Indian radio cab market 2012 challenges and growth opportunities
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HISTORY OF RADIO
Radio owes its development to two other inventions, the telegraph and the telephone; all three
technologies are closely related. Radio technology began as "wireless telegraphy".
Radio can refer to either the electronic appliance that we listen with or the content listened to.
However, it all started with the discovery of "radio waves" - electromagnetic waves that have the
capacity to transmit music, speech, pictures and other data invisibly through the air. Many
devices work by using electromagnetic waves including: radio, microwaves, cordless phones,
remote controlled toys, television broadcasts, and more.
The Roots of Radio
During the 1860s, Scottish physicist, James Clerk Maxwell2 predicted the existence of radio
waves; and in 1886, German physicist, Heinrich Rudolph Hertz demonstrated that rapid
variations of electric current could be projected into space in the form of radio waves similar to
those of light and heat.
In 1866, Mahlon Loomis, an American dentist, successfully demonstrated "wireless telegraphy."
Loomis was able to make a meter connected to one kite cause another one to move, marking the
first known instance of wireless aerial communication. Twenty years after the telephone was
invented and music was first sent down a telephone line, Guglielmo Marconi sent radio signals.
Marconi (1874-1937) was born in Italy and studied at the University of Bologna. He was
fascinated by Heinrich Hertz’s earlier discovery of radio waves and realized that it can be used
for sending and receiving telegraph messages, referring to it as “wireless telegraphs.”
Marconi’s first radio transmissions, in 1896, were coded signals that were transmitted only about
1.6 km (a mile) far. Marconi realized that it held huge potential. He offered the invention to the
Italian government but they turned it down.
Marconi was not the first to invent the radio, however. Four years before Marconi started
experimenting with wireless telegraph, Nikola Tesla, a Serb who moved to the USA in 1884,
invented the theoretical model for radio. Tesla tried unsuccessful to obtain a court injunction
against Marconi in 1915. In 1943 the US Supreme Court reviewed the
decision. Tesla became acknowledged as the inventor of the radio –
even though he did not build a working radio.
Indian scientist J.C. Bose demonstrated the radio transmission in 1896
in Calcutta in front of the British Governor General. The transmission
was over a distance of three miles from the Presidency College and Science College in Calcutta.
The instruments (‘Mercury Coherer with a telephone detector’) are still there in the science
museum of the Calcutta University. Thus writes contributor Dipak Basu, referencing the
Proceedings of the IEEE, January, 1998.
Bose had solved the problem of the Hertz not being able to penetrate walls, mountains or water.
Marconi was present in the meeting of the Royal Society and it is thought that he stole the
notebook of Bose that included the drawing of the ‘Mercury Coherer with a telephone detector’.
Marconi’s Coherer, which he used in 1901, was the exact copy of that of Bose. Bose did not
apply for a patent on his design because he believed in the free flow of inventions in science. But
under pressure from American friends, he applied for the patent in September 1901. He was
awarded the US patent for the invention of the radio in 1904. By that time Marconi had received
his patent and international recognition.
It is reputed that Nathan B. Stubblefield, a farmer from Murray, Kentucky, made a voice
transmission four years before Marconi transmitted radio signals.
Stubblefield demonstrated his invention to the press in 1902 but, being afraid that his invention
will be stolen, never marketed his wireless radio. When he was found dead in 1929, his radio
equipment was gone. Nikoli Tesla remains to be acknowledged as the inventor of the radio.
The story of FM radio is one of success and tragedy.
Edwin Howard Armstrong was one of great engineers of the 20th century; he was born in 1890,
in New York City, and died in 1954, also in New York City. Edwin Armstrong was only eleven
when Marconi made the first trans-Atlantic radio transmission. Enthralled, the young Armstrong
began studying radio and building homemade wireless equipment, including a 125 foot antenna
in his parent's backyard.
However, Edwin Armstrong should be known for inventing three key innovations: regeneration,
super heterodyning, and frequency modulation.
Radio Broadcasting-
This period marked the start of "regular" broadcasting; after the government removed restrictions
late in 1919. The Radio Corporation of America4 was formed in 1919 as a patent pool to control
the use of the new equipment which had been invented during WWI, but which was not able to
be used unless all the conflicting patent owners would permit. The make-up of RCA consisted of
those companies that had the key patents or would shortly buy them for wireless telegraphy.
1923 – 1926: This was a transitional period; it saw the beginnings of broadcasting on a
commercial basis; it marked the development of new types of equipment; it saw development of
basic types of programs. Chiefly, it was a period in which some persons at least saw in
broadcasting possible source of revenues-from sale of time, rather than the sale of receiving sets.
1926 – 1930: Commercial radio became solidly established- particularly development of
networks and the presentation of network programs by national advertisers.
1930s: This was the beginning of the great depression in the United States – a depression which
had its effect on programming and on the various forms of advertising, but relatively little effect
on broadcast revenues. The 1930-35 period was also the time of the greatest "idea" development
in the history of American radio programming-with respect to network programs in particular.
Broadcasting in 1935 to 1941 saw radio revenues soaring to new heights; and while not too many
new program forms introduced, older forms were polished and improved.
1940s: This period included World War II. The nation had shifted, in December of 1941, from a
threat-of-war situation into actual involvement. The war imposed as many hardships on
broadcasters as it did upon those engaged in other occupations; electronic concerns were shifted
to war production, with the result that broadcasting equipment, tubes, etc. was in short supply;
costs advanced; employees were drafted into military service. On the other hand, both network
and station revenues were strikingly greater than in the prewar period; in 1944-45, no less than
70% above the level of revenues in 1940-41. Some of this increase was the result of inflation, but
even so, 1941 to 1945 was the big money-making time for American radio.
