India to add 730 FM stations. So why is the music industry sulking?

The Union government’s recent approval for 730 new FM radio stations across 234 cities and towns in India has drawn rumbling noises from certain quarters—India’s music industry.

The expansion, part of the third phase of India’s FM Radio Policy, is intended to increase local content, generate employment, and bolster governmental outreach in underserved areas, with an estimated reserve price of ₹784.87 crore.

Music labels, however, are sceptical, citing limited advertising volume and revenues from small cities and towns, and ongoing disputes over radio royalties with the industry fighting to be adequately compensated for their content.

“The news hasn’t created much buzz within the music industry given that it is unlikely to result in great monetary benefits for labels, or in turn, music creators," said a senior executive at a music label on condition of anonymity.

The executive pointed out that under Section 31 D of The Copyright Act, 1957, different rates apply to radio versus television broadcasting, often resulting in inadequate compensation for music labels.

According to the Ficci EY report 2024, only 4% of the music industry’s total revenue comes from syndication (which includes both radio and TV).

“This has resulted in negligible payments for labels even though barter arrangements like artiste access and fan greet-and-meet events could help with marketing and promotional campaigns of songs," the executive added.

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A conflict of rights

The longstanding conflict between radio broadcasters and music creators was underscored by a Bombay High Court ruling in May 2023 that mandated FM stations to compensate composers and lyricists for any copyrighted music they air.

Yet, a second music label executive said, the fight on royalties from radio broadcasters continues. This is because radio stations have been paying only about 2% of their net revenue to the rights holders.

“Also, advertising volume from such small markets would be much lower and the benefit at best, incremental," this executive said, also speaking anonymously.

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Besides, private radio platforms aren’t supportive of non-film or new music and typically wait for such songs to gain traction on social media such as YouTube, Instagram, or Facebook before airing them, he added.

“We would appreciate more support for newer content, as the current approach doesn’t significantly help the industry’s growth," Taurani said.

That said, music industry experts, including Taurani, believe the expansion of private FM radio stations to be a positive development. Besides making more platforms available to promote music, the initiative presents growth opportunities for radio stations, especially in small towns and cities, to promote local brands, creating mutually beneficial partnerships.

“This could offer scope for more people to consume content and tap towns where there aren’t enough channels dedicated to regional language music yet," said Ankit Sahni, an intellectual property and media tech lawyer.

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HT Media Ltd, the parent of Mint, owns Hindi radio channels Fever FM and Radio Nasha.