india

Updated: Mar 21, 2020 20:34 IST

The Association for Radio Operators for India, a body of private FM channels in the country, has asked the government to waiver the sector from payment of licence fee for a year.

The Association for Radio Operators for India (AROI) wrote to Union minister of information and broadcasting Prakash Javadekar on March 16 to say that coronavirus outbreak coupled with a bad year of reduced advertising and dues from the government were threatening operations and companies were considering retrenchments as sustaining an industry that employs close to 20,000 people was becoming difficult.

The letter sought one-year waiver on all licence fees and charges by the government and Prasar Bharti, along with restoration of government advertising on radio. It also requested for the clearance of “long-pending” payments from the government agencies.

“The current and unexpected coronavirus pandemic has further deepened the crisis with major cuts in advertising across all industries and services including travel and entertainment sectors. This is resulting in an unprecedented financial crisis with many stations contemplating cutting costs to survive, including cutting down on staff etc,” an excerpt from the letter by AROI president Anurradha Prasad says.

It said that since radio was an important media platform for information and entertainment it should be given financial aid till the economy stabilizes.

The government has drastically reduced its advertising on radio, which earlier accounted for almost 10% of the FM industry’s revenues.

Harshad Jain, chief executive, radio and entertainment, HT Media Ltd and Next Mediaworks Ltd, told livemint.com that most companies’ P&L was under tremendous pressure, especially since they had invested heavily in acquiring licences in Phase III of the radio auctions.

“The annual licence fee is 4% of gross revenues, apart from Prasar Bharti rentals, which are also exorbitant. Radio stations do so much pro bono work on behalf of the government and, so, in desperate times, a waiver would be helpful,” Prashant Panday, chief executive officer, Radio Mirchi, said.

“It is important that the government helps restore normalcy in this sector, considering radio remains the last-mile to send the right message to Bharat, or the common man, even today,” livemint.com quoted Nisha Narayanan, chief operating officer and director, RED FM and Magic FM as saying.

As per Pitch Madison Advertising Report 2020, radio adex has shrunk to only 3% of the overall ad spends. The medium took a big hit in 2019 with a drop in spends in the second half by 6% on account of slowing down of the economy. Industry experts say that FY20 will close with a degrowth in radio adex to the tune of 20%.