Business Today

The Jangle in Jingles

FM radio needs to go beyond advertising for revenue.

By Pallavi Srivastava | Print Edition: August 12, 2007

By the end of 2007, 266 fm stations are expected to be operational across 87 cities. But even as the industry is slated to touch the Rs 1,400-crore mark by 2010 (from the current Rs 400 crore), industry experts are not really enthused by prospects. That's because the fm radio segment is still plagued with problems like little differentiation, single frequency, absence of niche genres, high content cost and emergence of competitive media. According to Nikhil Vora, Partner, SSKI, unlike the developed markets, where radio's share is 8.5 per cent, in India radio's share is likely to peak out at 5 per cent of the ad pie since the "opportunity scale" for fm channels to make material money is too small.

Abraham Thomas
That' why fm operators are looking at options beyond selling advertising space and vying for 'activation' contracts (a combination of below the line and above the line advertising). Red fm, which operates out of three circles, sees opportunities in the content business. Abraham Thomas, Chief Operating Officer (COO), Red FM, says the station is focussing on communication, creative and content solutions businesses. Red fm has created 'Creative Solutions,' a specialised group to deliver radio promotion solutions to various clients for the channel as well as for other channels.

Content syndication for non-competing channels (including recycling of old content) is another option. Radio City, a station that operates out of eight cities, has been building unique content for the last seven years and Rana Barua, National Head, Marketing, says this is a good time to leverage it by working on syndicated shows, interviews, songs and selling them in the market in the form of audio CD/DVDs.

BIG FM, from the Reliance Anil Dhirubhai Ambani Group (R-ADAG), has firmed up plans for big Digital and Digital Music. The first will take care of the online and the short-code businesses of the company, and will include city-specific websites. The 45 websites (in cities the channel will be present) will consist of local events and happenings of the city apart from filling in the user with infotainment, gossip, downloads, Bollywood news etc. "The websites will be fuelled by local advertisements and they will be relevant and useful to a user in a small city too," says Soumen Choudhury, Chief Technology Officer, big fm.

Explains Anil Srivatsa, coo, Radio Today: "While advertising and activation have become inseparable, the non-traditional modes of revenue are obviously the growth areas." Clearly in a country where radio reaches out to 99 per cent of the population but has only 27 per cent of regular listeners, revenue streams other than advertising need to be built along the way.

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