1945-1952: A highly important era in the history of American radio and television. It saw an
enormous increase in the total number of radio stations, the erection of 108 TV stations-and the
beginnings, at least, of a shift in importance from radio to television, especially on the network
level. The transistor was demonstrated in 1947 by Bell Labs.
Broadcasting from 1952 through the 1960's: Earlier trends continued, but during this decade
television became the dominant mass medium as the freeze on licenses was lifted and a 70-
channel UHF band was added. The networks reached from coast-to-coast and in 1953 the FCC
approved the industry indorsed compatible NTSC color television system (RCA-NBC), reversing
their 1950 decision which had authorized a non-compatible field-sequential system (CBS). Radio
became less secure, but grew in the number of smaller stations licensed.
1960-1970 - radio reinvents: Probably based on the early work of programmers like
McClendon and Bill Drake, hundreds of AM stations embrace a "top-40 time and temperature"
format. The saying, "be bright, be brief" was, it seemed, posted in every control room. Stations
played three minute songs. The music was still controlled by cynical old white men. There were
lots of jingles and promotions. Programming, music and contests are now targeted to a specific
age group (12-35) based on demographic research showing this group has money to spend on
goods and services by the new affluent middle class.
FM makes a comeback: For a system that was invented nearly 40 years earlier, it took a long
time for FM to overtake AM. Pop music was better and it demanded a delivery service that
sounded as good as a home audio system. AM stations still refused to play the new music from
albums and were suddenly facing new competition from FM stations that would play the music.
1970-1980 - radio bores: AM Top 40 begins the decade with lock on the ratings. Even though
its sound was stale, in some markets more than 50% of the people using radio are still tuned by
habit to that "one big legendary AM station." By the middle of the decade most of these major
stations were struggling. AM stations even tried to meet the challenge by going "stereo" but no
one cared. The Big FM's would rule by the decade’s end.
Radio makes lots of money: The big music stations, once AM and now FM were making lots of
money. There are plenty of listeners and times are good as far as jobs and money. Advertisers
want to buy radio. There was even disco on FM!
Formats fragment: There are no longer just two formats, top-40 on AM and progressive rock"
on FM. Each station has only a small segment of the audience.
Radio networks return: With inexpensive satellite technology available to every station,
hundreds of new radio networks emerge and die, mostly offering music formats delivered by big
city DJ's. Smaller stations automate with them but it makes the station less local-sounding, less-
appealing to listeners and sponsors.
1980-1990 - radio struggles: The Reagan administration de-regulates the industry. Stations now
have to satisfy the demands of the marketplace instead of the demands of Federal regulation.
News and public affairs suffered. If you were a news writer, reporter and reader as every station
had to employ in the 1970's, now your station was no longer required to have news.
Buy-sell: Like the house you bought for a high price in the late 1980's, the radio station you also
bought is worth less than you paid. This means cutbacks, more automation, less news and public
affairs types. In the 1980s almost half of the radio stations changed hands.
New owners, new challenges: For young people seeking a career in radio the good news was if
you are good at sales, promotion or production of promotions, you'll work.
A smaller pie: The number of stations swelled to 12,000 and in major and large markets, there
were perhaps 100 to 200 stations vying for listeners. The era of Niche Programming and formats
begins and now there is a format for every narrow interest. Again, less people have to do more.
To succeed you have to be above average, tenacious, persistent.
AM tries a comeback: Helped with new technical regulations, promise of fewer stations and an
expanded AM band, the FCC station owners tried to save AM one more time.
1990-2000 - radio competes: Less people do more work. New radio station owners want to cut
costs, use automation to run three stations at once. No union problems because the unions in
radio are practically irrelevant.
New group owners & duopolies: One company can now own 25-25-25 plus and in San Jose
and San Francisco some companies own many stations. In this market most of each day is
automated.
Digital takes over radio technology: Now an entire day can be stored, edited and broadcast
using the hard drive of a computer. Production that used to involve splicing tape is now done
with the click of a mouse. Analog devices like cart machines will disappear by 2004, to be
replaced with computer memory.
New delivery services: Digital stuff, DBS, DMX, Internet, etc; all future non-FM delivery
services. Still, AM is around after almost 100 years. And just like the transition to television,
current owners want to be first in line when licenses are issued for these new services.
Talk radio's decade: Rush, Conservative politics, and suddenly many struggling AMs are
revived and saved again by talk radio.
HISTORY OF RADIO IN INDIA:
Broadcasting began in India with the formation of a private radio service in Madras (presently
Chennai) in 1924. In the very same year, British colonial government approved a license to a
private company, the Indian Broadcasting Company5, to inaugurate Radio stations in Bombay
and Kolkata. The company almost went bankrupt in 1930 but the colonial government took away
the two transmitters and the Department of Labor and Industries started operating them as the
Indian State Broadcasting Corporation. In 1936, this very Corporation was renamed All India
Radio (AIR) and was controlled by the Department of Communications. When India became
independent in 1947, AIR was made a separate Department under the Ministry of Information
and Broadcasting.
Government of India controls the radio broadcasting in India that works under the Directorate
General of All India Radio. It was established in 1936 and since 1957 All India Radio was
renamed as Akashvani. Akashvani is a government-owned, semi -commercial operation of the
Ministry of Information and Broadcasting. There were only six radio stations in India at the time
of independence. All India Radio`s network had expanded by the mid-1990s to around 146 AM
stations along with a National Channel, the Integrated North-East Service that aimed at reaching
out to the tribal groups in northeast India and handles the External Services. There are five
regional headquarters for All India Radio, namely in the North Zone in New Delhi; the East
Zone in Kolkata; the North-East Zone in Guwahati, Assam; the West Zone in Mumbai; and the
South Zone in Chennai.
