MxMIndia

Tag: FM Phase III

  • The Telecom Regulatory Authority of India has issued recommendations on 'Migration of FM Radio Broadcasters From Phase II to Phase III'

    TRAI gets into the act on FM Phase III, issues ‘recommendations’

    By A Correspondent

     

    The Telecom Regulatory Authority of India (TRAI) has issued its recommendations on ‘Migration of FM Radio Broadcasters from Phase II to Phase III’.

     

    Phase I of FM Radio broadcasting was launched in 1999 and under which 21 private FM radio channels became operational. Phase II of FM Radio broadcasting was launched in July 2005 and 221 more channels were added. As of now, total 242 channels (21 migrated from Phase I and 221 from Phase II) are operational. In Phase III, an additional 839 channels across 294 cities would be made available for auction.

     

    The salient features of the recommendations are:

    I. TRAI reiterates early implementation of its recommendations on minimum channel spacing of 400 KHz for FM Radio broadcast issued on April 19, 2012, which will in effect increase the number FM channels in each city for auction.

     

    II. The period of permission to operate the existing FM channels on migration from Phase II to Phase III will be fifteen (15) years. The Phase II permission period was ten (10) years.

     

    III. Cutoff date for migration is to be decided by MIB after the completion of auction process for Phase III of FM Radio. However, the cutoff date for migration should not be later than March 31, 2015.

     

    IV. For calculating the migration fees, the cities have been categorized into 3 Groups X, Y & Z. This classification is based on the numbers of FM channels available in each city for the Phase III auction. Group X consists of 17 cities where no channels are available for auction in Phase III. Group Y consists of 26 cities where channels available for auction are 1/3rd or less of the total channels in that city. Finally, Group Z includes 42 cities where more than 1/3rd of the total channels in that city are available for auction.

     

    V. Regarding how to calculate the migration fee, the recommendations vary for the three groups.

     

    (i) For Group X, since no auction is possible for the cities herein, the migration fee is proposed to be derived from the percentage increase in the Phase III auction prices obtained in Group Z cities. It is recommended that the migration fee for the operators in the 17 cities in Group X should be higher of –

    • Phase II average bid of the city multiplied by a factor of 1.5; or
    • Phase II highest bid of the city increased by the average increase in auction prices in Group Z cities (vis-à-vis their reserve prices) in the same category in Phase III.

     

    (ii)   Group Y cities are those where auction will be held, but for a few channels. Since this is deemed to be a scarce market situation, the recommendation is that the migration fee for the existing channel operators should be higher of-

    • Phase II average bid of the Y city multiplied by a factor of 1.5; or
    • Phase II highest bid of the city increased by the average increase in auction prices in Group Z cities (vis-à-vis their reserve prices) in the same category in Phase III.

     

    …but, the lower of

    • The above; and
    • Actual Phase III auction price obtained in the city.

     

    (iii) Group Z cities, have sufficient FM frequencies available for auction and as such the actual auction price obtained in Phase III will be the migration fee.

     

    VI. In all of these cases, the residual value of the Phase II permission, calculated on a pro rata basis, is to be deducted from the Phase III migration fee.

     

    VII. The methodology to be adopted for determining the reserve price for fresh cities in Phase III should be reconsidered as the current methodology might jeopardise the auction.

     

    VIII. The cities in each group are:

    (i) Group X – Kolkata, Indore, Baroda, Bhopal, Jabalpur, Coimbatore, Visakhapatnam, Ranchi, Raipur, Gwalior, Jalandhar, Trivandrum, Kannur, Trichur, Gangtok, Panaji and Shimla.

    (ii) Group Y – Mumbai, Delhi, Chennai, Ahmedabad, Surat, Pune, Nagpur, Jaipur, Bangalore, Jamshedpur, Rajkot, Amritsar, Varanasi, Kochi, Madurai, Bhubaneswar, Siliguri, Guwahati, Jodhpur, Patiala, Udaipur, Kota, Puducherry, Mangalore, Hissar and  Karnal.

