Category: TRAI

TRAI: 35 companies control 243 operational FM channels, seven control 169

New Delhi: Reliance Broadcast Network Ltd holds the largest number of FM radio channels with 45 Big FM channels in various cities.

Figures released by the Telecom Regulatory Authority of India as part of its consultation paper on ‘Issues related to Radio Audience Measurement and Ratings in India’ shows that seven companies hold the largest number of FM channels (169) of the 243 channels currently operational after Phase II.

Entertainment Network India Ltd through Radio Mirchi holds 36; South Asia FM Ltd through S FM has 23; Kal Radio Pvt. Ltd with S FM has 18; Music Broadcast Pvt. Ltd has 20 Radio City channels; D B Corp Ltd has 17 My FM channels; and BAG Information P Ltd runs ten Radio Dhamaal channels.A total of 28 companies run the remaining 74 FM channels in various parts of the country.

Radio broadcasting services were opened to private sector in 2000 when the Government auctioned 108 FM radio channels in the VHF band (88 –108 MHz) in 40 cities in Phase-I of FM Radio. Out of these, only 21 FM radio channels became operational and subsequently migrated to Phase-II in 2005. In Phase-II of FM Radio, a total of 337 channels were put on bid across 91 cities having population equal to or more than 300,000. Of 337 channels, 222 channels became operational. At present, 243 FM Radio channels are operational in 86 cities.

Phase-III auctions have begun to enable setting up of private FM Radio channels in all cities with a population of more than 100,000. As part of this Phase, auctions were done for 135 FM Radio channels in 69 cities where at least one channel of FM radio is already operational. Out of these, 91 FM Radio channels in 54 cities have been successfully auctioned.

A total of 831 more FM Radio channels will be put up for auction in 264 new cities under FM radio Phase-III in addition to remaining channels of 135 FM radio channels put for auction recently.

Terrestrial radio broadcasting which includes FM is a free-to-air service. A consumer can simply procure radio receiver equipment and tune into various radio channels available in that region. The business model of radio broadcasting service is based on advertisement revenue. Radio broadcasters are permitted to air commercials during their programme.

The revenue of radio broadcasting sector in 2014 was Rs 1720 crore, with a year-on year increase of 18 per cent from 2013 to 2014, driven by increasing popularity of radio in smaller towns and cities. The radio broadcasting sector revenues are expected to grow at a CAGR of 18 per cent to reach Rs. 3950 crore by 2019.

The total advertisement revenue of Media and Entertainment (M&E) industry was Rs. 41,400 crore in 2014, contributing approximately 31 per cent to the total M&E revenues. The advertisement revenue is expected to grow at a CAGR of 14.5 per cent to reach Rs 81,600 crore by 2019. Presently television and print media sectors corner the maximum advertisement revenue (approximately 80 per cent of the total revenues) spend in India. Though the radio broadcasting sector presently accounted for only 4 per cent of total advertisement revenue in 20143, it is however expected to garner 5 per cent of the total advertisement revenues by 2019.

March 16, 2016
TRAI: 35 companies control 243 operational FM channels, seven control 169

New Delhi: Reliance Broadcast Network Ltd holds the largest number of FM radio channels with 45 Big FM channels in various cities.

Figures released by the Telecom Regulatory Authority of India as part of its consultation paper on ‘Issues related to Radio Audience Measurement and Ratings in India’ shows that seven companies hold the largest number of FM channels (169) of the 243 channels currently operational after Phase II.

Entertainment Network India Ltd through Radio Mirchi holds 36; South Asia FM Ltd through S FM has 23; Kal Radio Pvt. Ltd with S FM has 18; Music Broadcast Pvt. Ltd has 20 Radio City channels; D B Corp Ltd has 17 My FM channels; and BAG Information P Ltd runs ten Radio Dhamaal channels.A total of 28 companies run the remaining 74 FM channels in various parts of the country.

Radio broadcasting services were opened to private sector in 2000 when the Government auctioned 108 FM radio channels in the VHF band (88 –108 MHz) in 40 cities in Phase-I of FM Radio. Out of these, only 21 FM radio channels became operational and subsequently migrated to Phase-II in 2005. In Phase-II of FM Radio, a total of 337 channels were put on bid across 91 cities having population equal to or more than 300,000. Of 337 channels, 222 channels became operational. At present, 243 FM Radio channels are operational in 86 cities.

Phase-III auctions have begun to enable setting up of private FM Radio channels in all cities with a population of more than 100,000. As part of this Phase, auctions were done for 135 FM Radio channels in 69 cities where at least one channel of FM radio is already operational. Out of these, 91 FM Radio channels in 54 cities have been successfully auctioned.

A total of 831 more FM Radio channels will be put up for auction in 264 new cities under FM radio Phase-III in addition to remaining channels of 135 FM radio channels put for auction recently.

Terrestrial radio broadcasting which includes FM is a free-to-air service. A consumer can simply procure radio receiver equipment and tune into various radio channels available in that region. The business model of radio broadcasting service is based on advertisement revenue. Radio broadcasters are permitted to air commercials during their programme.

The revenue of radio broadcasting sector in 2014 was Rs 1720 crore, with a year-on year increase of 18 per cent from 2013 to 2014, driven by increasing popularity of radio in smaller towns and cities. The radio broadcasting sector revenues are expected to grow at a CAGR of 18 per cent to reach Rs. 3950 crore by 2019.

The total advertisement revenue of Media and Entertainment (M&E) industry was Rs. 41,400 crore in 2014, contributing approximately 31 per cent to the total M&E revenues. The advertisement revenue is expected to grow at a CAGR of 14.5 per cent to reach Rs 81,600 crore by 2019. Presently television and print media sectors corner the maximum advertisement revenue (approximately 80 per cent of the total revenues) spend in India. Though the radio broadcasting sector presently accounted for only 4 per cent of total advertisement revenue in 20143, it is however expected to garner 5 per cent of the total advertisement revenues by 2019.