Commercial Radio services in India started in 1967 by Vividh Bharati Service with its
headquarters at Mumbai. Vividh Bharati earned its revenues from extensive advertisements and
had been broadcasting from thirty-one AM and FM stations during the mid-1990s. India has a
wide-ranging network of medium wave and short-wave stations. In 1994 there had been almost
eighty-five FM stations and seventy-three short wave stations that connected the entire country.
The broadcasting equipment used in India is mainly indigenous and reaches special audiences,
such as farmers needing agro climatic, plant protection, and other agriculture-related
information. The number of radio receivers increased almost five times between 1970 and 1994.
Initially it was around 14 million that rose to nearly 65 million. Most radios are also produced
within India.
The early history of Indian radio broadcasting in independent India set the parameters for the
succeeding role of television in the nation. In those days radio was considered as an integral
medium of communication, primarily due to the absence of any motion medium. All the national
affairs and social changes were informed through the waves of broadcast media and within no
time, popularity of radio spread nationwide. Indian radio proved to be a prime medium of social
integration.
Indian radio also took up the task of aiding in the development of economic scenario. The role of
broadcasting provided an inlet for the flow of modern ideas.
It was due to the same reason of static thoughts prevailing in the society; that television came
into existence in 1959. Television broadcasts started from Delhi in September 1959, again
associated with the All India Radio`s services. Programs were broadcast twice a week for an
hour a day on welfare topics related to community health, citizens duties and rights, and traffic
and road sense. In 1961 the television medium were expanded to include a school educational
television project, however the importance of radio did not decline.
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 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 and sponsorship business grew to Rs. 93 crores with Times of India's Times
FM & Mid-Day Group's Radio Mid-Day becoming the main players.
Then, 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! 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 licenses for
private FM channels to bolster the revenue. 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 response to the Government's offer, many companies bid for the licenses to operate in key
markets. But the going was not so easy. Many gave up, unable to shell out the high license fee.
For instance, the bidding price for the Mumbai license was reportedly to the tune of Rs 9.75
crore. Others dropped out saying the business was not viable. So, in effect, the competition
shrank, players consolidated and the Government extended its deadline. Today, there are roughly
10 players who will operate approximately in 37 cities across the country.
The government collected close to Rs 4.6 billion as license fee for the privately run FM radio
channels in 40 cities. New Media Broadcasting, a Zee Group company, which focused mainly on
the smaller towns, won the largest number of bids.
The first round of bidding - for 76 channels in 26 cities, garnered close to Rs 3.5 billion. The
government got the highest bids - Rs 97.5 million from each of 10 broadcast companies - for
stations in Mumbai. Interestingly, the bids for Hyderabad and Nagpur came next, each for Rs
77.2 million and Rs 74 million, respectively, while the bids for Delhi were Rs 71.2 million each
Radio is expected to follow the growth of the Television industry, which grew rapidly following
the entry of private player. Currently, FM coverage in India is restricted to just 17% of the
country, compared to 89% of All India Radio (AIR). Incidentally, Music Broadcasting became
the first firm in India to commence private FM broadcast from Bangalore in July.
FUTURE OF RADIO INDUSTRY
FM Radio can play its part in building a stronger business future for India. Providing free-to-air
local broadcasts of music and entertainment, helpful information - traffic advisories, community
announcements and public service messages provide a real value-added service. But at current
levels of advertising support, each radio station is reeling under the brutal financial impact of
high costs. With more players in the fray the FM radio industry would grow and also enhance the
government’s yield from licensing radio naturally.
The new India deserves an active private FM radio sector. It can provide a level playing field
with benefits for listeners, for advertisers, employment & career options. Spearhead the
government objective of growing the FM radio business in India.
With the government ready to reduce the license fees it will help in attracting new players like
reliance which had earlier backed out only due to the entry fees. Also government allowing
foreign players to enter the Indian market it will help the industry grow. Virgin group has already
started exploring the Indian market for suitable partners. Various radio stations are coming up
with IPO for example Radio Mirchi thus helping them expand.
The future looks bright as the reach of radio is expected to raise post the increase in the number
and quality of players in the industry. It is on the basis of these key drivers of growth, it is being
predicted that radio's share in the total advertising pie will see an increase in the medium term.
There are an estimated 150 million radio sets across the country. The Rs 1.6 billion industry is
reported to be growing by 31 per cent every year and should touch the Rs 6.2 billion by 2007,
with revenue rising at 23 per cent annually. Also, though radio has only a 2 per cent share in the
Rs 6,000 crore Indian advertising markets, advertising spending is expected to amount to Rs 500
crore this year.
FM RADIO INDUSTRY: RISK FACTORS
Economic downturn10
The FM radio industry derives almost all its revenues from advertisement. The radio stations are
free to air and do not garner any subscription revenues, thus making them totally dependent on
advertisement revenues. Advertising is a discretionary expenditure and is the first one to be
pruned in case of an economic slowdown. Thus, the major marketers advertising on radio may
cut their ad budgets in case of an economic downturn. This would adversely affect the radio
industry.
Little differentiation between different FM radio stations
The content played on different FM radio stations is very similar in nature. Most of them play
popular film and pop music and very few cater to the niche audience such as English rock music
lovers or Indian classical music lovers. This is happening because one player is allowed to own
only one station in every city. Thus the FM radio operators are not willing to take a risk by not
catering to the mass segment. This is hurting the growth of the FM radio industry as people who
prefer niche music genres are not tuning into FM radio. Besides this, people frequently switch
between stations leading to listenership fragmentation.
