Govt revises ad rates for private FM radio stations after 8 years

The Ministry of Information and Broadcasting (MIB) has approved new rates for the Central Bureau of Communication (CBC) advertisements for private FM radio stations, after seven years, based on the recommendations of the Rate Structure Committee set up by it.

In a statement, MIB said, "The Ministry has approved new rates for advertisements to be issued on private FM radio stations for the Government policies and programmes based on the recommendations of the Rate Structure Committee set up by it.  This marks a significant milestone in the ongoing efforts of the Ministry to ensure a fair and sustainable pricing framework for private FM radio stations."

The new rates approved by the Ministry in the month of September, 2023  includes a 43% increase in the base rate taking into account the rising costs dynamics for the period of December 2015 to March 2023.

According to the Ministry, with this increase, the gross base rate for FM radio advertisement will increase from Rs 52 to Rs 74 per ten seconds. This adjustment is intended to maintain parity with current market rates. The increase in Gross base Rate will also be beneficial for more than 400 Community Radio Stations that are currently operational in the country.

Further building on the base rate, the Ministry has also decided to continue with the existing pricing formula for calculating City Wise rates. The pricing formula takes into various factors like city population and listenership data from the India Readership Survey (IRS) of 2019.

"Based on this formula along with the enhanced base rate almost all Private FM Radio Stations will benefit from the new recommended rates at varying percentages depending largely on their listenership giving value for both FM stations and the clients of CBC. Based on this formula the rates for 106 stations will increase by 100%, a 50 to 100% increase for 81 stations, and a less than 50% increase for 65 stations for which listenership data is available," the Ministry said.

Industry representatives said that the previous advertisement rates were fixed on the basis of the India Readership Survey of 2012.

The Rate Structure Committee for Private FM Radio Stations was set up by the ministry last year to evaluate and recommend new rates which were last revised in 2015.

The committee submitted its recommendations after holding several rounds of meetings with industry experts and stakeholders in addition to taking inputs from bodies such as the Association of Radio Operators of India (AROI).

AROI Secretary General Uday Chawla welcomed the government's decision to increase the advertisement rates for private FM channels.

"We welcome the step and we hope to see regular increases in advertisement rates in the future," Chawla said.

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