Adgully Exclusive | Crystal Gazing- Radio in 2011

Prashant Panday, Chief Executive Officer, Radio Mirchi:

The Phase III policy has been pending for a long time, initially because radio players were opposed to it and now because the government needs to take a couple of important decision like-

1) Whether Phase II license periods should be extended from 10 years to 15 years by charging players additional One Time Entry Fee (OTEF) equivalent to half of the original OTEF and

2) Whether the auction method for Phase III should be "clock auctions" (used by government for 3G auctions) or the "Phase II auctions" (used by the government successfully for Phase II licenses).

Once the policy is announced, we expect many interesting things to unfold. The spread of radio should expand from the present 80-85 cities to about 300 cities. The number of radio stations should grow from the present 240 odd to nearly 1000. This will obviously give a big boost to listenership across the country and finally allow radio to compete with regional print. ENIL is gung-ho on Phase III we have good profitability and we have great management skills to manage a larger network.

Moreover the radio industry will be looking at Copyright Board clearing some cases related to music royalties. Importantly, there is the case with respect to fixation of music royalties for T Series music. We believe it should be the same as for PPL music because the principles are the same. There is also the matter of clarifying whether the order passed in the PPL case covers IPRS or not. In our opinion it does.

There are some Copyright amendments long overdue. The Ministry of HRD has worked on making these amendments for more than 5 years. Finally, the Minister of HRD introduced the Bill in Parliament a few months back. Thereafter the Standing Committee of the Parliament has also made its recommendations on the amendments. We expect that the Bill will be introduced in Parliament in the budget session. If the Bill is passed, it will do a lot of good to music artists, will improve the performance of collection societies and will provide some degree of protection to radio broadcasters. It's a progressive piece of legislation and it needs to be passed soon.

While 2010 saw a revival in radio's revenues it was coming off a low base. 2011 will see a further improvement in the revenue scenario. I expect the radio industry to grow at around 20% in FY11. With the music royalty regime now a lot more reasonable, a lot of radio broadcasters should turn EBITDA +ve. Some may even turn PAT +ve. This augurs well for all radio broadcasters who have put in close to Rs 2000 crores a few years back and the music industry which will make more royalties as radio revenues rise. Radio investors will finally have some hope of generating some returns on their investments.

With the passage of the Phase III policy, owning multiple stations in a single city may be permitted. Simultaneously, radio owners will be able to sell their equity sooner (in 3 years rather than the present 5 years). Since most radio broadcasters have finished 3 years of operations, they will be allowed to sell. If pricing agreements can be reached, there could be a fair degree of consolidation in the radio space in 2011.

The announcement of Phase III policy should also act as a catalyst for more investments in the radio space. Existing operators as well as new ones are expected to participate in the opportunities presented by this policy.

All in all, it promises to be a good year for radio.

Apurva Purohit, Chief Executive Officer, Radio City:

In 2010 we were just coming out of the recession, so everybody was a little skeptical in terms of investment or about expansion and doing things differently. Everybody was just trying to stabilize themselves and de-risk themselves. In the new year if the trend continues till March where everybody is doing well, we all will certainly be aggressively looking at growth and innovations. So whether it is innovation in programming or in terms of growing. Moreover growth can come from Phase III, if Phase III does not happen it will be digital radio that will help us grow. So a lot of radio stations will be looking at banking big on digital radio.

Soumen Choudhury, Business Head, 92.7 BIG FM:

We at 92.7 BIG FM have always believed in giving our audiences the best entertainment experience on the station and hence we are always innovating and tailor making our offerings to meet their requirements. Our regular consumer need gap research, helps us keep our ear to the ground and allows us to offer them with clutter-breaking, innovative and pioneering entertainment.

The year 2011 will see several new offerings which will range new characters, interesting music innovations and working with other verticals, to unlock true value for consumers.

We at 92.7 BIG FM are hoping that the year 2011 will unleash the true potential of radio, with Phase III and further our endeavor of reaching the powerful medium of radio deeper into the country. We are also hopeful of multiple frequencies opening up ' which will allow for further experimentation with the medium, sports is another one which if opens on radio ' promises a complete treat to audiences. Another thing that we see will change the way radio is consumed will be with news and current affairs opening on radio, the world over, news and current affairs work excellently on radio and India should be no different. We see these changes being a game changer in 2011.

On 92.7 BIG FM, we have some excellent properties planned across the pegs that appeal to audiences which range sports, festivals, special days and of course Bollywood. We look forward to treating audiences with highly interactive and enriching content on our Station.

Tomorrow we get you Crystal Gazing- Television in 2011 with Sameer Nair and Keertan Adyanthaya. | By Prabha Hegde [prabha(at)adgully.com]