Monday, November 29, 1999

Govt tunes into AIR to fight private radios

News posted by www.newsinfoline.com

With the third phase of private FM radio still far from becoming a reality, the government has decided to revamp the FM and medium wave channel network ofAll India Radio (AIR) to make it more competitive.The information and broadcasting (I&B) ministry has lined up a Rs 100-crore financial package for AIR with immediate effect, the largest investment in any radio network — government or private — in recent times, sources said. AIR will utilise the funds to generate fresh content, digitise its hardware and conduct live concerts, among other initiatives. AIR will also use a part of the funds towards the preservation of its over 60-year-old archives.The investment into AIR comes at a time when the private radio industry is at crossroads over the future of radio business. Sources say private operators are still undecided on whether to make further investments in FM radio business by participating in the third phase expansion or stay away till their current operations become stable. The private radio industry is estimated to have invested over Rs 3,400 crore in past five years while it could generate only around Rs 2,800 crore in advertising revenue, its only revenue-earning window.According to industry experts, the 250 private FM stations run by around 40 companies are together incurring losses due to high cost of operations, licence fees and heavy royalties to the music industry.The size of the radio industry, including private operators and AIR, is estimated to be over Rs 1,000 crore annually with the state-owned operator commanding around 22-23% market share. The Rs 100-crore infusion into AIR is seen as a major initiative by I&B minister Ambika Soni, who wants to make both AIR and Doordarshan more competitive and self reliant, government sources said."AIR will utilise around 50% of the Rs 100 crore towards content creation and commissioned programmes while 10% will be for organising music concerts and radio workshops," a government source familiar with the matter told FE.Interestingly, AIR has to perform public service broadcasting, something the private radio stations do not do. According to I&B ministry, of the 12 lakh hour of annual programming generated by the AIR, around 60% is meant for public service broadcasting whereas the private radio operators are generating their content, mostly contemporary Bollywood music, for maximising revenues.In this scenario too, AIR has been generating steady average annual revenue of around Rs 220 crore over the last four years, sources said. Also, the FM stations of AIR had the highest number of listeners in metros compared to private stations; the government had said in the Lok Sabha last year. According to the data provided by the I&B ministry for 2008-09, the average listenership of AIR's Rainbow and Gold channel in the country stood at 49.5% and 29.55%, respectively, followed by private-owned stations like Radio Mirchi, Red FM, Radio City and Suryan FM among others. The data gathered was according to a listener's survey conducted by the I&B ministry's Audience Research Unit during 2008-09 across 18 metros in the country.

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