Music royalty row casts shadow over FM-III auctions

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Kolkata: At the first event of the Association of Radio Operators for India (AROI) in New Delhi on Monday, FM radio players are hoping for clarity on a slew of regulatory issues that is holding up the rollout of Phase-III, the most contentious being the dispute over music royalty.

According to radio players, I&B minister Ambika Soni, who will inaugurate “Vision 2010”, has given an indication that Phase-III policy of FM radio, already delayed by over a year, will be announced by the year-end.

The radio industry expects the policy to address issues, such as raising the foreign direct investment cap, allowing multiple licences and multi-city networking, and clearing news broadcasts in limited formats, it has been flagging on a regular basis with the government and the Telecom Regulatory Authority of India (Trai).

According to Radio City CEO Apurva Purohit, who is also AROI president, FM radio players had received a favourable response from the government on all the issues and “expect most of our demands to be included in the new policy”. Incidentally, Soni had ruled out permission for news broadcast while speaking to the Express Group recently.

FM players, on their part, don’t want auctioning to start before the music royalty row is cleared up. At least 200-500 frequencies, many in small towns, are open for auction in Phase-III. In the last phase, at least 90 stations were not picked up. After Phase-I and II, there are now 280-odd stations operational across the country. Analysts also say for the Phase-III bids to be successful, it is imperative that the music royalty issue is sorted out first.

“We have had two hearings with the Copyright Board and the next one is in December. This kind of royalty regime can’t continue and there’s no point in announcing auctions before the revenue sharing of music royalties is decided,” says Purohit.

Agrees Prashant Panday, chief executive, Entertainment Networks India. “No one will bid for Phase-III unless the royalty issue is cleared.” As of now, FM broadcasters, big and small, pay anything from 15-20% of their revenues on royalty. With no other content allowed on FM, players have a 24-hour music regime, thus raising costs further.

“At least 60% of the new policy has been firmed up. But the government has to ensure that this phase is viable for operators in smaller towns,” says Smita Jha, associate director, PwC.