    (iii) Group Z – Lucknow, Kanpur, Hyderabad, Asansol, Patna, Agra, Allahabad, Vijayawada, Rourkela, Muzaffarpur, Kolhapur, Nasik, Aurangabad, Sholapur, Sangli, Ahmednagar, Jalagaon, Dhule, Bilaspur, Akola, Nanded, Chandigarh, Ajmer, Bareilly, Jammu, Srinagar, Bikaner, Aligarh, Gorakhpur,  Jhansi, Kozhikode, Tiruchi, Tirupati, Mysore, Tuticorin, Tirunelveli, Gulbarga, Rajahmundry, Warangal, Shillong,  Agartala and Itanagar.

     

    The Ministry of Information and Broadcasting (MIB) had sent a reference dated April 9, 2013, to the Authority, seeking recommendations of TRAI on Migration of FM Radio Broadcasters from Phase II to Phase III. The clarifications sought by TRAI were provided by the MIB by November 22, 2013.

     

    The TRAI issued a consultation paper on ‘Migration of FM Radio Broadcasters from Phase II to Phase III’ on December 3, 2013 seeking comments from the stakeholders. Open House Discussion was held at New Delhi on January 3, 2013. Taking into account the comments received during the consultation process and analysis of the issues, the Authority has finalised its recommendations.

     

    The full text of recommendations is available on TRAI’s website www.trai.gov.in.

     

  • The e-auction for Phase III is expected to begin in January 2013 and may take another two or three years until the entire FM Phase III expansion is completed

    FM Phase III: Pre-qualification bid for e-auctions starts Sept

    By Robin Thomas

     

    The FM radio industry has moved one step closer to the Phase III expansion as the Ministry of Information and Broadcasting (MIB) has called for tenders starting September 2012. The pre-qualification for the bidders is expected to be complete in another two months, following which the qualified companies will be allowed to participate in the e-auction for FM Phase III. The e-auction for Phase III is expected to begin in January 2013 and may take another two or three years until the entire FM Phase III expansion is completed.

     

    CS Kaushik, Deputy Secretary (FM), MIB (Ministry of Information and Broadcasting) and Uday Chawla, Secretary General, Association of Radio Operators for India (AROI) have confirmed the development to MxMIndia.

     

    It may be recalled that the Union Cabinet had given its nod to the e-auction for FM Phase III. In November 2011, an Inter-Ministerial Committee (IMC) was constituted in the MIB with an aim to guide and supervise the process of e-auction and to award the license of FM radio stations to private agencies under the FM radio Phase III expansions.

     

    FM Phase III policy seeks to extend FM radio services to about 227 new cities. Phase III will cover all cities with a population of one lakh and above, simultaneously, there will be a total of 839 new FM radio channels in 294 cities. In addition, FM radio stations will also be allowed to air news, but sourced from AIR (All India Radio) only.

     

     

  • The seventh edition of Indian Radio Forum (IRF) discussed quite a lot of issues on the strength and opportunities of radio, the road ahead for the medium, especially with FM Phase III expansion

    Takeaways from IRF 2012 (+Vdo)

    By A Correspondent

     

    The seventh edition of Indian Radio Forum (IRF) discussed quite a lot of issues on the strength and opportunities of radio, the road ahead for the medium, especially with FM Phase III expansion, how to maximize radio’s assets and how to gain share of market spend; the use of social media and monetizing it and much more. MxMIndia spoke to couple of industry veterans on their takeaways from the IRF 2012.

     

    Mr Premjeet Sodhi, COO, Lintas Media Group:

    One major takeaway with which I am going back is that while there are issues on how radio is performing commercially, there are certainly people who are passionate about the medium, and therefore, there are a lot of possibilities on how to do well on radio.

     

    The second major takeaway is the use of social media and radio, we had never thought of a subject as such. Radio has a lot of potential to work along with social media and be commercially successful as well.