Competition from satellite radio
Many of the restrictions that apply to FM radio broadcasters do not apply to satellite radio
broadcasters. At present, multiple channel ownership by a FM broadcaster in the same city is not
permitted; however, the current satellite broadcaster in India is offering multiple channels. FM
broadcasters cannot broadcast news and current affairs 24 hrs a day whereas satellite
broadcasters can do so through a dedicated station. FM radio is limited to a small range around
the transmission site while the satellite signals cover the entire country. Satellite radio
broadcasters do not have to pay any license fee whereas FM radio broadcasters have to pay 4%
of their gross revenues as license fees. This favorable treatment meted out to satellite
broadcasters may adversely affect the growth of the FM radio industry. However, the satellite
radio broadcaster WorldSpace operating in India has not been able to meet with much success. In
fact, in India, WorldSpace lost 8,713 net subscribers during 3QFY07, ending the period with
164,902 subscribers. Besides this, satellite radio has high subscription charges whereas FM radio
is free to air.
High music royalties
FM radio broadcasters have to pay high royalties to the music companies for the music content
procured from them. However the broadcasters can enter into a voluntary agreement with
Phonographic Performance Limited and The Indian Performance Right Society Limited at high
rates or under the rates determined by the courts of law to minimize their expenses.
Threat from digital technologies
Digital broadcasting technologies like Satellite/Digital Audio Broadcast (DAB) using the FM
band and Digital Radio Mondial (DRM) using the AM band are becoming popular worldwide.
There is efficient utilization of spectrum in case of digital broadcasting, enabling the broadcast of
multiple radio stations. The quality of digital broadcast is better than analog transmission.
However, digital receivers are more expensive than analog receivers. In Western Europe, a few
countries are looking at a total switch off of analog broadcasting (FM/AM) by 2020 or so.
Norway is the only country that has formally announced a cutoff date. But with analog TV likely
to be switched off in India in the next 5-7 years, radio’s turn could come in the next 10-15 years.
Intense competition
There is intense competition between the FM radio operators operating in the same city. All of
them are clamoring for the same advertisers, listeners and need to procure similar content. The
number of FM radio stations has increased dramatically leading to a proportionate increase in the
demand for trained personnel. Due to this attrition and poaching have become wide spread.
Thus, there are many risks that could derail the growth of the FM radio industry. We feel that the
major risks are a potential slowdown in the economy, little differentiation between the FM radio
stations and intense competition.
Radio industry: Growth drivers
Fastest growing segment of the media and entertainment industry
The radio industry recorded a growth of nearly 58% in 2006. The share of radio in the total
advertising industry increased from 2.4% to 3.1% during the same year. This is further expected
to increase to 5.5% by 2011 as per the FICCI-PwC report on the Indian entertainment and media
industry. The size of the radio industry is projected to increase at a CAGR of 28% from Rs 5 bn
in 2006 to Rs 17 bn by 2011.
Robust growth of the Indian economy
The Indian economy has grown at a robust rate of 9% and 9.2% in FY06 and FY07 respectively.
The advertisement industry is a proxy to India’s high economic growth. It grows at a faster rate
in such buoyant times. As per a study conducted by ZenithOptimedia, the media planning and
buying arm of advertising group Publicis, the advertising spend is expected to increase to Rs 367
bn by 2010 from Rs 227 bn in 2007.
Beneficiary of the buoyant growth of major advertisers
The major advertisers on radio are the entertainment channels, real estate firms and retailers. All
these industries are expected to witness robust growth in the years to come. More than 90
channels across various languages and genres are being launched this year. The real estate
industry is projected to grow at a CAGR of 25% in the next five years. Organized retail industry
is projected to grow at a CAGR of 40% in the next five years. Radio industry should be a major
beneficiary of the high growth in these sectors.
Demographics
The target listeners for the radio industry are the youth. 55% of the India population is below 25
years leading to an increase in the audience of the radio industry. The content on radio primarily
comprises of film music. The Indian film industry is getting more organized and receiving more
institutional funding. The quality of music produced is improving which augurs well for the
growth of the radio industry.
Reduction in license fees
The Phase I policy for the privatization of FM radio had a very high fixed license fee structure
with an annual escalation of 15%. In the phase II policy, a revenue sharing formula was
introduced whereby radio companies had to pay a fixed annual license fee of 4% of gross
revenues or 10% of the reserve OTEF (One Time Entry Fee) whichever is higher. The reserve
OTEF was 25% of the highest valid bid for that city.
Availability of listenership data
Leading TV viewership research company, TAM, has recently ventured into radio audience
measurement through a study called RAM (Radio Audience Measurement). The study is
currently restricted to the cities of Delhi, Mumbai and Bangalore. Research may cover larger
number of cities in the years to come. Availability of listenership reports is bound to support and
attract larger spends from marketers. Marketers generally wait for adequate research data to
emerge before committing large spends to any medium.
Local advertising
Globally, the local retail segment constitutes a large part of radio's advertising income. As per
the CII-KPMG report, while local advertising contributes 70% of radio revenues in the United
States of America, in India, the share of local advertising is only about 8% of radio revenues.
Ideally, a localized medium like radio can be effectively used for local-level promotions apart
from being bundled as part of cross-media promotion strategies. Thus there is huge potential for
the radio industry to benefit from an expected increase in the share of local advertisements.
Phase III policy
It is expected that after the completion of Phase II Policy, the Government will open up as many
as 700 channels in the Phase III as per some media reports. This phase will witness licenses
being awarded in smaller towns. This could result in radio getting a larger share of the
advertising spends.
Though the radio industry has many growth drivers, there are various risk factors also that could
derail the growth of the radio industry. In the next article, we shall outline the risks to the growth
of the radio industry.
