The ministry of information and broadcasting has floated a cabinet note on the fledgeling FM radio sector, recommending an increase in foreign direct investment limit and allowing news on the radio waves. I&B minister Ambika Soni, speaking at the World Economic Forum’s India Economic Summit this evening, said the proposal was to allow news sourced from state-run Akashvani and to hike the FDI cap to 26% from the current 20%. The note is currently doing the rounds of other ministries and will be presented to the cabinet as a proposal after the consultative process, the minister said. The third phase of FM Radio licensing is expected to happen by early 2010 and by then these modifications in policy are expected to come through, the minister added.
“We want to allow FM players to be able to broadcast some news, weather and sports updates and other relevant information. News will have to be sourced from Akashavani,” the minister said. The ministry is also proposing a revenue share between music royalty owners and FM stations, she added. Currently, some royalty owners insist on a flat fee irrespective of the size of the station. “We want a system where a small station can also afford the music by paying a percentage of its revenues,” the minister said.
At the Summit, which saw a spirited discussion on the future of the media and entertainment sector and the desired policy paradigm, Soni said the country needed a more robust ratings system. “Ratings have a direct impact on programming. It goads on production houses to create more competitive content, and there’s a lot of concern about how some lines are being crossed as a result. We get a lot of complaints about some of the programming on our channels and we need a system where the tastes of the whole country, including the rural areas, are being captured,” the minister said. She repeatedly asserted that the government was not looking at regulating content and said she was against any system of licensing or greater control by the state.
The unreal proliferation of channels in the country–over 500 at last count–came up for discussion at the Summit. While the simple math that the annual television revenues of $2 billion cannot support so many channels was pointed out, Soni said on the sidelines that there was concern over the profile of people who were launching these channels. “People are hired and then they lose their jobs overnight. They feel cheated and they come to me. What do I do?” she said, adding that the ministry is considering a more rigorous vetting process before granting licenses to TV channels. “It’s not a licensing process. We just want to ask more questions. Who is the CEO? Does he have any credentials in the media business?” she added.

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