     

    Third, I don’t think we are doing enough for radio, overall as an industry. There is, however, a lot of scope for improvement in this area.

     

    Mr B Surender, Senior Vice President, and National Sales Head, Red FM:

    I think the RAB (Radio Advertising Bureau) style of evangalising the medium is needed because UK’s RAB is so active in not only the developed markets like the UK, but it is also quite active in developing markets like South Africa.

     

    InIndia, probably, this kind of promotional activity is required for radio as a medium, because in India FM radio started very late and it did not get enough time before social media and the online or digital media arrived. Therefore, I believe there is a different need for a RAB kind of body which promotes radio.

     

    Mr Vinay Bhatia, Customer Care Associate and Senior Vice President – Marketing, Shoppers Stop:

    I think each industry within radio should develop its own tools, and this is really important in judging the input-output in efficacy because I am not chasing radio just for reach, OTS or number of impressions. Radio, as a channel, is a response medium and so it must deliver much beyond intermediary variables, it must deliver final business variables and I think radio can do that. However, it depends on how well a radio channel partners with a client, wherein the client is also willing to share some amount of data and information and a radio channel is also willing to partner it and jointly experimenting which works for all of us.

     

  • Key takeaway from India Radio Forum 2012: radio still needs evangelizing & find newer ways to up ROI

    Ten years on, is radio still an insignificant medium for advertisers? (Text & Video)

     

    By Robin Thomas (Videos by Insiyah Rangwala)

     

    Radio is said to be a medium that has been re-born. With the FM Phase III rollout anticipated this year, radio is expected to penetrate further into the country, as a result not only will there be an increase in revenues but, also the fact that newer revenue streams will open up. Multiple frequencies, allowing news and current affairs, sports broadcasting will also bring more innovations in radio, new genre radio stations and great amount of differentiation in content.

     

    Radio’s share of media spends, according to industry estimates, is expected to rise from 4 per cent to 5 per cent in two years. Among categories that advertise on Radio, Real Estate, Telecom, Retail, Education and TV channels are the ones advertise the most.

     

     

    What radio players say?

    Harshad Jain
    Joy Chakraborthy
    Joy Chakraborthy
    Apurva Purohit
    B Surender

    So, does radio still need to be evangalised? Is radio still insignificant to for advertisers? The India Radio Forum (IRF) 2012 discussed these issues. According to Mr Harshad Jain, Business Head – Radio and Entertainment, HT Media: “From a client standpoint, radio is still an insignificant medium. It all boils down to value addition of the medium – how can radio, as a medium, ensure value addition to its advertisers? The entire orientation has to be more than just vanilla FTCs. Radio is still an under-penetrated medium and has still a long way to go.”

     

    Mr Joy Chakraborthy, CEO, TV Today Network (which includes Oye! FM) pointed out that the Indian radio industry needs to stand united, not only on issues related to government regulations, but also for business related issues. “There needs to be some amount of unity among the radio fraternity. For the industry to survive we must stand together, not just for regulatory issues but even for businesses. Today radio is the most underpriced medium and unity within the industry will help us drive our sales.”

     

    Ms Apurva Purohit. CEO, Radio City was of the view that radio is still at an infancy stage and like any other medium, it will also take some time to evolve. She was quick to point out that television took many years to be what it is today. “Today the ad pie of radio is 4 per cent, the geographical coverage of radio is merely 30 per cent but, with Phase III the geographical coverage will see tremendous increase. Every year the number of advertisers on radio has only been growing, what we need to do now is to encourage these advertisers to spend more on radio and reach out to newer advertisers.”

     

    Mr B Surender, Senior Vice President and National Sales Head, Red FM said: “In the last two years radio saw tremendous growth. With the launch of Phase III also expected soon, the future of radio is certainly bright. Even radio stations outside metros saw tremendous growth, innovations in smaller towns and cities were high and in the next two years radio’s advertising pie is expected to reach 6 to 7 per cent.”

