Association of Radio Operators for India writes to the government for a bailout package

• The radio industry has been grappling with decreasing ad spends on the medium.
• In wake of the Coronavirus outbreak, the Association of Radio Operators for India has written to the government seeking a bailout package.

The Association of Radio Operators for India (AROI) has written a letter to the government seeking a bailout package, in view of the impact of the Coronavirus outbreak on the industry. In the letter, the industry body has requested the government to consider the concession requests it had made in December 2019.

Considering a lot of brands are cutting back on spending on media, the industry body is expecting the radio industry, that is already grappling with decreasing ad spends, to be further impacted. And to seek a government intervention, AROI President Anurradha Prasad has written this letter to Union minister of information and broadcasting Prakash Javadekar on March 16.

As of now, the industry body has asked for a three-pronged bailout package. Speaking about the request Nisha Narayanan, Director & COO, RED FM and Magic FM said, “The industry has collectively asked for a three-pronged bailout package till the economy stabilizes. This included a one-year moratorium on all licence fees and charges by the government and Prasar Bharti, and restoration of government advertising on radio, besides clearing the long-pending payments from the Directorate of Advertising and Visual Publicity. We hope that the government helps restore normalcy in this sector in these desperate times.”

Emphasizing on the criticality of the request from AROI to the government at this juncture, Abraham Thomas, CEO, Big FM said, "The FM Radio business was already reeling under the effects of the cut in Ad spends by advertisers including Government with most players expected to degrow by -20% this fiscal. Covid19 crises has put additional pressure on us to invest behind uninterrupted business continuity services. Ad spends on the other end has completely dried up. Radio is a fixed cost business and directly/indirectly employs close to 20,000 employees. The impact of all this is going to be huge."

For the past few years, advertising on radio has seen a decrease. Even advertising from government that used to account for 10% of the industry’s revenue, has cut down on its spend on the medium. That, coupled with the Coronavirus crisis, has further hit radio ad spends. The aim of this bailout package is to bring about some relief for a lot of stations that are planning steps for cutting cost, including cutting down on staff.

The primary asks of the AROI from the government, points out Thomas, are as follows:

• Increased Spending: Government which used to account for almost 15% of the Radio Business, has decreased spends by over 70% in the last year alone. Spends at this time will help rally the citizens together and keep the communication live, local and credible.
• Clearing Overdue Outstanding payments: Over 6 months of Govt. outstanding payments are due and clearing the payments now will be a big relief for the industry.
• Defray Costs: A waiver on License fees, Prasar Bharti rentals, reduction in GST rate and moratorium on payment of GST, on Loan & interest pay-outs are some of the requests made by the AROI to the government.