A.I.R.
rules the air waves - at least for now
As far as India is concerned, radio is AIR and AIR is radio. A.I.R.
which stands for All India Radio, has a network of 283 broadcasting
centres with 146 medium frequency(MW) transmitters, 50 high frequency
(SW) transmitters and 87 FM transmitters. With broadcasts in 24
languages and 146 dialects (home services), and another 10 foreign
languages in external services, A.I.R.'s coverage exceeds 90%
of India, reaching over 98% of the people in the largest democracy
of the world. Add FM radio and you have a formidable arsenal.
As of now, the Government-owned A.I.R. controls radio in India.
But the next few years are expected to change the face of radio
as a medium in India.
History
of Indian Radio
For more than 4 decades, the Government of India did not permit
private radio stations to broadcast in India. Then history changed
its course. In 1993, the Government in its wisdom, allowed private
FM operators to 'buy' blocks (chunks) on All India Radio, prepare
programming content, book commercials from advertisers and broadcast
the whole lot. Within 4 years, (1997-98), the FM Radio advertising
& sponsorship business grew to Rs 93 crores with Times of
India's Times FM & Mid-Day Group's Radio Mid-Day becoming
the main (only?) players.
History was destined to change course once again. In June 1998
the Government, through its electronic media regulatory body Prasar
Bharti, decided not to renew contracts of private FM operators.
Not surprisingly, the advertising revenue fell by 50% within a
year!
As destiny would have it, history changed course once again. This
time, the Government gave the green light to privatize radio in
India. July 6, 1999 was the historic day when the Government announced
that 150 new FM channels would be licensed across 40 cities.
And in 2000, the Government auctioned licences for private FM
channels to bolster the revenue. 'The highest bidder wins' was
the order of the day. And the focus on metros was evident in the
bidding. Expecting to collect Rs 800 million from auctioning 108
licenses, the government had to actually face mass withdrawal
of bidders because of the huge license fee. A handful of serious
bidders chose to remain.
In 2001, some of these players have started launching their channels.
Growth of Indian Radio
| In
2001, radio in the U.S.A. grew by 15% even as television
ad revenue slumped. |
History
is set to repeat itself once again. Private players will unlock
the latent potential of Indian radio, just like they did for Indian
television.
With privatization, radio is expected to follow the growth curve
of the television industry, which grew rapidly following the entry
of private players. TV ad spend grew at an annual compounded rate
of 30% for 8 years after privatization, while TV penetration more
than doubled.
In comparison, ad spend on radio is expected to grow at a higher
annual compounded rate of 45% over the next 5 years. (This compares
extremely favorably against the projected growth rate of 15% for
total ad spend. ) By 2007, ad spend on radio is expected to touch
Rs 12 million - a 12 fold increase over 2001 !
And the market share of private radio stations is expected to
increase (from 0% in 2001) to 80% within 6 years of their entry.
(Private TV players have taken 5 years to corner 50% of the TV
ad rupee.)
*Source:
HSBC report and others
* Source:
MSDW research
Future Projections
State
of Radio in India - 2002
The future is FM
FM Radio is present in 128 cities, has a footprint which covers
30% of Indian population. As per current plans, coverage will
extend to 60%.
AIR expected
to earn Rs 530 crores from the first-round auction of 101 FM stations
in 40 cities. This is a recurring income which is expected to
grow at 15% every year.
The Ministry
of Information and Broadcasting has completed the bidding process
for 101 FM channels in 40 centres for a total value of Rs. 425
crores,
The following companies have been issued licenses-
• Entertainment Network India Ltd (13 cities - Times of India
Group)
• India FM Radio Pvt Ltd (Delhi)
• Radio Today (Delhi, Mumbai and Kolkata)
• Music Broadcast Pvt Ltd
• Sun TV
• Millennium Broadcast Pvt Ltd (Delhi, Chennai and Mumbai)
• Udaya TV
• Hitz FM Radio India Pvt Ltd
• Radio Mid-Day West India Ltd (Mumbai),
• Mid-Day Radio North (India) Ltd
• Mid-day Broadcasting South (India) Ltd.
• Vertex Broadcasting (Dabur Group)
| Private
FM Radio Players in India |
(Move mouse
over the map to view the radio stations)
Launched |
*
Likely to surrender |
Wherever
there is 'license raj', there are speculative bidders. FM Radio
bidding has had its share of speculative bidding. This is evident
from the number of defaulters who have not paid their commitment
monies. (The government has collected nearly Rs 180 million from
these defaulters.) Here is a list of companies have defaulted
-
• New Media Broadcasting
• Observer Network
• Nimbus Communications
• Bollywood Broadcasting
• Dhun Radio
• Dream Radio
• Hind Broadcasting
• Indigo Radio
• Kismat Radio
• Magic Radio
• Modi Entertainment Network
• Neffs India.
And finally,
the following Radio Stations were launched in 2001
A) Entertainment
Network (India) Ltd. (Times Radio)
1) Radio Mirchi - Ahemedabad (20th Dec, 2001)
2) Radio Mirchi - Indore (4th Oct, 2001)
3) Radio Mirchi - Pune (End of Feb 02 )
B) Music Broadcast Pvt Ltd. (Star Radio)
1) Radio City - Lucknow (July 2001)
2) Radio City - Bangalore (June 2001)
C) All India Radio FM 2
1) AIR FM 2 - Mumbai (Sept 2001)
2) AIR FM 2 - Kolkata (Sept 2001)
3) AIR FM 2 - Chennai (Sept 2001)
4) AIR FM 2 - Delhi (Sept 2001)