Radio as an Advertising medium:
Radio advertising is one of the earliest and most popular forms of advertising in today's world of
mass media. Although television has shifted much of the audience away from radio it is
undisputable that radio is always there. Radio is broadcasted everywhere twenty-four hours a day
and always has the breaking news. Walter Cronkite11, a famous broadcast journalist, started his
career in radio and concluded, "Radio has its own special strengths and contributions. While TV
pulls the big audience, it's still radio that's there virtually every place, all day, all night. It's radio
that's there when disaster strikes. Radio is that medium of the single sense and frees the
imagination."
Nearly 98 percent of people listen to the radio primarily for news, talk, entertainment, and sports.
Unlike many other mass mediums radio is much more personal and friendly which attracts large
audiences. Radio audiences have concluded that they listen to the radio, much like television,
because they are either bored or lonely. Although radio did take a severe hit when the television
was introduced into average households they still managed to make a comeback. Radio reaches
77 percent of consumers, and 80 percent of the younger audiences daily, which is remarkably
comparing with the competition. Radio is now the third largest mass advertising media trailing
newspapers and of course television.
Radio advertising became increasingly difficult with the dawn of the television era which
prompted the need for new ideas to reach the audience. Instead of working against television
which was virtually impossible radio companies began working with them. In the early to mid
90s Fox was having trouble obtaining the younger audience that they wanted so they looked to
the radio. During this time the younger audience was one of the radio's highest audience
percentages.
Advantage of radio: The most important advantage radio offers is its ability to reach specific
audiences through specialized programming. In addition, radio can be adapted for different parts
of the country and can reach people at different times of the day. For example, radio is the ideal
means of reaching people driving to and from work.
Known as drive time, these radio time slots provides the best audience for many advertisers.
Pizza hut12, for instance, reached out to its target audience of women making dinner choices by
using radio during 4 to 5 pm time slot.
Radio offers advertisers flexibility. Of all media, radio has the shortest closing period. Copy can
be submitted up to airtime. This flexibility allows advertisers to adjust to local market conditions,
current news events, and even weather. For example, a local hardware store can quickly
implement a snow shovel promotion the morning after a snowstorm. Radio's flexibility is also
evident in its willingness to participate in promotional tie-ins such as store openings races, and so
on.
Radio may be the least expensive of all media. And because airtime costs are low, extensive
repetition is possible. In addition, the costs of producing a radio commercial can be low,
particularly if local station announcers read the message. Radio's low cost and high reach of
selected target groups make it an excellent supporting medium. In fact, the most appropriate role
for most radio advertising in a supportive one.
Advantages:
A universal medium. Can be enjoyed at home, at work, and while driving. Most people
listen to the radio at one time or another during the day.
Permits you to target your advertising dollars to the market most likely to respond to your
offer.
Permits you to create a personality for your business using only sounds and voices.
Free creative help is usually available.
Rates can generally be negotiated.
Least inflated medium. During the past ten years, radio rates have gone up less than other
media.
Disadvantages:
Because radio listeners are spread over many stations, to totally saturate your market you
have to advertise simultaneously on many stations.
Listeners cannot refer back to your ads to go over important points.
Ads are an interruption to the entertainment. Because of this, radio ads must be repeated
to break through the listener's "tune out" factor.
Radio is a background medium. Most listeners are doing something else while listening,
which means your ad has to work hard to be listened to and understood.
Advertising costs are based on ratings which are approximations based on diaries kept in
a relatively small fraction of a region's homes.
Not as fast as using a phone; could take a little bit
The line could get fuzzy, or not clear
Basically in any educational communication, for making it more persuasive and effective visual
aids are very important. In the case of radio, if an educational program is broadcast then the
people who do not have good listening skills cannot understand it. There are a lot of people who
want visual aids like whiteboards, multimedia presentations or hard copies to better understand
the discussion. Lack of visual aids is the major disadvantage of radio in educational
communication. Moreover, body language also plays a very significant role in understanding the
point of view of the other person and it is not viewable in radio communication.
Another thing which is very important in educational communication is to get feedback and
analyze the interest of audience which is also not possible in radio. Therefore, radio is having a
lot of disadvantages for any educational communication.
Strategic Roles of Radio
As Commercial Radio developed in the early days, its key strengths were seen as primarily
tactical - fast turnaround, low capital cost and local flexibility. These days however, while the
traditional strengths still apply, radio is increasingly being used for strategic roles.
Dominant share of mind
Share of mind can be described as the extent to which a brand makes itself salient within the
consumer's mind - this is often the most challenging task in sectors where there are several top-
parity brands, and/or high levels of competitive activity.
The ability of radio to create dominant share of mind is a product of its intrusiveness and the
high frequency with which ads are broadcast.
Brands like the Carphone Warehouse13 have used this unique characteristic of radio to develop
an unassailable lead within their category.
Support to other media
Young people are of course consumers of several media, and campaigns which use only one
medium can miss out on the "media multiplier effect". Because of its inherent characteristics,
radio can work in a complementary way to other media.
With TV it is traditionally used to add to the length of a campaign or to fill weeks where there is
no TV activity - it can also be used to explain products or services in more depth, or to include
additional information. Brands in fast-changing areas like retail or financial services often use
radio for its ability to put over several different messages as an overlay to a core TV campaign
(multiple executions in radio are very inexpensive compared to TV).
Radio also works exceptionally well with TV if there is creative synergy, most conspicuously in
the form of a Sonic Brand Trigger.
To press, radio above all adds intrusiveness, because levels of ad avoidance with print are so
high. Radio can also, like TV, bring things to life - for services or corporate advertising this can
be very valuable in adding personality and tone of voice.