March 16, 2016
TRAI studying concerns of service providers about inter-operability of set top boxes for cable television

NEW DELHI: Some service providers have raised concerns about feasibility of technical interoperability of set top boxes to the Telecom Regulatory Authority of India.

TRAI, which is considering interoperability to enable consumers to switch to other service providers if they are not satisfied, says the objections relate to technical and commercial reasons. TRAI sources said the regulator is currently in a consultative process to understand their concerns before arriving at a solution.The objective of STB inter-operability is to make available STBs in open market, which will provide an exit option to the consumers who want to change their service providers due to some reasons or the other.This is expected to facilitate competition and improve quality of services offered to the consumers TRAI feels.

The regulatory framework of TRAI mandates the commercial interoperability by prescribing that the STBs/Customer Premises Equipments (CPE) to be provided on outright purchase basis, hire purchase basis and rental basis.

TRAI has also notified Tariff orders for Digital Addressable Cable TV Systems which prescribes a standard tariff package for offering of STBs to the subscribers. This tariff order provides an easy exit option to the subscribers and ensures availability of STBs at reasonable price while protecting the interest of the service providers.

Similarly for DTH services, TRAI has prescribed a tariff order which prescribes certain restrictions on the DTH operators offering schemes of Customer Premises Equipment. The tariff order for DTH services – the Telecommunication (Broadcasting and Cable) Services (Seventh) (the Direct to Home Services) Tariff Order 2015 of 1 April last year – has been challenged and is sub judice.

March 16, 2016
TRAI studying concerns of service providers about inter-operability of set top boxes for cable television

NEW DELHI: Some service providers have raised concerns about feasibility of technical interoperability of set top boxes to the Telecom Regulatory Authority of India.

TRAI, which is considering interoperability to enable consumers to switch to other service providers if they are not satisfied, says the objections relate to technical and commercial reasons. TRAI sources said the regulator is currently in a consultative process to understand their concerns before arriving at a solution.The objective of STB inter-operability is to make available STBs in open market, which will provide an exit option to the consumers who want to change their service providers due to some reasons or the other.This is expected to facilitate competition and improve quality of services offered to the consumers TRAI feels.

The regulatory framework of TRAI mandates the commercial interoperability by prescribing that the STBs/Customer Premises Equipments (CPE) to be provided on outright purchase basis, hire purchase basis and rental basis.

TRAI has also notified Tariff orders for Digital Addressable Cable TV Systems which prescribes a standard tariff package for offering of STBs to the subscribers. This tariff order provides an easy exit option to the subscribers and ensures availability of STBs at reasonable price while protecting the interest of the service providers.

Similarly for DTH services, TRAI has prescribed a tariff order which prescribes certain restrictions on the DTH operators offering schemes of Customer Premises Equipment. The tariff order for DTH services – the Telecommunication (Broadcasting and Cable) Services (Seventh) (the Direct to Home Services) Tariff Order 2015 of 1 April last year – has been challenged and is sub judice.

March 16, 2016
TRAI starts exercise on separate regulatory body for rating radio listenership; comments deadline 11 April

New Delhi: The Telecom Regulatory Authority of India wants to know if there is a need to regulate the radio audience measurement and rating services and whether this should be done by the regulator/government or self-regulatory bodies.

In a consultation paper issued today on ‘Issues related to Radio Audience Measurement and Ratings in India’, TRAI has also suggested some broad contours for an industry led body proposed to be formed for regulating the radio rating system and sought views of stakeholders on these.

It has said that written comments on the consultation paper should be sent by 11 April and counter-comments, if any, may be submitted by 25 April.

The paper also suggests some eligibility conditions for rating agencies and guidelines for methodology for audience measurement and wants views on these.

At the outset, TRAI notes that the Information and Broadcasting Ministry issued guidelines for television rating agencies and an industry body Broadcasting Audience Research Council (BARC) has been entrusted with the task of conducting TV audience measurement.

Similarly for the radio broadcasting sector, Radio Audience Measurement (RAM), which is an indicator of the number of listeners to a radio channels, has become essential.

At present, radio audience measurement in India is conducted by AIR and TAM Media Research. AIR carries out periodical large scale radio audience surveys on various AIR channels. TAM Media Research conducts radio audience measurement on private FM radio channels through an independent division, which is a joint service between IMRB International and Nielsen Media Research. It uses the paper diary method to measure radio listenership with a panel size of 480 individuals each in Bengaluru, Delhi, Mumbai and Kolkata and listenership data is provided on a weekly basis.

TRAI says the total advertising revenues of the radio broadcasting sector depend on the advertisement duration and the rates per unit time. The duration as well as the advertisements rates depends upon numbers and demographics of the radio listeners. Accordingly, there is a need for radio audience measurement which can measure the popularity of a channel or a programme for the advertisers and advertising agencies. This will assist them in selecting the right channel or programme at the right time to reach the target listeners. Further, it will also aid the radio channels in improving their programmes (both quality of the programme and content variety) for attracting more listeners.

The task of allocating resources for advertisements by advertisers and advertising agencies has become increasingly challenging with the growth in the number of FM radio channels and vastly increased variety of programs available. Advertising expenditures are typically guided by audience measurement in addition to other factors such as cost of reaching various audience segments, advertisement placements and programme schedules.

Advertisement revenues of the radio broadcasting sector are directly linked to listenership of radio channels. In case of newspapers and other print media, audience measurement is based on the number of copies sold. This physical count is however not possible in the case of radio and television sectors, wherein a different form of audience measurement is necessitated.

The Regulator has said that a few stakeholders, especially the FM radio operators have voiced concerns about the inadequate coverage and panel size of the radio audience measurement conducted by TAM Media Research. They have expressed reservations about the paper diary methodology used for such measurement. In fact transparency, trust, credibility and acceptability of the radio audience measurement are the key elements for its success. Better radio audience measurement and ratings would end up promoting a radio channel while poor radio ratings will make it relatively less popular amongst advertisers. Incorrect radio ratings may lead to encouraging production of content which may not be really popular while good content and programs may be adversely impacted on account of misplaced ratings. False and misplaced radio ratings, therefore, can not only end up affecting broadcasters and advertisers, but also adversely impact the quality of the programs being produced and aired to the public. Therefore, there is a need to create a regulatory framework which enables accurate measurements that correctly represent the appropriate ratings for radio channels.

