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FM Stations Win Music Royalty Battle

FM stations to save Rs.80 crore according to the new arrangement on revenue sharing model.

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FM Stations Win Music Royalty Battle

FM Stations Win Music Royalty Battle

FM stations to save Rs.80 crore according to the new arrangement on revenue sharing model.

Rajat Arora | Delhi | August 26, 2010

publive-imageFM stations in India have finally won the long battle over music royalty which was a nightmare for all the operators so far. After the recommendations from Copyright Board, FM stations will pay the royalty to the music companies on a revenue sharing model as opposed to the earlier norm which required the radio industry to pay as much as 20 per cent of their revenues as royalties.

Around 2 per cent of net advertising revenues of radio companies will now be given as royalty tax to the music companies which is likely to bring much needed relief to radio operators which have been struggling with lower profitability on account of high royalty burden in the past.

At the moment, music companies charge fixed royalties of Rs. 55-60 lakh per station. So far the music companies have been charging the royalty on per hour basis @ Rs.850 per hour which was amounting up to Rs 100 crore for a FM station annually.

Now with the new arrangement of sharing 2% of net ad revenue, the royalty burden is expected to come down up to Rs.20 crore for FM stations.

As newer frequencies become available for bidding especially in smaller towns, the resolution of the royalty regime could be the single biggest push for the radio industry.

Rajat.Arora@BestMediaInfo.com

Info@BestMediaInfo.com

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