Young people, because of their inexperience, often need the benefits of products or services
explained to them before they can make a decision to purchase - for example, a bank account, or
a promotional offer.
Radio is particularly useful for this as it uses the human voice in real-time. This means that the
young people do not have to wade their way through extensive reading material before they even
know what the proposition is.
Speaking from inside youth culture
As the qualitative research illustrates, young people begin to move away from their parents'
world of choices and preferences, and to set up their own world independently. Inevitably this
means that some media are seen as outside that independent world - newspapers for example.
Radio, as a personal "me-medium", allows the advertiser to speak from inside the so-called
"youth fortress"
As the respondents said in the research, they feel as though the people on the radio treat them
like adults - leaving their parents out of the equation. Tone of voice is a key issue with
advertising strategies in this territory.
Radio Advertising
The evidence from the qualitative research is that young people feel their local FM station is
aimed at people like them, but the advertising is not - they feel, probably quite correctly, that
most advertising is aimed at adults.
However, because radio is a real-time intrusive medium, they have to sit through the full length
of any ads which are for irrelevant products.
There was evidence of three sorts of advertising memories:
Relevant: Ads which mentioned areas or names of specific interest, e.g. films, outlets selling
favored brands, concerts
Vague/ not relevant: Memories of ads for local garages, cars and insurance companies - little or
no specific detail remembered
Sonic Brand Triggers: Much evidence of children's ability to pick up on musical SBTs and sing
them out loud
Consideration
It seems clear from this analysis that children are very selective in their attention, and are
strongly influenced by relevance of the brand or product advertised.
It would follow that, since they expect most ads to be irrelevant to them, care must be taken in
the creative work to overcome this expectation - through linking to the relevant topic,
involvement, surprise, tone of voice etc.
Tone of voice is a key area with radio: young people can tell when they are being addressed as
equals, and when they are not.
Young people pick up very strongly on musical Sonic Brand Triggers, even for seemingly
irrelevant brands.
RADIO STATIONS ACROSS BANGALORE:
Red FM: Red FM is an Indian FM14 radio brand, with
stations broadcasting at 93.5 megahertz in the cities of
Mumbai, Delhi, Kolkata and Pune in addition to Bhopal,
Gwalior, Jabalpur, Indore, Nashik, Aurangabad, Nagpur,
Bangalore, Mysore, Mangalore, Gulbarga, Kochi, Trivandrum, Trissur, Kannur, Kozhikode,
Hyderabad, Vijayawada, Vizag, Warangal, Rajahmundry, Tirupathi, Ahmedabad, Rajkot,
Vadodara, Lucknow, Kanpur, Allahabad, Varanasi, Jaipur, Bhubaneswar, Asansol, Siliguri,
Gangtok, Guwahati, Jamshedpur, Shillong and Aizwal. It was launched in 2002, playing a mix of
Hindi and English songs. However, the programming is now 100% exclusively Hindi.
The channel is owned by Kalanidhi Maran, with a 48.9% stake, as well as minority holdings of
Hyderabad-based IT company Value Labs, NDTV, Astro. It was acquired from India Today
promoter Living Media in January 2006. Their punchline is 'Baja ate Raho' (Keep Playing). The
most widely broadcast shows include "Morning No.1", "Dilse", "Mumbai Local", "One Two ka
Four", "Mera Wala Gana", "Superhits Music Show", "RDX", "Indore Beats" and "Nomoshkar
Kolkata". In one of the recent developments at Super Hits Red FM 93.5 Virag Mishra joined the
team as a National Creative Head. Virag the recipient of the esteemed Stardust Award for
standout performance as a lyricist is from advertising background. Starting August 14, 2009, S
FM or Suryan FM was re-branded into RED FM across 38 cities in INDIA. S FM took over Red
FM in August, 2009 and re-branded all its stations to Red FM except for the ones in Tamil Nadu.
Radio Indigo: Radio Indigo 91.9FM15 - The color of music, Soul
of Bangalore is the country's first and only international hit
station. This is a Jupiter Capital venture. Radio Indigo is the only
radio station in the country that plays contemporary international
music. Playing all the hits all the time, Radio Indigo caters to Bangalore and Goa's long-standing
tradition and a vibrant community of music aficionados. The station plays a vibrant array of
genres like pop, classic rock, hip-hop, jazz, world music and much more.
Having headquarters in Bengaluru, Radio Indigo 91.9 has now emerged as the hottest radio
station connecting to the most happening International music from around the world. And they
are so exclusive that they are broadcasting only to Bengaluru and Goa. It’s International with an
Indian soul. The listeners are exposed to a prescribed dose of music or whatever gets their
groove.
The station is talking to all those who reflect the Youth and love music. Of course the audience
hears favorites like Rohit Barker, Saggy, Melodee Austin, Ryan Seacrest, Michelle and Allen
Kepler, but the new cowboys on the bandwagon are Kenny Jones, Christabel, Sriram, Suraj and
Shweta taking their shows to the extreme and rocking the studios literally.
The station has today become a house-hold name and those who have grown to love the station
are sneaking it in their homes, cars and office. But like all good things in this world, Radio
Indigo 91-9 has evolved to brilliance through bigger promotions & prizes.
AIR FM Rainbow: AIR FM Rainbow, run by All India Radio16
is a national radio station, heard all across India. This
government owned enterprise, features Hindi and regional
language songs and occasional English songs along with hourly news bulletins in English,
regional language and also in Hindi. In Bhopal, it operates on 102.1 megahertz in Hindi cum.
