The advertisement revenue reported by FM radio operators during the quarter ending June 30 2024 in respect of 388 private FM radio channels stood at Rs 428.45 crore.
According to the latest data from the Telecom Regulatory Authority of India (TRAI) TRAI, the ad revenue for the same private FM radio channels was Rs 491.98 crore in the previous quarter i.e, the March quarter.
Apart from the radio channels operated by All India Radio – the public broadcaster, as per the TRAI data in its report Indian Telecom Services Performance Indicator Report’, as of June 30, there are 388 operational private FM Radio channels in 113 cities operated by 36 private FM radio operators. As compared to the previous quarter, there is no change in the number of operational private FM radio channels, cities and FM radio operators.
Read more: EXCLUSIVE: Radio sector demands de-linking NOTEF, GST revision, and mandate for ‘radio on mobile’
Meanwhile, 499 community radio stations are operational.
The report further noted that the subscriber base of Public Mobile Radio Trunk Services (PMRTS) decreased from 65,880 at the end of the March quarter to 65,223 at the end of the June quarter with a quarterly rate of decline of 1%
The decrease in ad revenue from the private FM channels come at a time when the mass medium is plagued with various issues.
Radio, though the smallest segment of the Media and Entertainment (M&E) industry, boasts a listenership of 20 crores in India and recently celebrated its 100th anniversary. The revenue of the sector is about Rs 3000 crores.
The industry members, however, have raised concerns related to the issue of de-linking NOTEF (Non-Refundable One Time Entry Fee).
From pushing for content freedom to requesting a reduction of the GST on radio (from 18 percent at present to making it 5 percent- at par with print), Storyboard18 recently reported how radio operators have shared various concerns and recommendations in a recent consultation meeting chaired by Ashwini Vaishnaw, Minister for Railways, Information and Broadcasting, Electronics & Information Technology.
In its recommendations to the Ministry of Information and Broadcasting (MIB) last year, the TRAI stated that the annual licence fee should be calculated at 4% of the Gross Revenue (GR), excluding GST, of the FM radio channel. The authority noted that the current methodology of determining licence fees impinges on the business of the FM radio operators who are required to pay annual licence fees for a city at 4% of their annual gross revenue or 2.5% of the NOTEF, whichever is higher.
TRAI had then observed that more than 47% of the 384 radio channels are subjected to licence fee payment of over 4% when the licence fee is calculated based on NOTEF. During the consultation, it was suggested by Nisha Narayanan, COO, RED FM & Magic FM, that the TRAI recommendation may kindly be accepted.
“Balance frequencies were auctioned for e.g. in Delhi, Mumbai and Chennai- this resulted in high bids, almost 4 times the migration OTEF. Other operators must pay 2.5 % of the highest OTEF. At the time of Covid, revenue dropped by 80 percent. Almost the entire revenue of operators across all cities went into paying 2.5% OTEF”, she said.
It is also to be noted that print and radio are direct competitors in local cities and towns. However, print is charged with 5 percent GST, while radio is charged with 18 percent.
The Ministry of I&B had recommended to GST council that GST on radio should be 5 percent in the past.
Read more: Auction charges eased for private FM radio in uncovered new cities
The Ministry on September 10 introduced amendments to the Private FM Radio Phase-III policy guidelines. The key updates include new reserve prices- based on the TRAI’s recommendations for the annual fee structures.
The Union Cabinet recently approved the proposal for the conduct of the third batch of ascending e-auctions for 730 channels in 234 new cities with an estimated reserve price of Rs 784.87 crore under the Private FM Radio Phase-III Policy.
According to the latest amendments, the reserve price for FM channels in uncovered new cities will be 2% of the gross revenue for the private FM stations, excluding GST.