     

    The client perspective:

    Few years ago, radio was seen as a supplementary medium for advertisers wherein they would spend only the left over media spends on radio. This is said to be changing, slowly and steadily as advertisers are beginning to take radio seriously. There has also been an increase in the number of on-ground activations which has more or less become complementary for radio stations as a value addition to their clients. However, digital media, which was at one point in time an even smaller medium than radio is today, said to have become an even larger and a more powerful medium than radio and a possible reason could be because Internet, unlike radio, is a highly measureable medium.

     

    Giving a critical view on radio as an effective local medium, Mr Vinay Bhatia, Customer Care Associate and Senior Vice President Marketing and Loyalty said that radio has a very low share of mind and share of value medium to advertisers today. Digital on the other hand, which started off from 2 per cent of advertising share has a much higher share of mind and share of value. “To maximize assets, radio has to deliver business. Radio needs to world closely with clients, it can also look at which area of a city or town works better for clients. It can also partner with retailers to play radio in stores while customers are shopping. Radio is a response medium, therefore it allows a lot of engagement and interaction with listeners. However, there needs to be more innovations for advertisers on radio because clients love innovation and as a result innovation will bring more money for the radio station.”

     

    Arpita Menon, Head-Media Planning & Buying, Star India Pvt Ltd
    Premjeet Sodhi, COO, Lintas Media Group
    Harshad Jain, Business Head- Radio & Entertainment, HT Media

    Mr Shubhranshu Singh, Marketing Director-India and South Asia, Visa explained: “As far as Visa is concerned, radio has delivered us handsome returns. Radio, I believe, is economical and one can expect higher returns, it is certainly a cost effective medium. However, radio must come to clients as an industry and not as one single radio channel – it should be bolder in its approach towards clients and thus stay on top of mind of clients.”

     

    Mr Kartik Sharma, Managing Partner, Maxus had a slightly different take on the medium. He was of the view that radio is the oldest form of social media platform, it allows great amount of interactivity and engagement with the listeners. “Radio is in the business of producing great contents and so are the brands, I believe that both radio and digital can depend on each other. Radio is in the business of providing great content, the power of radio is sound and creativity therefore the mindset to learn this medium is very different.”

     

    Ms Shubha George, COO, MEC noted that in order to maximize radio’s asset and gain share of market spends, it needs to market itself more. She stated that radio today is sold and not marketed, what it needs is more marketing. She also pointed out that the industry must find ways to monetize every single phone calls and SMSes it receives and market them extensively.

     

    The Indian radio industry still needs a lot of evangelizing or marketing of the medium. Radio needs more nurturing, it needs to probably find newer ways of achieving better ROIs and thus increase greater share of media spends. More innovations in radio will also bring in more money and help it stay on top of advertisers’ minds. Radio needs to partner their clients and find newer ways to generate better ROIs for their clients. Radio needs to vigorously market itself to the advertisers and explain the power of the medium so that it becomes a primary medium for marketers.

     

    Image: Clipart, Imaging: Rafiq

     

  • Once FM phase III is rolled out, FM stations hope to witness more innovations along with differentiation in content. So, is there a scope for the two to co-exist or do traditional radio stations need to press the panic button?

    Rise of internet radio: What do traditional FM players think?

    By Robin Thomas

     

    The internet today has become the fastest growing medium in the country, and mobile has more or less become a necessity. So influential is the internet and mobile today that every medium is harping onto the digital bandwagon. The rise of internet and mobile has compelled even FM radio to spread their wings online. Radio Maska which plays 24×7 Hindi music claims to be India’s first Bollywood internet radio station, catering to Indian and NRI listeners.