English language covering more than 12 districts of Madhya Pradesh and 21 Suburbs in Bhopal
City. In MP, it is also known as "Rainbow FM". In Delhi, it operates on 102.6 megahertz and
AIR FM Rainbow Delhi is the only FM Channel to be aired in as many as ten cities. In Mumbai,
it operates on 107.1 megahertz. In Lucknow, it uses the 100.7 MHz slot. In vizag, it operates on
102 megahertz. In Hyderabad, it operates on 101.9 megahertz and in Vijayawada it operates on
102.2 megahertz. It operates in Bangalore as well with a frequency of 101.3. It was earlier called
FM Metro; the name was changed to FM Rainbow in 2002. The signals of this station are very
strong and it catches till the far villages. The channel plays various genres of music unlike
private channels; it does not stick to music of just one language. It plays ghazals, soundtracks as
well as English songs, a rare occurrence in Indian radio channels. Rainbow is one of very few
Indian radio channels which air Western Music and the western music slots are really popular
with listeners. It has many western music programs like Time Out, Take off, Matchless music
hours, Live wire Plus, Wicked Hour, Footloose, You asked for it, Just for you, Radio pet house,
not only this it also has classical music shows. Almost all the radio jockeys on private FM
channels once started with FM Rainbow. National Radio Station in Trichy, AIR FM Rainbow
operates on 102.1 megahertz in Tamil language covering more than 12 districts of Tamil Nadu.
In Tamil Nadu, this radio channel is also known as "Rainbow FM". In Delhi, AIR FM Rainbow
operates on 102.6 megahertz and AIR FM Rainbow Delhi is the only FM Channel to be aired in
around ten cities. In Mumbai, it operates on 107.1 megahertz, while in Lucknow, it uses the
100.7 MHz slot. In vizag, AIR FM Rainbow is heard on 102 megahertz. The popular slot for
English music called Radio Raptures on AIR FM Rainbow is aired everyday from 7am to10am
and from 10pm to 1am and it has earned a very good audience with the passing years. Some of
the radios Jockeys of AIR FM Rainbow are Altaf, Raunak, Sunny, Wasim, Aditi and Sohail.
FEVER 104 FM: In 2006, FEVER 104 FM17, India's youngest,
hippest and most happening Radio Station that plays more music
than any other was launched. Fever 104 FM, owned by HT
Media Limited, was formed in technical collaboration with the
Virgin group. The company entered the private FM radio market in the four main cities of Delhi,
Mumbai, Bangalore and Kolkata with the brand Fever 104 FM. Fever 104 FM is a contemporary
hits music station that plays a mix of regional, national and international hits. It plays the latest
hits, all day, all the time across the cities of Delhi, Mumbai, Bangalore and Kolkata, with its
signature property of 40 minutes non-stop music. Fever 104 FM with its tagline ‘It's all about the
music!’ entered the FM radio market in key Indian cities. It is available in Delhi (since October’
06), Mumbai (since January ’07), Bangalore (since March ‘07) and Kolkata (January ‘08). In a
short span of three years, the channel's rise has been meteoric. It has gained the No. 1 position in
Mumbai and Bangalore leaving behind all the other FM channels in these cities. In terms of TSL,
Fever 104 FM has surged ahead with a total time spent listening of 386 minutes. It is No.2 FM
station in Delhi on the popularity charts.
Radio One: Radio One18 is a radio station in India. It was
launched on June 8, 2006 in Mumbai before going national in 6
more cities. It is a joint venture between Mid-day Multimedia and
BBC Worldwide and operates in 7 metros namely Mumbai, Delhi,
Bangalore, Kolkata, Chennai, Pune and Ahmadabad. Soon the service of Radio One will also be
started in Bhopal, Indore, Jabalpur and Jaipur. The station broadcasts at 94.3 MHz in all cities
except in Ahmadabad where it broadcasts on 95.0 MHz’s. It was known as Go 92.5 FM and was
broadcast on 92.5 MHz in Mumbai till 2006. In the city of Bangalore, Radio One and the
Bangalore Traffic Police, launched a carpooling drive which is has involved celebrities like
Robin Uthappa, and Rahul Dravid encouraging the public to carpool. The initiative got a good
response, and by the end of May 2009, 10,000 people are said to have carpooled in the city.
Radio Mirchi: Radio Mirchi19 is a nationwide network of
private FM radio stations in India. It is owned by the
Entertainment Network India Ltd (ENIL), which is one of
the subsidiaries of The Times Group. it is promoted by
Bennett, Coleman & Co. Limited (BCCL) which is one of
the largest media and entertainment companies in India, operating in various media segments
such as print media and television broadcasting.
The original avatar of Radio Mirchi was Times FM. Radio Mirchi began operations in 1993 in
Indore. Until 1993, All India Radio or AIR, a government undertaking, was the only radio
broadcaster in India. The government then took the initiative to privatize the radio broadcasting
sector. It sold airtime blocks on its FM channels in Indore, Hyderabad, Mumbai, Delhi, Kolkata,
Vizag and Goa to private operators, who developed their own program content. The Times
Group operated its brand, Times FM, till June 1998. After that, the government decided not to
renew contracts given to private operators.
Before we begin, let’s know a little about Radio Mirchi. Times FM was probably the most
famous radio in India which began its operation in 1993. Until 1993, AIR, a government
undertaking, was the only radio broadcaster in India. The government then took the initiative to
privatize the radio broadcasting sector. It sold airtime blocks on its FM channels to private
operators, who developed their own program content. The Times Group operated its brand,
Times FM, till June 1998. After that, the government decided not to renew contracts given to
private operators. It's the largest private FM Radio operator in the country in terms of number of
operational stations and revenue.
As per the Radio Audience Measurement Reports (RAM), Radio Mirchi has been dominating in
Delhi & is the leader in Mumbai and Kolkata. However in Kolkata they are not clear leaders in
SEC ABC segments. The SEC ABC segments were earlier dominated by Big FM & now by
Friends FM. However in the SEC D & E segments Radio Mirchi has total domination.
