Feature

Tune in, tune out

As Radio Struggles For Growth, Smaller Players Sell Out While Biggies Consolidate

"Video killed the radio star,” sang The Buggles way back in 1979, when radio hadn’t even taken off in India. All we had then was All India Radio, a government monopoly. Not many of us will be familiar with the AIR theme song today, but it was omnipresent — you’d hear it everywhere, in people’s homes and portable transistors.

Fast forward to today — this medium has been dwarfed by print, television and in the more recent past, digital as well — just what The Buggles was crooning about. Ironically, radio touches the lives of more people in the most economical way. For no more than a few hundreds, a person can buy a radio set and instantly listen to the latest Bollywood hits and remixes, or even playlists from the golden days of Indian music. If you tune into AIR, you can also listen to the news or cricket commentary.

While FM radio came into its own in the early ’90s, when the government sold airtime in a few cities to private players, the real turning point came when the government opened up 108 frequencies for private players in 2000. Today, there are 386 radio stations operated by nearly 30 private players.

It’s not been an easy journey. The players got frequencies, but face certain restrictions. For one, they aren’t allowed to broadcast news, which means content is largely around music. The luxury of delivering news is only AIR’s domain. Another major hurdle for the private players is exorbitant licence fees (See: Towering bids). It can cost over a billion rupees in major cities such as Mumbai and Delhi and this amount can only be recouped through advertising. In contrast, satellite television has been breathing easy for a few years now, since the industry follows a subscription model, reducing the dependence on advertising. Then, the license is only valid for 15 years, whereas for satellite television, it is for perpetuity.

Despite the high upfront costs to set up a station, the radio industry just gets 4-5% of the total advertising spend of Rs.600 billion. Print and television account for 32% and 38%, respectively. Radio has been left behind by the newest form of media as well — digital, that enjoys 19% share.

Evidently,

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