     

    Besides, Timbre Media, a multi platform and multi genre radio company will soon be launching an internet radio station; VentureNet Partners, a Bengaluru based internet radio company will also launch Radiowalla, a premium model internet audio service that promises a variety of special interest internet radio channels. Realizing the potential of internet, even traditional FM radio stations have extended their reach online. Radio Mirchi for instance launched two internet radio stations- Meethi Mirchi, (plays contemporary melodies) and Purani Jeans (plays Hindi retro). Nearly 3.5 years ago, Radio City launched its music portal, PlanetRadiocity.com and only recently the music portal announced the launch of its new web radio genre, IndiPop Radio.

     

    Rachna Kanwar

    Rachna Kanwar – VP and Business Head, Digital Media and New Business, Radio City was of the view that the rise in internet radio stations is a reflection of people’s media consumption and the rising internet penetration in India and around the world. “More and more people are consuming music on the internet and therefore it is but natural that the potential has been tapped by players. While music has always been available illegally, today the whole process is getting legalized. Even music companies are realizing the potential of the digital platform and its demand and looking at the platform differently. This is the future of consumption and serious players realize they cannot ignore the phenomenon.”

     

    Prashant Panday

    For those complaining about lack of differentiation in FM radio, internet radio may have come as a huge relief as it promises variety in both music and non-music content. However, once FM phase III is rolled out, FM stations hope to witness more innovations along with differentiation in content. So, is there a scope for the two to co-exist or do traditional radio stations need to press the panic button? According to Prashant Panday, CEO Radio Mirchi, “No one needs to be worried about anything if they can adjust to the new realities. If an FM broadcaster prefers to remain only an FM broadcaster, it will be in trouble. But if it can seamlessly migrate to the internet platform, it will be able to maximize the combination of the two formats. So no….there is no need to worry.”

     

    Rabe T Iyer

    Rabe T Iyer, Business Head, BIG FM was of the opinion that online radio stations traditional FM stations need not worry about online radio and although there are limitations, online radio is an extension of traditional radio stations.

     

    Internationally, online radio stations augment terrestrial radio listening rather than substitute it. It’s augmented by users logging in from work and homes via the net and accessing their favourite stations. Yes, Online music with its niche music genre will fill the gap which traditional radio is unable to experiment with due to commercial consideration however traditional FM stations will not worry about growth of online radio.”

     

    In an earlier interaction with MxMIndia, M Sebastian, Co- founder and CEO, Timbre Media had said, “There is sufficient space for everyone to co-exist and grow. Rather than worrying, we need to identify areas of partnerships that lead to mutual benefit and faster growth and work towards realizing the full potential of the audio medium.”

     

    The listeners of internet radio stations are said to be those that are dissatisfied with the traditional FM radio stations however the market for internet radio is still small and currently caters to only specific or niche audience. Ashish Pherwani, Associate Director, Advisory Services, Ernst & Young believes that terrestrial FM radio stations will not have to worry about their internet radio counterparts at least for the next five years. He is also of the view that as a business there are many similarities as both internet radio and traditional FM radio stations are in the business of disseminating music.

     

    Speaking about the advantages and disadvantages of the internet radio and traditional radio stations, Mr Pherwani said, “As far as listening to radio is concerned, FM radio stations is absolutely free and this is where traditional radio has an upper hand over the internet radio. The disadvantage however is the fact that FM radio licenses are very expensive as a result many companies undergoing loses.”

     

    Unlike the traditional radio stations which do not charge listeners for listening to radio and is mainly advertising led, the business model of most internet radio stations are either subscription or advertising led or both depending on their radio channels. Like their traditional radio counterparts, internet radio stations too have to pay music royalty costs i.e. a minimum royalty and revenue sharing model. When asked to share his views on internet radio and the benefits it may have on the music companies, Rakesh Nigam, CEO, IPRS (The Indian Performing Right Society Limited) said, “Digital music in India is only picking up, with 3G and 4G services entering the market, internet radio stations will only grow. As a result the sale of music CD’s will only further decline as they will be heard online rather than be purchased. Thus there is potential for internet radio and as a result it will be a win-win situation for all including the music companies.”

