[icernet] Licence fees queer pitch for FM

[Arul Selvan]

  The emerging scenario in the country's private FM is that of gloom.  A 
desperate call for rationalisation of licence fees was the main pitch 
for survival. The private FM players are now seeking a rationalisation 
of licence fees working in a revenue-sharing model between the 
participants and the Government. However, the Government is yet to 
respond to this proposal. 

Twenty-three parties bid over Rs 425 crore for 108 frequencies in 40 
cities, but only 10 paid bank guarantees. In three years 13 stations 
were launched in nine cities.The private FM radio industry, confronted 
with high licence fees, is also faced with the grim scenario of low 
advertisement spend in favour of radio. FM radio's advertising spend is 
just one per cent. Therefore, the current FM radio business is unviable. 
Currently, FM's reach is 39 million people in nine cities. For 
viability, India needs a much higher reach. In comparison, the US has 
14,000 radio stations, Italy 1,000, Spain 2,000 and India's small 
neighbour Sri Lanka has 20 stations.

Source:
http://thehindubusinessline.com/2003/03/16/stories/2003031601720500.htm