TRAI said the consultation paper had been issued to prescribe a framework for radio rating system in India that is conducive to growth, forward looking, and addresses the concerns of the stakeholders while protecting the interests of the consumers. The main objectives of the consultation paper are to ensure growth of the radio broadcasting sector; ensure transparency in radio audience measurement and ratings; ensure greater diversity and better quality content.

TRAI also wants to know the views of stakeholders on the rating agency panel size (in terms of numbers of individuals) for different categories of cities that may be mandated in order to ensure statistical accuracy and adequate coverage representing various genres, regions, demographics etc. for a robust radio rating system.

It has asked if the desired panel size can be achieved immediately, and also if it has to be done in a phased manner, what the minimum initial panel size, quantum of increase and periodicity of such an increase in the panel size should be for different categories of cities.

It has sought views on what should the rollout framework for introducing radio rating system across all the cities for FM services be and should all cities be covered in a phased manner.

Stakeholders have been asked to give suggestions/ views as to how the confidentiality of individuals/households included in the panel can be ensured.

Comments have also been sought on the complaint redressal mechanism for which a suggestion has been made in the paper.

It wants to know if the rate card for sale and use of ratings data should be published in the public domain by the rating agencies.

Comments have also been sought on the cross holding restrictions for rating agencies as discussed in the paper.

TRAI wants to know views on the parameters/procedures suggested in the paper pertaining to mandatory disclosures for ensuring transparency and compliance of the prescribed accreditation guidelines by rating agencies. Similarly it has sought views on the parameters/procedures suggested pertaining to reporting requirements for ensuring effective monitoring and compliance of the prescribed accreditation guidelines by rating agencies.

Comments have been sought on the audit requirements for rating agencies and who should be eligible to audit the rating process/system. What regulatory initiatives are required to promote competition in radio rating services, TRAI wants to know.

In case guidelines/ rules for rating agency are laid down in the country, the regulator wants to know how much time should be given for complying with the prescribed rules to existing entities in the radio rating services which may not be in compliance with the guidelines.

March 15, 2016
TRAI starts exercise on separate regulatory body for rating radio listenership; comments deadline 11 April

New Delhi: The Telecom Regulatory Authority of India wants to know if there is a need to regulate the radio audience measurement and rating services and whether this should be done by the regulator/government or self-regulatory bodies.

In a consultation paper issued today on ‘Issues related to Radio Audience Measurement and Ratings in India’, TRAI has also suggested some broad contours for an industry led body proposed to be formed for regulating the radio rating system and sought views of stakeholders on these.

It has said that written comments on the consultation paper should be sent by 11 April and counter-comments, if any, may be submitted by 25 April.

The paper also suggests some eligibility conditions for rating agencies and guidelines for methodology for audience measurement and wants views on these.

At the outset, TRAI notes that the Information and Broadcasting Ministry issued guidelines for television rating agencies and an industry body Broadcasting Audience Research Council (BARC) has been entrusted with the task of conducting TV audience measurement.

Similarly for the radio broadcasting sector, Radio Audience Measurement (RAM), which is an indicator of the number of listeners to a radio channels, has become essential.

At present, radio audience measurement in India is conducted by AIR and TAM Media Research. AIR carries out periodical large scale radio audience surveys on various AIR channels. TAM Media Research conducts radio audience measurement on private FM radio channels through an independent division, which is a joint service between IMRB International and Nielsen Media Research. It uses the paper diary method to measure radio listenership with a panel size of 480 individuals each in Bengaluru, Delhi, Mumbai and Kolkata and listenership data is provided on a weekly basis.

TRAI says the total advertising revenues of the radio broadcasting sector depend on the advertisement duration and the rates per unit time. The duration as well as the advertisements rates depends upon numbers and demographics of the radio listeners. Accordingly, there is a need for radio audience measurement which can measure the popularity of a channel or a programme for the advertisers and advertising agencies. This will assist them in selecting the right channel or programme at the right time to reach the target listeners. Further, it will also aid the radio channels in improving their programmes (both quality of the programme and content variety) for attracting more listeners.

The task of allocating resources for advertisements by advertisers and advertising agencies has become increasingly challenging with the growth in the number of FM radio channels and vastly increased variety of programs available. Advertising expenditures are typically guided by audience measurement in addition to other factors such as cost of reaching various audience segments, advertisement placements and programme schedules.

Advertisement revenues of the radio broadcasting sector are directly linked to listenership of radio channels. In case of newspapers and other print media, audience measurement is based on the number of copies sold. This physical count is however not possible in the case of radio and television sectors, wherein a different form of audience measurement is necessitated.

The Regulator has said that a few stakeholders, especially the FM radio operators have voiced concerns about the inadequate coverage and panel size of the radio audience measurement conducted by TAM Media Research. They have expressed reservations about the paper diary methodology used for such measurement. In fact transparency, trust, credibility and acceptability of the radio audience measurement are the key elements for its success. Better radio audience measurement and ratings would end up promoting a radio channel while poor radio ratings will make it relatively less popular amongst advertisers. Incorrect radio ratings may lead to encouraging production of content which may not be really popular while good content and programs may be adversely impacted on account of misplaced ratings. False and misplaced radio ratings, therefore, can not only end up affecting broadcasters and advertisers, but also adversely impact the quality of the programs being produced and aired to the public. Therefore, there is a need to create a regulatory framework which enables accurate measurements that correctly represent the appropriate ratings for radio channels.

TRAI said the consultation paper had been issued to prescribe a framework for radio rating system in India that is conducive to growth, forward looking, and addresses the concerns of the stakeholders while protecting the interests of the consumers. The main objectives of the consultation paper are to ensure growth of the radio broadcasting sector; ensure transparency in radio audience measurement and ratings; ensure greater diversity and better quality content.