Playing contemporary hits songs Radio Mirchi has always been the No 1 choice of listeners. IRS
2009 reiterates the same as Mirchi has more than 41 million listeners across 32 stations. Its lead
over its nearest competitor is more than double. Its market share in revenue terms remains in
excess of 40% of the private FM industry. Radio Mirchi is the number 1 radio brand in the
private FM space.
During the year, it won a plethora of awards. It has been recognition of the brand popularity and
the creative talent behind the brand. Mirchi was voted the No. 1 media brand, ahead of iconic
brands like The Times of India and Star Plus. This unique honor was bestowed on Mirchi by the
Pitch-IMRB group's survey of the top service brands of the country. This endorses the vote of
trust that the brand has built amongst its listeners. As per Brand Reporter October 2009 issue
Mirchi was recognized as one of the game changers of the decade in the radio industry. In
December 2008, Mirchi’s website was voted the most popular TV and Radio site in India. The
survey was conducted by Metrix Labs and AC Nielsen. The survey had 1.5 million participants.
The success of the website reflects the overall popularity of Mirchi, the brand. Over the years
Mirchi have established two important landmarks i.e.:
The Mirchi Kaan Awards acknowledges and honors the contribution of individuals and
organizations that have led the way in developing clutter busting radio advertising. The awards
have been instituted to encourage continued creative focus on radio advertising.
While the parentage of the idea was that of Mirchi, the design was created and crafted by the
music fraternity itself. The jury led by Chairman, Javed Akhtar, would make any recipient proud
- the other members comprised the best in the industry: Prasoon Joshi, Anu Malik, Shankar
Mahadevan, Louiz Banks, Lalit Pandit, Kavita Krishnamurthy, Sadhana Sargam, Sonu Niigaam,
Kailash Kher, Suresh Wadkar, Rakeysh Omprakash Mehra, Ramesh Sippy and Kunal Kohli. The
jury set tough standards. This initiative of ‘Listen to my movie’ has been felicitated with one of
the most prestigious Readers Digest Pegasus CSR Awards in the ‘Silver Category’.
As a part of its CSR Mirchi initiated a program to improve the quality of life of the visually
impaired and the company came up with an initiative i.e. “audio books”. This initiative has
already reached hundreds of schools across the country.
Radio City: Radio City20 is a FM radio station in India. It
broadcasts on 91.1 (earlier 91.0 in most cities) megahertz from
Mumbai (where it was started in 2004), Bangalore (started first in
2001), Lucknow and New Delhi. It plays Hindi songs, English and
regional songs. It was launched in Hyderabad in March, 2006, in Chennai on July 7th 2006 and
in Vishakapatnam October 2007. Radio City recently forayed into New Media in May 2008 with
the launch of a new mega music portal - PlanetRadiocity.com that offers music related news,
videos, songs, and other music-related features. Radio City has launched Fun Ka Antenna -
Online Radio Station which plays hits across genres including International, Bollywood, Indipop
and Sufi among others.
Radio City Bangalore is India's first private FM radio station and was started on July 3, 2001. It
launched with presenters such as Rohit Barker, Darius Sunawala, Jonzie Kurian and Suresh
Venkat. Over the years, the station had been steadily losing popularity with the launch of newer
stations in Bangalore. The station has been criticized for multiple format changes and presenter
lineup. The Radio station currently plays a mix of Hindi and Kannada music. Recently as of July,
2006 it has announced plans to invest Rs. 700 to 800 million in the current fiscal year to set up
16 FM (Frequency Modulation) stations across India. The Chief Executive Officer is Ms Apurva
Purohit.
BIG FM 92.7: BIG FM 92.7 is a nationwide private FM radio
station in India owned by Indian businessman Anil Ambani21. It
broadcasts at 92.7 MHz (92.7FM). Currently, it covers 45 cities.
This is the only private FM radio station which is being
broadcast from Srinagar and Jammu in Jammu & Kashmir state.
It has made an announcement to invest Rs. 4,000,000,000 dedicated to transmission equipment,
infrastructure and licensing; which would make the proposed network the largest ever. From July
1, 2008, BIG FM included Singapore, the first city outside India, in its broadcasting network. It
broadcasts its programs daily from 5 to 8pm on XFM 96.3, under the name of 'BIG Bollywood
96.3FM’. Its main tagline is "Suno Sunao, Life Banao".
Radio Active: Jain Group of Institutions (JGI)22 is a conglomerate
of 35 mission driven institutions that spans the gamut of education,
from primary to higher education, and charitable schooling to
professional courses. JGI draws on the essence of tradition and
sophistication of modernization to educate the professionals of tomorrow. Inspired by its
dynamic founder and Chairman Mr. R Chenraj Jain, the JGI family is principled, proactive and
visionary.
Its vision is to contribute leaders to a vibrant and responsive India. Its mission is to provide
excellence in academic education and focuses on the holistic development of the individual. The
Vision behind Radio Active is to empower every individual in society to become a winner and an
achiever by harnessing and nurturing human potential; to sensitize society to global, national and
local issues; to use technology and human enterprise in tandem to help create a meaningful and
proactive social ambience where interdependence becomes mutually supportive and to focus on a
universally responsive India.
In keeping with its tradition of promoting the welfare and betterment of society, JGI has taken
the initiative to launch a community radio station serving the cause of progress and development
of the community at large.
The community radio station, Radio Active will seek to reach out to Bangalore’s masses on
issues concerning health, environment, development, scientific awareness, women, social issues
etc, in turn seeking to inform, educate, while entertaining the public.
-Gagan Deep