her, sourcing news from agencies such as AIR or Doordarshan would not mean anything; as it would not add any value to the brand. But if players were allowed to create news, multimedia owners could get an opportunity to further build their independent, diverse brands. She stated that people should be left to decide whether what they were hearing was good or bad.
Sawhney of Reliance Entertainment spoke about the urgent need for innovation and experimentation in radio. He referred to media studies that point out an increasing trend of radio being consumed on-the-move, either on mobile or in a vehicle. During this time, news was delivered to the consumer through mobile phones, so the absence of news on FM radio worked to the disadvantage of the medium.

The moderator next shared that in 2002, there were about 22 radio channels; and after phase II of radio licensing in 2005, there are 235 radio channels in the country. According to her, this proved that liberal policy measures and government decisions could act as a catalyst for growth.

Kohli-Khandekar turned to Aggarwal of Dainik Bhaskar Group for some interesting insights on the government's role and influence in changing things for any industry.

Aggarwal shared his personal experience, when as part of the cable industry, he realised the scope and influence of government policies for a business. In 2000, he was running a cable company; this was a time when every channel was free-to-air. But within two years, many channels went pay. As a result, his company's collection from cable subscribers went up. With rentals going up to Rs 200 to Rs 300, the company made enough for itself and for making handsome payments to cable operators.

"It was here that the government decided to intervene and introduced CAS (Conditional Access System), as consumers were involved and were affected. In case of radio, the consumer is not involved and it is only the operators who are getting affected. So, the government is reluctant to intervene."

The session also dwelled on increasing foreign direct investment (FDI) from the current 20 per cent to 26 per cent; and extending the license period from current 10 years to 15 years for radio operators.

The panel further discussed that considering the high costs of putting up news on radio, whether operators would be ready to invest in launching dedicated news stations; provided the FDI limit was increased and different formats were allowed on radio.

Speaking for Big FM, Sawhney suggested that with the current restrictions and provisions, he could only see scope for incremental introduction of news, in the form of bulletins lasting 2-3 minutes. Denying news to the radio industry amounted to taking away the audience and advertisers from radio. Sawhney was of the opinion that allowing government-fed news to be aired on private FM stations would add only marginal value to the brands. For big growth, one had to have dedicated news radio stations; and this could only be possible if the government allowed multiple frequencies.

Sawhney explained, "Releasing more frequencies will bring down the operating cost for operators; as a single company would be in a position to operate two-three stations. The telecom industry has benefited and grown in this very manner. However, there is a need for better management of spectrum, as we see other industries facing spectrum shortage."

Mehra of India Today Group was in favour of government limiting the number of licenses, so that the market wouldn't get overcrowded.

In conclusion, the moderator said that the demands being made by the radio operators were reasonable and fair. She called for serious consideration of these demands in phase III of radio licensing, in order to provide a spurt in the growth of the industry.

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