Apart from the advertisement market, private-sector radios also rely on sponsored programs and occasionally receive donor money to produce specific thematic programs.
Commercial FMs
Sustainability has been an issue in debate for commercial FMs (Frequency Modulation) since the early days of independent radio in Nepal. For instance, we can look at the case of FMs in Pokhara. In early 2001, four commercial FM radio stations came into operation within a two-month period in Pokhara. In May 2001, many Pokhara residents, including some promoters of FM radios, told researchers that four stations could not survive in the city. They thought two would or at most three.
Pokhara’s economy, they thought, could not support four FM radio stations. The city does not have a large industrial base. Its tourism industry was not in great shape then, or geared toward serving local clients. Remittances from long-distance laborers constituted nearly a quarter of the city’s income, but most of it was being invested in private real estate after the families took care of their more immediate needs. The growth in the service industry in the late 1990s, mainly in the form of higher-level educational institutions, 10+2 schools and computer institutes, had provided advertisements to Pokhara’s newspapers.
But if this advertisement had to be shared among the newspapers and the radio stations, those who talked to media researchers in 2001 feared that there would be serious undercutting of advertisement rates. Undercutting has happened, but none of the four FMs has gone bankrupt, either. In fact, those four FMs have been joined in the intervening years by several other local FMs, and two that relay programs from their respective Kathmandu-based stations. Does this mean that all four of the early FMs in Pokhara and the new ones are making money?
Not at all. Industry insiders say that most of the commercial radios, including those in Pokhara, are running in losses. The growth in the independent radio sector since 1997 coincided with the political and economic crises generated by the intensification of the Maoist insurgency. Until about the year 2000, the insurgency had not significantly impacted the national industries and tourism. However, from then on, tourist arrivals began to drop sharply, industries began to feel the heat due to Maoist extortions, and intermittent disruptions hit the workplace, and development projects slowed down under threats from workers. Due to this downturn in the economy, commercial FM stations experienced undercutting in their advertisement rates and long delays in payments from their clients.
However, apart from two or three stations that went out of air temporarily or shut down for pure managerial reasons, no commercial FM has gone out of business citing their continuing losses.
How is this possible? Many of the companies that have invested in the radio sector know that they will not be earning profits in the short run. Hence the fact that they are running in a loss in the initial years of their existence would not be news to them. But there is also something else at work here.
Industry insiders have, over the years, told researchers that the promoters of some of the radios that are running in a loss can sustain some monetary loss each year because their logic of operation exceeds the simple accounting notion of the bottom line. Such loss is often seen to be an investment in social prestige or other cultural capital obtained from running an important local media institution. Such loss can also be recovered in monetary terms from other business ventures in the portfolio of those promoting the concerned radio stations.
We can conclude that sustainability in the commercial radio industry then has a social logic beyond the accountant’s income and expenditure balance and calls for an investigation that looks into how radio is embedded within a social economy that is larger than the market economy. And radio is not an exception in this matter. Big money-losing ventures in the world of print media in Nepal, including broadsheet dailies, continue to be published years after media analysts predicted their death.
Community Radios
Radios dubbed as community radios have received the support of international donors in setting up their stations and in producing various types of development-oriented, rights-based, and educational programs. Once these stations come on air, they too have made income by broadcasting advertisements. Some of the community radio stations have adopted a selective policy regarding the playing of advertisements. They have chosen to not broadcast some advertisements that are broadcast over commercial stations by claiming that they are exercising their social responsibility in doing so. However, their overall income stream does not look all that different from those of commercial operators even as the percentages of income these two different types of radios derive from airing advertisements are not the same.
Some community radio stations have voluntary producers and other members of the staff work in a semi-voluntary basis by taking a low pay. Other stations have received free labor or contributions of cash and kind from their listeners to set up buildings for their radio stations. Still others have collected money from those described as “friends of such-and-such radio” to establish some kind of a corpus fund. However, such efforts have been executed in a half-hearted and haphazard manner. There is, as yet, no systematic attempt to realize these ideas in a robust way, and resources obtained from such efforts, apart from the labor of voluntary radio producers, have not contributed in a significant manner to keep these stations going.
Many radio promoters who have set up community radios have talked about various plans to make their ventures financially solvent without having to rely on advertisement money and foreign donors. Many such individuals have said that the central government is the key player in this issue. According to them, the government cannot only drastically reduce the license and renewal fees but also give discounts in the phone and electricity bills that community radios pay each month. These radio activists have argued that the exorbitant fees, along with the requirement to pay royalties on their annual turnover, are the biggest hurdle in the path toward sustainability of community radios. This has also been the view promoted by the Association of Community Radio Broadcasters Nepal (ACORAB).
Other promoters feel that sustaining community radios would have been easy had there been elected governments at the local level. As one such promoter said in a discussion held at Martin Chautari (MC) almost two years ago, “Community radios could do programs highlighting the works going on in the village development committees (VDCs) in their broadcast areas. They could even do programs covering the various wards of the VDCs in rotation and be paid NRs 25,000-30,000 per ward. However, since there are no elected representatives, there is no incentive for the wards to work with radios in this manner.” Such individuals are also of the view that if there were elected governments at the district development committee (DDC) level, radios could ask for a small percentage of the millions of Rupees that each DDC mobilizes for development annually for “awareness raising.”
Some community radio activists feel that community radios in Nepal need to learn from the experiences of other countries such as Switzerland and Indonesia in being able to mobilize larger numbers of volunteers to run their radios. However, why those countries have been able to mobilize volunteers in large numbers to run their radios and why this has not happened in Nepal needs to be investigated. Some others have argued that if community radios immerse themselves in cultivating social credibility and in increasing participation of the members of the communities they serve, sustainability of community radios should not be a problem in the long run. But how this wisdom ought to be translated into a business model has proved to be elusive.
Community radios have also benefited from the programming – and sometimes financial as well – support of production houses that have produced programs on various themes with donor support. Among those houses doing this work (and building their own networks of radios, both commercial and community ones), the two based in Kathmandu are Antenna Foundation, and Equal Access. These are NGOs, whereas another Kathmandu-based organization, Communication Corner, is a private limited company that also started operating its own FM station, Ujyalo FM, from 2007. This kind of initiative has the potential to share production resources of radio stations located in various parts of Nepal, a subject that has been analyzed in detail by my MC colleagues Devraj Humagain, Komal Bhatta, and Harshaman Maharjan in their book “Radio Network” (2008).
The sustainability of independent radios has become an even more pressing issue since the Nepal Government distributed licenses to more than 250 radio stations in the last three and half years. As the number of independent radios in operation increases in the country, we need a public debate on how to sustain them. Those with experience and knowledge ought to speak up!
Onta has co-edited five books on the history of radio in Nepal, including Ten Years of Independent Radio: Development, Debates and the Public Interest published by MC in 2008
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