TRAI also wants to know the views of stakeholders on the rating agency panel size (in terms of numbers of individuals) for different categories of cities that may be mandated in order to ensure statistical accuracy and adequate coverage representing various genres, regions, demographics etc. for a robust radio rating system.

It has asked if the desired panel size can be achieved immediately, and also if it has to be done in a phased manner, what the minimum initial panel size, quantum of increase and periodicity of such an increase in the panel size should be for different categories of cities.

It has sought views on what should the rollout framework for introducing radio rating system across all the cities for FM services be and should all cities be covered in a phased manner.

Stakeholders have been asked to give suggestions/ views as to how the confidentiality of individuals/households included in the panel can be ensured.

Comments have also been sought on the complaint redressal mechanism for which a suggestion has been made in the paper.

It wants to know if the rate card for sale and use of ratings data should be published in the public domain by the rating agencies.

Comments have also been sought on the cross holding restrictions for rating agencies as discussed in the paper.

TRAI wants to know views on the parameters/procedures suggested in the paper pertaining to mandatory disclosures for ensuring transparency and compliance of the prescribed accreditation guidelines by rating agencies. Similarly it has sought views on the parameters/procedures suggested pertaining to reporting requirements for ensuring effective monitoring and compliance of the prescribed accreditation guidelines by rating agencies.

Comments have been sought on the audit requirements for rating agencies and who should be eligible to audit the rating process/system. What regulatory initiatives are required to promote competition in radio rating services, TRAI wants to know.

In case guidelines/ rules for rating agency are laid down in the country, the regulator wants to know how much time should be given for complying with the prescribed rules to existing entities in the radio rating services which may not be in compliance with the guidelines.

March 15, 2016
Q2-2016: TRAI Report: YoY and QoQ Radio ad revenue up 23 per cent

BENGALURU: The radio industry in India has reported the highest advertisement revenue so far for the quarter ended September 30, 2015 (Q2-2016) as per the latest TRAI report. Advertisement revenue in Q2-2016 reported to TRAI by 236 radio stations was Rs 481.56 crore, or Rs2.04 crore per station. The ad revenue per station reported in Q2-2016 increased 23.17 per cent year-on-year (YoY) as compared to Rs 1.66 crore in (Rs 399.26 crore reported by 241 radio stations) Q2-2015 and 23.81 per cent quarter-on-quarter (QoQ) as compared to Rs 1.65 crore (Rs 393.9 crore reported by 239 radio stations) in the immediate trailing quarter.

Before Q2-2016, the previous highest ad revenue was Rs 443.17 crore reported by 241 radio stations in Q3-2015 orRs 1.84 crore per station.

Note (1): (a)100,00,000 = 100 lakh = 10 million = 1 crore

(b) The author has taken the liberty to introduce a measure – average revenue per radio station. This is a rough yardstick and may not necessarily be indicative of a station or a networks performance, because factors such as geography and market conditions within the area of operations are among many that will also determine performance.

(c) This report is skewed more towards general financial numbers in terms of revenue and results, and not operational performance.

Trends across 18 consecutive quarters (four fiscal years, plus two quarters of the current fiscal)

Please refer to Fig A below – Ad revenue per station has been calculated based on combined ad revenue figures disclosed by TRAI across 18 consecutive quarters starting Q1-2012 until Q2-2016. During the period, in general, ad revenue from radio stations shows an increasing linear trend as is indicted by the broken black trend line. Over the financial years 2012, 2013, 2014 and 2015, it has been noted that ad revenue increases in the following order from lowest to highest – Q1, Q2, Q4, Q3. It may be noted that in fiscals 2012 and 2013 ad revenue per station was actually higher in Q4 than Q3, but in fiscals 2014 and 2015, it was highest in Q3.

Fig B below shows how ad revenues have changed YoY and QoQ since Q1-2013 until Q2-2016 (across 14 quarters). During this periodboth the YoY and QoQincrease was highest in Q2-2016 at approximately 23 per cent plus each. The previous highest YoY increase was Q2-2014 at 21.31 per cent, while the previous highest QoQ increase was Q3-2013 at 18.85 per cent. While there has never been a YoY decline, in the case of QoQ, revenues have declined in Q1-2013, Q1-2014, Q4-2014, Q1-2015, Q4-2015 and Q1-2016, hence further substantiating the above observations that Q1 of a financial year generally has the lowest ad revenue in a fiscal, while Q3, which is the festival quarter in India, has the highest ad revenue. Further, the QoQ drop in Q4 was not steep, and hence Q4 over the past two fiscals has the next highest ad revenues.

For the year ended March 31, 2015 (FY-2015), the numbers reported by the radio industry for the year were the probably the best (indiantelevision link, radioandusic link) until then. Despite an 8.88 percent QoQ (quarter on quarter) fall in average ad revenue per station in Q1-2016, the ad average revenue per station of Rs 1.65 crore was the best yet for the first quarter over a period of 4 years. In Q1-2015, YoY ad revenue grew 11.90 percent as compared to Q1-2014.Combined with the great Q2-2016 numbers, historical trends indicate that FY-2016 could be an even better year in terms of average revenue per station and overall revenues.

As per the latest TRAI data, the sum of average ad revenues per station for the first two quarters of 2016 at Rs 3.69 crore is already 54.4 per cent of the average ad revenue per station of Rs 6.78 crore for fiscal 2015. As mentioned above, Q1 and Q2 generally report the lowest and second lowest ad revenues respectively in a financial year. Results reported by a few companies for the third quarter ended 31 December 2015 (Q3-2016) indicate that YoY and QoQ revenues have risen. Add to this the revenue of the new stations acquired in phase III auctions if/once they start operations in the fourth quarter, the radio industry should report substantial revenue increases from FY-2016 onwards.

Let us look at how a few radio networks performed.

