FM stations to pay 2% of advertising revenue as royalty

Putting an end to prolonged wrangling between the FM radio stations and music companies over royalty issue, the Copyright Board has ruled that FM stations have to pay a flat two per cent of their advertising revenue as royalty to music companies.

Two per cent of net advertisement earnings accruing from radio business only for that radio station would be given as royalty to the music providers, the board ruled on Wednesday.

The order would apply to all big and small FM radio stations across the country, sources in the board said.

While the new rule would be a boon for major FM radio stations some of whom were paying higher royalty, smaller radio stations, who survived without paying any royalty, will have to shell money now.

 

The order is intended to provide a level playing field to all players in this business, sources said.

FM stations who source music from various music companies were ending up paying anywhere between Rs 50 crore per year on royalties as music companies demanded a fixed amount from each radio station.

Radio stations and music companies had been at loggerheads over the issue of royalty ever since FM stations came into the scene. Music companies also contended that they were losing revenues as small FM players were evading paying any royalty.