     

    Although internet radio has been around for a while, it is still at a nascent stage in India and perhaps for many it is still a new format of radio station hence it needs to first spread awareness about its existence and features. Traditional FM players on the other hand have established themselves in the market and realizing the potential of the internet some of them have already taken their station online. Most of these FM players therefore find no reason to worry about the rising number of internet radio stations. They are of the opinion that differentiation and innovation in FM radio will further increase with phase III rollout and besides it will further increase the reach of traditional FM radio which the internet radio stations may find hard to match, at least initially.

     

  • Although contents across all radio channels are more or less restricted to music, it is believed that once FM phase III is rolled out and multiple frequencies allowed by the government, it will lead to more innovations in content and differentiation within the medium itself.

    @FF12: Phase III will bring more innovation in radio

     

    By A Correspondent

     

    Radio has often been criticized for lack of content innovation, that all radio stations sound the same and that there is no differentiation in the medium currently. Although contents across all radio channels are more or less restricted to music, it is believed that once FM phase III is rolled out and multiple frequencies allowed by the government, it will lead to more innovations in content and differentiation within the medium itself.

     

    One of the sessions at the FICCI-Frames 2012 was on ‘Radio: Innovations in Content’ wherein industry veterans discussed at length on the innovations in content radio is witnessing currently and the enormous innovation opportunities FM Phase III would allow. While the session was moderated by Apurva Purohit, CEO Radio City, the panel members included Rabe Iyer, Business Head, Big FM; Abhijit Avasthi, Executive Creative Director, O&M; Bhavna Somaaya, Columnist and Writer; and Charles Falzon, Chair of The Radio and Television Arts School of Media, Ryerson University.

     

    Ms Purohit kick-started the session stating that radio currently is in a schizophrenic stage wherein on one hand the medium is witnessing immense growth, it has a huge reach in the country and the FM listenership has also further increased with higher number of mobile phones, whereas on the other hand the overall ad pie of the medium is merely 4 per cent. Ms Purohit also pointed out that in the next two years the industry anticipates another phase of growth which will bring news, sports commentary, multiple frequencies, besides further expansion into towns and cities.

     

    According to Ms Somaaya, “Innovation is a very subjective term and the definition changes from person to person and the state of mind one is in. I believe innovation comes only in content because technology has been exhausted and there is a whole rainbow waiting for us as there could audio books, short stories, debates, helpline etc. Radio therefore is much more immediate that any other medium.”

     

    Speaking about the strengths of radio Mr Avasthi first admitted that out of all the media, it is the toughest to write radio spots. He explained, “The strength of radio I believe is one can conjure up a world in the listener’s mind. What you hear on radio today is mainly restricted to Bollywood music. There are so many kinds of music still to be explored and so many types of content that can be experimented, and to break this format I believe the industry requires some amount of courage to do so.  The moment programming in radio opens up then there will be plenty of interesting opportunities for advertising in radio itself.”

     

    Mr Falzon highlighted the use of digital medium as a complement to engaging the listeners, “We are all experiencing a paradigm shift on how entertainment is being consumed, across the world. India has infact a better opportunity especially with the phase III expansion coming that too at a time we can think about how to use the digital medium. Digital and social media in Canada for example is being used in many ways wherein the entertainment experience of radio has been extended beyond radio.”

     

    According to Mr Iyer, although 80 per cent of content on radio is music and 20 per cent on the packaging of music, there has been some innovation in the medium and with the phase III launch it will bring with it immense opportunities especially on the innovation and differentiation front. Speaking on the reason radio being left out at times during advertising campaigns, Mr Iyer believed the possible reason could be because the industry has not encouraged radio creativity which in itself is a huge opportunity.

     

    The Q&A session which followed the panel discussion saw many people questioning the lack of innovation and the dominance of Bollywood-centric music on radio. The panelists more or less agreed that radio in India has seen lack of innovations primarily because of government restrictions which is most likely to change with FM phase III is rolled out.

     

    Photograph: Fotocorp