Note (2): (a) This report considers PAT posted by 2 radio companies (ENIL – Radio Mirchi, 32 radio stations; JagranPrakashan – Radio City – 20 radio stations), along with operating results of DB Corp (My FM, 17 stations); B. A.G. Films (Radio Dhamaal, 10 stations); HT Media (Fever FM, 4 stations); and TV Today (Oye! FM, 6 stations), or a total of 6 radio networks that represent 89, or 36.63 percent of the 243 private FM radio stations in Q2-2016.

(b) The Q3-2016 numbers of individual players in this report have been obtained from their filings with regulatory bodies, the TRAI number for Q3-2016 has been extrapolated and could prove to be inaccurate.

(c)Revenues for the sample stations mean Total Income from Operations and generally include ad revenue and other operating revenues.

(d) Phase III and other radio stations acquisitions: ENIL has received permission from the Ministry of Information & Broadcasting (MIB) to acquire 4 stations from TV Today Network Limited (Oye! FM), viz., those at Amritsar, Patiala, Shimla and Jodhpur – which the company says have been/will be re-branded and re-launched shortly as Mirchi, adding to its North India network strength. With another 7 stations acquired in phase III auctions, the core Mirchi brand will now be available in 43 cities. There are/will be a total of 39 FM radio stations that JagranPrakashan Limited currently has. This includes the existing 20 radio stations plus 11 stations acquired in phase III auctions and 8 radio stations under the brand Radio Mantra. Radio Mantra was earlier operated by Shri Puran Multimedia, Jagran’s promoter group. Besides, the group also runs a web radio network with 21 web radio streams under Planetradiocity.com. During the Phase III auctions, DB Corp (My FM) acquired 14 frequencies, through which MY FM will extend its presence to seven states and 30 cities with 31 stations. HT Media acquired 10 radio frequencies during phase III auctions, taking its total radio stations to 14. However these changes are not considered here, for this report pertains to the period before all the new stations have started operations.

(e) In mid-December 2015, Radio Mirchi added two more station, those at Amritsar and Patalia. It is presumed by the author that the addition of these two mare station brought in no significant addition to income to Radio Mirchi in Q3-2016, hence Radio Mirchi’s revenue per station has been calculated on the basis of 32 stations in this paper for that quarter. However, actual facts could be different.

Entertainment Network India Limited (ENIL) that operates brand Radio Mirchi is the only separately listed radio company in India and one of the most profitable ones by far. It must be noted that in Q2-2016, ENIL’s revenue made up 50.6 per cent of the combined revenue of the six entities in this paper. In Q3-2016, ENIL contributed to 51.6 per cent of combined revenues. Other stations/radio brands of consequence, whose results are within the public domain have been considered in this report.

Please refer to Fig C below. It may be noted that the figure of Rs2.30 crore in blue for All India ad revenue per station is a projection based on certain assumptions made by the author, and could be incorrect.

In Q2-2016 (30 September 2015), combined revenues of the six entities in this report had increased 10.3 per cent YoY and had increased 15.5 per cent QoQ, much lower than the YoY andQoQ increases reported by TRAI (23.17 per cent and 23.81 per cent respectively)

Combined revenues of the 89 radio stations run by the six entities increased 19.2 per cent YoY to Rs 278.16 crore in Q3-2016 (31 December 2016) as compared to Rs 233.41 crore and increased 21 per cent QoQ as compared to Rs 229.95 crore.

Combined operating profit/PAT in Q3-2016 of the six entities declined 11.1 per cnt YoY to Rs 60.31 crore as compared to Rs 67.83 crore, but increased 36.6 per cent QoQ from Rs 44.15 crore.

Music Broadcast Limited (MBL) which runs Radio City reported 14.9 YoY (year-on-year) growth in operating revenue for Q3-2016 at Rs 64.80 crore as compared to Rs 56.39 crore for the corresponding prior year quarter. Revenue in Q3-2016 was 16.7 per cent higher QoQ (quarter-on-quarter) as compared to Rs 55.54 crore in the immediate trailing quarter.

B. A. G. Films Limited Radio segment Radio Dhamaalreported 1.8 per cent QoQ drop in operating revenue growth at Rs 2.18 crore as compared to Rs 2.22 crore and 10 per cent YoY decline in revenue as compared to Rs2.43 crore.

HT Media’s radio segment Fever 104 FM reported a 25 per cent YoY increase in operating revenue to Rs 32.26 crore as compared to Rs 28.81 crore and grew 10 per cent QoQ as compared to Rs 29.34 crore.

ENIL reported 22.9 percent YoY increase in Total Income from Operations (TIO) in the quarter ended December 31, 2015 (Q3-2016, current quarter) at Rs 143.57 crore as compared to the Rs 117.69 crore and 23.5 percent higher QoQ as compared to Rs 116.27 crore in the immediate trailing quarter.

DB Corp’s My FMrevenue increased 25.8 percent YoY at Rs 32.32 crore as compared to Rs 25.69 crore) and a 34.9 percent QoQ growth as compared to Rs 23.96 crore.

TV Today’s Network Limited radio segment Oye! reported49.4 percent YoY decline in operating revenue at Rs 2.02 crore as compared to Rs 4.00 crore, and 22.5 percent lower operating revenue as compared to Rs 2.61 crore in the immediate trailing quarter.

MBL’s (Radio City) profit after tax (PAT) in Q3-2016 declined 5.4 per cent YoY to Rs 16.17 crore (25 per cent margin) as compared to Rs 17.10 crore (30.3 per cent margin), but increased by more than a third (increased by 34.2 per cent) from Rs 12.05 crore (21.7 per cent margin). PAT for 9M-2016 declined 30.7 per cent to Rs 25.99 crore (15.5 per cent margin) from Rs 37.53 crore (24.9 per cent margin) in the corresponding period of the previous year.

Dhamaal’s operating profit in Q3-2016 was less than a third (down 68.1 per cent) QoQ at Rs 0.23 crore as compared to Rs 0.73 crore and less than a fourth (down 75.5 per cent) YoY as compared to Rs 0.94 crore in Q2-2015.

