MUMBAI: Acquiring a radio frequency or multiple frequencies has been quite the challenge for bidders who participated in the recently concluded Phase III auctions. After waiting ten years for the auctions, there is no doubting that every radio player wanted a piece of the pie. Unfortunately, that was not to be; and for potential players, who were unable to enter the radio industry, the wait has once again begun.
In April this year, the Information and Broadcasting Ministry (I&B Ministry) received a total of 28 applications for the Phase III e-auctions; out of which there were about 13 new entrants. However, by the end of the bid (or auction) there were five new entrants who acquired various frequencies, priced between Rs 0.29 to Rs 7.40 crores.
Sarthak Films Pvt Ltd, Odisha Television Ltd, Abhijit Realtors and Infraventures Pvt Ltd, RenderLive Films and Entertainment Pvt Ltd, and Abir Buildcon Pvt Ltd, are the new players in the radio industry. The highest bid went to Sarthak Films, and lowest to Abhijit Realtors and Infraventures for frequencies in Bhubaneswar and Akola, respectively.
Related Post
However, hopeful new entrants like Shahi Shipping Limited, Pratidin FM Private Limited and AM Television Private Limited, among others, failed to enter the radio industry. And the struggle to do so, after years of waiting, has been rather disappointing, but there are still hopes of participating in the next auction, whenever that may be.
Apart from blaming the pricing of frequencies, there is one player who felt defeated this auctions, particularly because of technology. Without holding back his thoughts, Prag AM Television chairman and MD Sanjiv Narain described the journey as “crazy”. “In spite of being qualified and sitting through the training, we did not get a chance to participate.” Sharing his ordeal he added, “In the first round itself, we were disqualified. It was a technology glitch which was ignored. The auction page did not open for bidding, and despite informing the auctioneer-C-1, and a Ministry representative (I&B), no action was taken.” He also pointed out the “absurd” and “abnormal” pricing, which has invited a monopoly of big players, and has dissuaded the entry of new players. Prag AM Television was planning to bid for Guwahati during this auction. However, this set back will not stop the company from participating in next auctions.
Big players, or in other words, existing national level players, went on to bid in millions. For most of these players it was a feasible move, but, the inflated cost came as a surprise to new players. Pratidin FM Private Limited, which is part of the Northeast-based Pratidin Group, was recently registered to run the radio business. Rishi Baruah, one of the promoters from Pratidin FM Pvt. Ltd. said, “We stopped at one point as our research proved that the market we were looking at could not be profitable as the prices sky rocketed.” After a week of bidding, the company backed away as the price of the Guwahati station reached a crore. For the group, Guwahati was the only station it wanted as its hold was limited to the North-east. The pricing surely works in the favour of a national player like Radio Mirchi (Entertainment Network India Limited), who won the frequency for Rs 4. 11crore, even though the market is not that mature, stated Baruah.
Baruah also pointed that if there was one more frequency, the pricing would probably not have been that high. Music and media consultant Vehrnon Ibrahim recalled the Phase I auction back in 1999. “The wining licence fee bids seemed to be unrealistic this time just like in 1999 where many paid the 10 per cent down payment but never actually became operational. That is why the fees were so high, unworkably high.” he said. Vehrnon also added, “The reason almost all stations play very similar music is not a lack of ideas or understanding of format programming but a reluctance to risk targeting tighter market groups because with high running costs plus high licence fees, targeting those segments makes no business sense.” He felt that issue has not been resolved with such high license fees this time again so some of the new stations may be lucky to survive. “However, with good programming advice and keeping running costs realistic there is still a lot of room for innovative formatting and creative content that can bring success but this means committing to a target group and most don’t get that” he added.
Abir Buildcon Pvt Ltd – which won a channel in Bilaspur, has set aside Rs 1.25 crores and is optimistic about bringing fresh content to radio. Commenting on need for fresh content on radio, Vehrnon who started Red FM and has programmed Radio One and Radio Indigo added, “It is a pretty exciting time for the brand new stations as they don’t have to alter perceptions and brands, they do however have to get the right balance of running costs and market segment revenue potential. Once they commit to their target audience and research has identified unique need gaps then formatting the radio station is just a matter of hiring the right content team. It’s like pushing a boulder up a hill, all the hard work is at the beginning when no one is watching, once the rock starts rolling down that hill it is pretty hard to stop.”
