As the Indian government prepares to unveil its Union Budget 2024, the radio sector eagerly awaits some key concessions. The industry's stakeholders have a laundry list of expectations, ranging from regulatory reforms and financial incentives to technological advancements and infrastructure development.
Back in late 2023, TRAI released recommendations for the radio industry with respect to increased DAVP rates, allowing private radio players to broadcast news, de-linking of non-refundable one-time entry fees from annual licence fees, incorporating radio in mobile handsets and more. These recommendations were made but never implemented and will act as a catalyst in the growth of the radio industry.
Together, the industry’s expectations revolve around policies that will drive innovation and lead to growth in the radio sector.
Exemption from heavy licence fee
Nisha Narayanan, Director and COO, Red FM and Magic FM, the industry is in dire need of relief in terms of licence fees. This step would be an enabler for radio players to include much-needed technological upgrades in response to the digital transformation.
Even at e4m’s Golden Mike Radio and Audio Conference 2024, Ramesh Menon of Fever Network had shared the significant licence fee that the industry pays, hampering profitability immensely.
Menon noted that radio is the only industry that pays such a huge licence fee, and unless that changes, the industry’s profitability will never match up to that of any other industry. He said that if a person has a hundred crores and wants to invest in something, they will have far better options than the radio industry.
Ashit Kukian, CEO, Radio City also believes it would be beneficial to streamline licensing procedures and reduce operational costs. This will drive innovation and lead to growth in the radio sector.
Narayanan pointed out that a level playing field between OTT music streaming platforms and FM radio is supported. While OTT players can be accessed from anywhere without paying a licence fee, FM radio remains bound in that capacity. Addressing this disparity can be a sustainable step taken towards the radio industry.
Need for a measurement system and improvised digital Infrastructure
Particularly, the radio sector has been battling heightened competition from digital media. It's also a long-standing problem for stations because, in contrast to digital platforms, analog radio has limited audience measurement tools.
The radio industry is also worried that the AdEx has dropped from 4% to 2% and yet has not managed to create a measurement system, which brings in some level of accountability.
Initiatives which are aimed at improving digital infrastructure and supporting local content creation amongst others will also be beneficial for the players. This could lead to enhanced service delivery and a larger audience reach, said Kukian.
Other expectations
The industry also hopes to receive financial assistance with the price of renting and using the shared infrastructure with Prasar Bharti. With this, radio stations could manage resources more effectively and raise the general calibre of their services.
“We are looking forward to specific concessions such as tax incentives for investments in broadcast equipment and infrastructure upgrades. Funding allocations for research and development in digital broadcasting technologies would greatly benefit the sector,” Kukian added.
Industry sources also expressed another challenge regarding the attempts to make it convenient to listen to FM, either by activating the FM on mobile phones, or making other devices available. There needs to be a solution where the device constraint can go away.
Red FM expects support from the government to relieve the tax slabs to inject direct money into the market, providing a much-needed boost. Relief in the form of GST and a level playing field with other platforms will significantly benefit the advertising industry, which in turn may positively impact radio.
The impact of Budget 2024 on the radio sector
Adoption of technology and spending on digital infrastructure can both be increased with a well-targeted budget. This may result in improved audience reach and service delivery. But any disdain for the digital revolution or the imposition of high fees could negatively impact the sector's innovation and growth.
Narayanan is hopeful that the government will provide a financial package for the radio industry. This is essential for them, to fund their digital upgrades and the expansion into Phases III and IV.
Grants or subsidies aimed at enhancing skills and capabilities in radio production and content creation are essential to maintain competitiveness and innovation, as per Kukian.
Kukian said, “It's crucial that the budget supports a conducive regulatory environment and provides adequate funding to ensure the radio industry's continued evolution and relevance in the digital age.”
All in all, the industry collectively is looking forward to a budget that recognizes the evolving needs of the radio industry and encourages technological advancements that can broaden audience engagement and content diversity.