Fever reported 21 per cent decline in operating profit in Q3-2016 at Rs 7.46 crore as compared to Rs 9.44 crore, but was 94.3 per cent more QoQ than of Rs 3.84 crore.

ENIL’s profit after tax (PAT) in Q3-2016 declined 18.8 percent to Rs 26.99 crore (18.8 percent margin) as compared to Rs 32.84 crore (28.1 percent margin) and was flat QoQ as compared to Rs 26.97 crore (23.2 percent margin) in Q2-2016. The company had entered the Rs 100 crore PAT club in FY-2015 with a PAT of Rs 105.98 crore (24.2 percent margin) on a TIO of Rs 483.48 crore.

My FM reported almost double the operating profit (grew by 98.7 percent) QoQ at Rs 12 crore as compared to Rs 6.04 crore and increased 27.1 percent YoY as compared to Rs 9.44 crore.

Oye! loss in the current quarter was higher at Rs2.54 crore as compared to the operating loss of Rs1.94 crore in Q3-2015 but lower than the operating loss of Rs 5.48 crore in Q2-2016.

March 7, 2016
Q2-2016: TRAI Report: YoY and QoQ Radio ad revenue up 23 per cent

BENGALURU: The radio industry in India has reported the highest advertisement revenue so far for the quarter ended September 30, 2015 (Q2-2016) as per the latest TRAI report. Advertisement revenue in Q2-2016 reported to TRAI by 236 radio stations was Rs 481.56 crore, or Rs2.04 crore per station. The ad revenue per station reported in Q2-2016 increased 23.17 per cent year-on-year (YoY) as compared to Rs 1.66 crore in (Rs 399.26 crore reported by 241 radio stations) Q2-2015 and 23.81 per cent quarter-on-quarter (QoQ) as compared to Rs 1.65 crore (Rs 393.9 crore reported by 239 radio stations) in the immediate trailing quarter.

Before Q2-2016, the previous highest ad revenue was Rs 443.17 crore reported by 241 radio stations in Q3-2015 orRs 1.84 crore per station.

Note (1): (a)100,00,000 = 100 lakh = 10 million = 1 crore

(b) The author has taken the liberty to introduce a measure – average revenue per radio station. This is a rough yardstick and may not necessarily be indicative of a station or a networks performance, because factors such as geography and market conditions within the area of operations are among many that will also determine performance.

(c) This report is skewed more towards general financial numbers in terms of revenue and results, and not operational performance.

Trends across 18 consecutive quarters (four fiscal years, plus two quarters of the current fiscal)

Please refer to Fig A below – Ad revenue per station has been calculated based on combined ad revenue figures disclosed by TRAI across 18 consecutive quarters starting Q1-2012 until Q2-2016. During the period, in general, ad revenue from radio stations shows an increasing linear trend as is indicted by the broken black trend line. Over the financial years 2012, 2013, 2014 and 2015, it has been noted that ad revenue increases in the following order from lowest to highest – Q1, Q2, Q4, Q3. It may be noted that in fiscals 2012 and 2013 ad revenue per station was actually higher in Q4 than Q3, but in fiscals 2014 and 2015, it was highest in Q3.

Fig B below shows how ad revenues have changed YoY and QoQ since Q1-2013 until Q2-2016 (across 14 quarters). During this periodboth the YoY and QoQincrease was highest in Q2-2016 at approximately 23 per cent plus each. The previous highest YoY increase was Q2-2014 at 21.31 per cent, while the previous highest QoQ increase was Q3-2013 at 18.85 per cent. While there has never been a YoY decline, in the case of QoQ, revenues have declined in Q1-2013, Q1-2014, Q4-2014, Q1-2015, Q4-2015 and Q1-2016, hence further substantiating the above observations that Q1 of a financial year generally has the lowest ad revenue in a fiscal, while Q3, which is the festival quarter in India, has the highest ad revenue. Further, the QoQ drop in Q4 was not steep, and hence Q4 over the past two fiscals has the next highest ad revenues.

For the year ended March 31, 2015 (FY-2015), the numbers reported by the radio industry for the year were the probably the best (indiantelevision link, radioandusic link) until then. Despite an 8.88 percent QoQ (quarter on quarter) fall in average ad revenue per station in Q1-2016, the ad average revenue per station of Rs 1.65 crore was the best yet for the first quarter over a period of 4 years. In Q1-2015, YoY ad revenue grew 11.90 percent as compared to Q1-2014.Combined with the great Q2-2016 numbers, historical trends indicate that FY-2016 could be an even better year in terms of average revenue per station and overall revenues.

As per the latest TRAI data, the sum of average ad revenues per station for the first two quarters of 2016 at Rs 3.69 crore is already 54.4 per cent of the average ad revenue per station of Rs 6.78 crore for fiscal 2015. As mentioned above, Q1 and Q2 generally report the lowest and second lowest ad revenues respectively in a financial year. Results reported by a few companies for the third quarter ended 31 December 2015 (Q3-2016) indicate that YoY and QoQ revenues have risen. Add to this the revenue of the new stations acquired in phase III auctions if/once they start operations in the fourth quarter, the radio industry should report substantial revenue increases from FY-2016 onwards.

Let us look at how a few radio networks performed.

Note (2): (a) This report considers PAT posted by 2 radio companies (ENIL – Radio Mirchi, 32 radio stations; JagranPrakashan – Radio City – 20 radio stations), along with operating results of DB Corp (My FM, 17 stations); B. A.G. Films (Radio Dhamaal, 10 stations); HT Media (Fever FM, 4 stations); and TV Today (Oye! FM, 6 stations), or a total of 6 radio networks that represent 89, or 36.63 percent of the 243 private FM radio stations in Q2-2016.

(b) The Q3-2016 numbers of individual players in this report have been obtained from their filings with regulatory bodies, the TRAI number for Q3-2016 has been extrapolated and could prove to be inaccurate.

(c)Revenues for the sample stations mean Total Income from Operations and generally include ad revenue and other operating revenues.

