Asheesh Chatterjee, CFO, 92.7 Big FM is positive about Phase III of FM radio licensing and the new spectrum being freed. MxM India caught up with him recently to talk about the FM industry, pre- and post-Phase III.
01. With Phase III coming into play, do you think that the issues such as royalty, taxes etc that the FM industry has been struggling with, will be sorted?
I am very optimistic. If you look at the efforts the government has taken towards digitization, the intent is to have a consensus and resolve the issues and make the industry grow. Most of these issues have been identified, and yes, there will be solutions. The phase III guideline itself solves many issues. We tend to look at the glass as half-empty, why not look at it as half-full? There were many things which have been addressed, and some which need to be addressed which I am confident will happen soon.
02. Does the current RAM measure the listenership of FM radio appropriately?
Ratings and measurement requires investment. So once you have strong players with a pan-India footprint, they will have the necessary revenues for the investments to make these measurements appropriate.
Yes, today the measurement is restricted to the top markets, and this is set to expand. You do not need daily or weekly measurement to tell you that radio reaches where literacy has not reached yet or where, because of electricity problems, TV does not work. It is enjoyed as a passive medium, even while you are working. Radio does not really have a prime-time at all. So research will capture all this and much more. I am sure with phase III, and stronger players, there will be sweeps that will be done to bring out the statistics.
03. Prashant Panday of Radio Mirchi recently said that FM radio will have strong competition from internet radio. Do you agree?
Digital is one of the areas, which by no means implies that FM radio has little future. FM radio is itself going to grow five times from its current numbers. There is immense future in FM radio. And also, yes, digital radio with its uniqueness to be able to search, social networking, and customize, will offer another product. FM players who have the understanding of the audience, as well as content, will be able to monetize internet radio better than anybody else. However, if you are going to make it a paid service, there are not going to be many takers for it.
04. Phase III: Challenge or opportunity for FM radio industry?
I see only opportunity: to make good use of the spectrum that will be freed after the Phase III auction happens, and to execute on product innovation and product differentiation to make a profitable business model for all stakeholders, whether it is the advertisers who will look at this medium for its cost-effectiveness or listeners who will look at it as a passive medium for enrichment and entertainment, and us as radio operators who like to reward both investors and employees. It is going to be a work-work solution for everybody. The opportunity is right there at the section point and we need to execute it to the plan.
05. Are advertisers taking this medium more seriously in their traditional media mix?
Advertisers have always taken this medium seriously. Nobody buys you cheap, you sell cheap. The fractured spectrum that some us have had, because we are there in two towns in Gujarat, does not mean that no advertiser can do a Gujarat-plan with you. So those are the problems that will go away, and you will have the spectrum to reach the targeted region or TG. I think once that gets corrected, advertisers will start using FM as the primary medium.
As told to Ananya Saha