A glimmer of hope for radio

Source: The post is based on the article “A glimmer of hope for radio” published in “Business standard” on 18th October 2023.

Syllabus: GS3- Economy- infrastructure (Communication network)

News: The article discusses the decline of radio in India due to heavy licensing fees and digital competition. However, recent recommendations from Trai, including allowing news on FM channels and making FM receivers mandatory on mobile phones, may revive the medium. These changes could increase listenership, reduce costs, and attract more advertisers, giving radio a brighter future.

Why did radio’s popularity decrease?

Revenue Drop: Radio’s earnings fell from ₹3,360 crore in 2018 to ₹2100 crore in 2022.

Branding Changes: Leading brands like Radio Mirchi pivoted. In 2020, it transitioned to Mirchi Unlimited.

Heavy Licensing Fees: Radio operators faced financial challenges. In 2015, they paid ₹3,100 crore in fees, almost double their 2014 earnings.

Unfavorable Guidelines: License fees were set at 4% of gross revenues or 2.5% of the one-time city entry fee, a burden for many stations.

Digital Advancements: The rise of services like Jio, falling data prices, and the surge of online media consumption reduced radio’s dominance.

Late Adaptations: While other media sectors grew, radio faced restrictions that limited programming innovation and revenue generation.

Economic Challenges: The economic slowdown in 2019 and the pandemic further affected radio’s popularity.

What are Trai’s recommendations?

Introduction of News on FM:

Trai suggests allowing news broadcasts on FM channels.

FM Receivers on Mobile Phones:

Recommends making FM receivers mandatory on mobile phones.

Aims to counteract manufacturers who disable radio features to promote their own services.

Licensing Fee Reforms:

Proposes delinking the license fee from the nonrefundable one-time entry fee.

Suggests calculating the license fee as 4% of gross revenue, excluding GST. This could reduce costs for stations by 10% to 40%.

Boost in Reach:

By ensuring FM features in mobiles are enabled, radio could potentially reach the billion-plus mobile population, potentially doubling listenership to over 520 million.

News Content:

Allowing 10 minutes of news every hour can diversify programming and attract a new category of advertisers.