(d) Phase III and other radio stations acquisitions: ENIL has received permission from the Ministry of Information & Broadcasting (MIB) to acquire 4 stations from TV Today Network Limited (Oye! FM), viz., those at Amritsar, Patiala, Shimla and Jodhpur – which the company says have been/will be re-branded and re-launched shortly as Mirchi, adding to its North India network strength. With another 7 stations acquired in phase III auctions, the core Mirchi brand will now be available in 43 cities. There are/will be a total of 39 FM radio stations that JagranPrakashan Limited currently has. This includes the existing 20 radio stations plus 11 stations acquired in phase III auctions and 8 radio stations under the brand Radio Mantra. Radio Mantra was earlier operated by Shri Puran Multimedia, Jagran’s promoter group. Besides, the group also runs a web radio network with 21 web radio streams under Planetradiocity.com. During the Phase III auctions, DB Corp (My FM) acquired 14 frequencies, through which MY FM will extend its presence to seven states and 30 cities with 31 stations. HT Media acquired 10 radio frequencies during phase III auctions, taking its total radio stations to 14. However these changes are not considered here, for this report pertains to the period before all the new stations have started operations.

(e) In mid-December 2015, Radio Mirchi added two more station, those at Amritsar and Patalia. It is presumed by the author that the addition of these two mare station brought in no significant addition to income to Radio Mirchi in Q3-2016, hence Radio Mirchi’s revenue per station has been calculated on the basis of 32 stations in this paper for that quarter. However, actual facts could be different.

Entertainment Network India Limited (ENIL) that operates brand Radio Mirchi is the only separately listed radio company in India and one of the most profitable ones by far. It must be noted that in Q2-2016, ENIL’s revenue made up 50.6 per cent of the combined revenue of the six entities in this paper. In Q3-2016, ENIL contributed to 51.6 per cent of combined revenues. Other stations/radio brands of consequence, whose results are within the public domain have been considered in this report.

Please refer to Fig C below. It may be noted that the figure of Rs2.30 crore in blue for All India ad revenue per station is a projection based on certain assumptions made by the author, and could be incorrect.

In Q2-2016 (30 September 2015), combined revenues of the six entities in this report had increased 10.3 per cent YoY and had increased 15.5 per cent QoQ, much lower than the YoY andQoQ increases reported by TRAI (23.17 per cent and 23.81 per cent respectively)

Combined revenues of the 89 radio stations run by the six entities increased 19.2 per cent YoY to Rs 278.16 crore in Q3-2016 (31 December 2016) as compared to Rs 233.41 crore and increased 21 per cent QoQ as compared to Rs 229.95 crore.

Combined operating profit/PAT in Q3-2016 of the six entities declined 11.1 per cnt YoY to Rs 60.31 crore as compared to Rs 67.83 crore, but increased 36.6 per cent QoQ from Rs 44.15 crore.

Music Broadcast Limited (MBL) which runs Radio City reported 14.9 YoY (year-on-year) growth in operating revenue for Q3-2016 at Rs 64.80 crore as compared to Rs 56.39 crore for the corresponding prior year quarter. Revenue in Q3-2016 was 16.7 per cent higher QoQ (quarter-on-quarter) as compared to Rs 55.54 crore in the immediate trailing quarter.

B. A. G. Films Limited Radio segment Radio Dhamaalreported 1.8 per cent QoQ drop in operating revenue growth at Rs 2.18 crore as compared to Rs 2.22 crore and 10 per cent YoY decline in revenue as compared to Rs2.43 crore.

HT Media’s radio segment Fever 104 FM reported a 25 per cent YoY increase in operating revenue to Rs 32.26 crore as compared to Rs 28.81 crore and grew 10 per cent QoQ as compared to Rs 29.34 crore.

ENIL reported 22.9 percent YoY increase in Total Income from Operations (TIO) in the quarter ended December 31, 2015 (Q3-2016, current quarter) at Rs 143.57 crore as compared to the Rs 117.69 crore and 23.5 percent higher QoQ as compared to Rs 116.27 crore in the immediate trailing quarter.

DB Corp’s My FMrevenue increased 25.8 percent YoY at Rs 32.32 crore as compared to Rs 25.69 crore) and a 34.9 percent QoQ growth as compared to Rs 23.96 crore.

TV Today’s Network Limited radio segment Oye! reported49.4 percent YoY decline in operating revenue at Rs 2.02 crore as compared to Rs 4.00 crore, and 22.5 percent lower operating revenue as compared to Rs 2.61 crore in the immediate trailing quarter.

MBL’s (Radio City) profit after tax (PAT) in Q3-2016 declined 5.4 per cent YoY to Rs 16.17 crore (25 per cent margin) as compared to Rs 17.10 crore (30.3 per cent margin), but increased by more than a third (increased by 34.2 per cent) from Rs 12.05 crore (21.7 per cent margin). PAT for 9M-2016 declined 30.7 per cent to Rs 25.99 crore (15.5 per cent margin) from Rs 37.53 crore (24.9 per cent margin) in the corresponding period of the previous year.

Dhamaal’s operating profit in Q3-2016 was less than a third (down 68.1 per cent) QoQ at Rs 0.23 crore as compared to Rs 0.73 crore and less than a fourth (down 75.5 per cent) YoY as compared to Rs 0.94 crore in Q2-2015.

Fever reported 21 per cent decline in operating profit in Q3-2016 at Rs 7.46 crore as compared to Rs 9.44 crore, but was 94.3 per cent more QoQ than of Rs 3.84 crore.

ENIL’s profit after tax (PAT) in Q3-2016 declined 18.8 percent to Rs 26.99 crore (18.8 percent margin) as compared to Rs 32.84 crore (28.1 percent margin) and was flat QoQ as compared to Rs 26.97 crore (23.2 percent margin) in Q2-2016. The company had entered the Rs 100 crore PAT club in FY-2015 with a PAT of Rs 105.98 crore (24.2 percent margin) on a TIO of Rs 483.48 crore.

My FM reported almost double the operating profit (grew by 98.7 percent) QoQ at Rs 12 crore as compared to Rs 6.04 crore and increased 27.1 percent YoY as compared to Rs 9.44 crore.

