Television

Broad categorisation of FM radio in India; Industry has seen double digit growth

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BENGALURU:  The FICCI-KPMG Media and Entertainment Report 2014 (M&E-2014 Report) says that the private FM radio industry comprises network players (national, regional and metro-focused), single stations and some niche players. A broad categorisation of the FM radio industry is Private FM radio companies and Public sector companies.

The eco-system

Prasar Bharti operates All India Radio (‘AIR’), India’s public sector radio service. AIR’s home service comprises 406 stations across the country, reaching nearly 92 per cent of the country’s area and 99.19 percent of the total population. AIR originates programming in 23 languages and 146 dialects.

At present, AIR operates 18 FM stereo radio channels, called AIR FM Rainbow, targeting the urban audiences. Four more FM radio channels called, AIR FM Gold, broadcast composite news and entertainment programmes from Delhi, Kolkata, Chennai and Mumbai. With FM popular across the country, AIR is augmenting its Medium Wave transmission with additional FM transmitters at Regional stations.

As mentioned above, private sector companies can be further classified into companies that have an all India presence; companies that have a metro focus; companies that are non-metro focused; niche radio stations.

Some of the major private FM players in each of the categories are:

Red FM with 47 radio stations in the country is the biggest FM radio player closely followed by the Reliance ADAG group’s Big FM that has 45 radio stations. The Times group affiliate Radio Mirchi with 32 radio stations and Radio City with 20 radio stations are amongst the biggest radio operators in terms of number of radio stations in the country says the report.

Oye FM with 7 metro stations, Digital Radio with three stations and Fever with four stations are among the metro focused private FM radio stations in the country.

The non-metro focused players in the country are My FM with 17 stations; Dhamal with 10 stations; CCL radio with nine; Radio Mantra with eight stations; Hello FM with seven stations; Club FM and Radio OOOLALA with four stations each.

Radio Tadka and Radio Mango with four stations each and Nine FM, Radio Indigo and Radio Choklate with two stations each are among the niche radio stations in India.

An industry that has seen double digit growth rate

The report further says the overall revenues of listed radio players exhibited double-digit growth rate over the previous year, approximately 12-14 per cent. This growth was driven equally by volume enhancements in tier II and tier III cities and increase in ad effective rates (‘ER’). The industry managed to keep the Compounded Annual Growth Rate (‘CAGR’) steady in 2013 with smaller players turning profitable during the year as their networks matured. Categories like real estate, FMCG, government, retail and media and entertainment increased their spend on radio.

The report further says that one witnessed a change of attitude towards radio - FM radio is no longer seen as an add-on medium; today, it is an integral part of a media plan and sometimes, campaigns are planned around it. The innovations in radio advertising along with growth of the industry and the positive vibe surrounding it have made sure that advertisers can no longer afford to take the industry lightly.

The report adds that revenue growth in FM radio is expected to be driven by:

Launch of stations and increase in their popularity across more tier II and tier III cities, which enables radio companies to provide advertisers with a bouquet of channels that can support brand launches across states or regions as a substitute for print or regional TV

Growth in advertising ER on radio

Expected regulatory reforms are likely to improve profitability and stimulate foreign investment.

Implementation of an accurate nationwide measurement mechanism including allowing multiple station ownership in a single city and content networking will increase returns across FM stations.

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