FM radio battles for Indian ears


Indians are tuning in to a wider choice of radio stations as the market picks up

By Shishi Joshi

MUMBAI, India (CNN) -- As India opens its skies to private FM radio broadcasters, listeners are beginning to wipe the dust off an estimated 150 million radio sets across the country.

Bidding for listeners' ears are a host of media groups across India, including Rupert Murdoch's STAR, media conglomerate Times of India (owned by Bennett and Coleman), the India Today group and the Mid-day group.

Each wants a slice of an advertising pie estimated to be worth 80 billion rupees (about $1.63 billion).

This is Indian radio's second coming. In 1947, when the country gained independence, it had a mere six channels, under state-owned All India Radio (AIR).

In July 1999, the government led by Prime Minister A.B. Vajpayee opened the skies to private broadcasters, permitting 150 new FM channels across 40 cities.

Licenses allocated

The four big metros of Delhi, Kolkata, Mumbai and Chennai have been allotted 12 channels each, with the balance of the 150 licenses going to 36 other cities.

However, despite the skies being cleared two years ago, it is only now that the FM stations have taken off.

Heading the latest FM craze has been Radiocity, a venture promoted by Music Broadcast Private India Ltd (MBPL) which holds FM radio licenses in six cities, including Bangalore, and is supported by News Corp's STAR, which already runs a 24-hour English news channel in the country.

Says Sumantra Dutta, chief operating officer of STAR India's radio division: "What we are looking at is the first mover advantage. We are the first private FM radio station in India, and we plan to cash in on this."

However, first mover will not be enough, experts believe.

"Too often, in radio advertising, the stuff is not too hot. FM is a tremendous opportunity. Used properly, with the right mix of editorial and advertising content, a brand can be made to come alive," says Rahul Kansal, deputy managing director of the advertising agency Leo Burnett.

Small share of advertising

Radio has only a 2 per cent share of the total advertising pie in India, compared with a global average of 5 to 12 percent.

On the higher side are countries like the United States with 13 per cent, Canada with 12.7 percent and Spain with 9.1 per cent.

But not everyone seems happy with FM gaining ground.

The Phonographic Producers Limited (PPL), a body representing music producers, has decided to take FM stations to court. The free use of songs and music, they claim, has severely affected the bottom line of these companies.

The matter now rests with the government.