Oye! loss in the current quarter was higher at Rs2.54 crore as compared to the operating loss of Rs1.94 crore in Q3-2015 but lower than the operating loss of Rs 5.48 crore in Q2-2016.

March 7, 2016
Total of 149 news and non-news pay channels violated adcap shows study

NEW DELHI: Even as the adcap case continues to drag with hearing slated for later this month, a study shows that a total of 149 pay channels including 28 news and current affairs continue to violate the regulations for telecasting a maximum of twelve minutes of advertisements and commercials.

The report released by the Telecom Regulatory Authority of India shows that the number of violators among news channels has come down but that non-news channels has risen sharply as on 27 December 2015.

Average duration per hour of Advertisements (Commercial & Self promotional) during peak hours (7pm ?10 PM) in Pay News Channels for the period 28 September to 27 December shows that the highest of these is 22.66 minutes by NDTV 24X7 and the lowest is 12.42 minutes by CNBC TV 18 Prime HD..

Among pay non-news channels for the same period, the highest is 23.99 minutes by B4U Movies and the lowest is 12.13 by Sun TV Network’s Adhitya.

There are at least twelve news and 37 non-news channels clocking more than fifteen minutes per hour.

TRAI has made it clear that “the information is based on the data submitted by the broadcasters and TRAI bears no responsibility for correctness of same. As per information available with TRAI, rest of the Pay News and non-news channels are carrying less than 12 minutes of average duration per hour of advertisements (Commercial & Self promotional) during peak hours (7PM – 10 pm)”.

While asking the Telecom Regulatory Authority of India not to take any coercive action against any channel pending hearing of the case, the Delhi High Court had asked all channels and TRAI to keep a record of the advertising time consumed including commercials.

The petition had been filed by the News Broadcasters Association and some channels challenging the TRAI decision to implement the directive of 12 minutes contained in the Cable Television Networks (Regulation) Act 1995. The Information and Broadcasting Ministry and TRAI are the respondents in the petition.

After the Information and Broadcasting Ministry told the Court on 27 November that it was discussing the issue with broadcasters, the matter was put off to 11 February and then to 29 March. In the 11 February hearing, Discovery Communications moved for intervention while Home Cable sought early hearing.

In its intervention MSO Home Cable Network (P) Ltd said it wanted to intervene as it was directly affected by the outcome of the present petition. It wanted the NBA petition to be dismissed and added: “The Pay channel broadcasters are profiteering at the expense of subscribers and the DPO’s. There is no justification for changing monthly subscription when commercial advertisements are inserted. The Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations 2012 (with Amendments thereafter) is justified to the extent they are applicable to Pay Channels. The pay channel broadcasters cannot charge the subscription fee while inserting commercials into the content or in the alternative, the subscribers have to be compensated for the revenue earned on the basis of their being subscribers of the channels.”

Interestingly, I and B Minister Arun Jaitley had in January last year said that he was in favour of any ad cap in the print or electronic media.

In the petition, the news channels have taken the plea that most of them are free to air and therefore do not get any subscription fee from the viewers as the GEC channels do.

March 3, 2016
Total of 149 news and non-news pay channels violated adcap shows study

NEW DELHI: Even as the adcap case continues to drag with hearing slated for later this month, a study shows that a total of 149 pay channels including 28 news and current affairs continue to violate the regulations for telecasting a maximum of twelve minutes of advertisements and commercials.

The report released by the Telecom Regulatory Authority of India shows that the number of violators among news channels has come down but that non-news channels has risen sharply as on 27 December 2015.

Average duration per hour of Advertisements (Commercial & Self promotional) during peak hours (7pm ?10 PM) in Pay News Channels for the period 28 September to 27 December shows that the highest of these is 22.66 minutes by NDTV 24X7 and the lowest is 12.42 minutes by CNBC TV 18 Prime HD..

Among pay non-news channels for the same period, the highest is 23.99 minutes by B4U Movies and the lowest is 12.13 by Sun TV Network’s Adhitya.

There are at least twelve news and 37 non-news channels clocking more than fifteen minutes per hour.

TRAI has made it clear that “the information is based on the data submitted by the broadcasters and TRAI bears no responsibility for correctness of same. As per information available with TRAI, rest of the Pay News and non-news channels are carrying less than 12 minutes of average duration per hour of advertisements (Commercial & Self promotional) during peak hours (7PM – 10 pm)”.

While asking the Telecom Regulatory Authority of India not to take any coercive action against any channel pending hearing of the case, the Delhi High Court had asked all channels and TRAI to keep a record of the advertising time consumed including commercials.

The petition had been filed by the News Broadcasters Association and some channels challenging the TRAI decision to implement the directive of 12 minutes contained in the Cable Television Networks (Regulation) Act 1995. The Information and Broadcasting Ministry and TRAI are the respondents in the petition.

After the Information and Broadcasting Ministry told the Court on 27 November that it was discussing the issue with broadcasters, the matter was put off to 11 February and then to 29 March. In the 11 February hearing, Discovery Communications moved for intervention while Home Cable sought early hearing.

In its intervention MSO Home Cable Network (P) Ltd said it wanted to intervene as it was directly affected by the outcome of the present petition. It wanted the NBA petition to be dismissed and added: “The Pay channel broadcasters are profiteering at the expense of subscribers and the DPO’s. There is no justification for changing monthly subscription when commercial advertisements are inserted. The Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations 2012 (with Amendments thereafter) is justified to the extent they are applicable to Pay Channels. The pay channel broadcasters cannot charge the subscription fee while inserting commercials into the content or in the alternative, the subscribers have to be compensated for the revenue earned on the basis of their being subscribers of the channels.”

Interestingly, I and B Minister Arun Jaitley had in January last year said that he was in favour of any ad cap in the print or electronic media.

In the petition, the news channels have taken the plea that most of them are free to air and therefore do not get any subscription fee from the viewers as the GEC channels do.

March 3, 2016