Description
The research is undertaken to find out the preferences of youth for FM music. Therefore the researcher will be able to know about the youths’ preferences regarding different types of music, different programs and some new upcoming trends in radio industry.
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RESEARCH METHODOLOGY
Objectives
Primary objectives:
? To measure Radio Listenership Habits among the Youth.
? To develop new music selection and programming strategies for Red FM.
Secondary objective:
? To analyze Five Force Model and PEST Analysis for Radio Industry.
? To analyze workings of FM radio stations.
? To analyze organization structure of Red FM
Scope of research
The research is undertaken to find out the preferences of youth for FM music. Therefore the
researcher will be able to know about the youths? preferences regarding different types of music,
different programs and some new upcoming trends in radio industry.
Researcher will also undertake study to understand what activities Red FM does to promote its
brand or to penetrate to the target segment. It will undertake study of the promotional activities
undertaken by Red FM.
Research Design
Descriptive Research:
? Involves gathering data that describe events and then organizes, tabulates, depicts, and
describes the data.
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? Uses description as a tool to organize data into patterns that emerge during analysis.
? Often uses visual aids such as graphs and charts to aid the reader
Description Research takes a “what is” approach:
? Refers to the nature of the research question
? The design of the research
? The way that data will be analyzed for the topic that will be researched
There are four methods of data collection under descriptive research. They are:
? Surveys
? Interviews
? Observation
The methods used for this research would be mainly doing survey with the help of questionnaire
and taking informal interview of people while doing survey of people.
Sources of Data
Primary and secondary both type of data will be used for the study.
Primary Research:
Primary research will be done through survey of the youth.
Secondary Research:
Secondary data will be collected from radio channel itself, magazines related to the industry,
newspapers and internet.
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Sampling Design Process
Target Population:
Target population is youth of the city Ahmedabad between age group of 18 to 40.
Sampling Technique: Convenience Sampling
The researcher performed a youth audit. Researcher visited majority of collages, malls and other
such places in Ahmedabad. From there, researcher has collected the contact details of these
samples and thus formed database. Thus it was a convenience sampling.
Sample Size: 150
As the survey is for youth only, 150 sample size has been taken by the researcher.
Data Analysis
The researcher will use inferential statistics (through SPSS) in order to draw a conclusion. Result
of the study will be put in tables and graphs for easy understanding of the findings of the
research.
Limitations of the Study
Personal Bias:
People may have personal bias towards particular investment option so they may not give correct
information and due to which conclusion may be derived.
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Time Limit:
The time duration of the research is short that?s why the information is not covered fully.
Area:
The area was limited to the part of Ahmedabad only.
Sample Size:
The last limitation is Sample size, taken by us is of 150 only; due to which we may not get the
proper results.
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MEDIA AND ENTERTAINMENT INDUSTRY
Introduction:
Media and Entertainment is one of the most booming sectors of the Indian economy. The sector
is rapidly evolving and has a tremendous untapped potential stored in it. The Indian Media and
Entertainment industry stood at Rs. 43,700 crores in the year 2009 and is expected to grow at an
annual rate of 19% till the year 2010.
Overview:
The Media and Entertainment industry is on of the most booming sectors in India. The global
entertainment industry is projected to reach US$ 1.8 trillion by 2015. Asian region expected to
play a central role in it, with India poised to contribute about US$ 200 billion i.e. a sizable chunk
of the global industry.
According to the annual edition of the FICCI, the size of the Indian Media and Entertainment
industry in the year 2009 was Rs. 43,700 crore. The Indian Media and Entertainment industry
grew from Rs. 35,300 crores to Rs. 43,700 crores during the year 2008-09. The sector has
immense potential stored in it. The Indian Media and Entertainment industry is expected to grow
at an annual growth rate of 19% to reach Rs. 83,740 crore by 2010.
The Indian Media and Entertainment industry, with the prominent segments being films,
television, and music has earned high revenues in the recent past. The Indian Media and
Entertainment industry has risen to the threshold of a large global market. The year 2005 saw
the entry of new players across all the segments of the industry including Reliance.
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The Indian Media and Entertainment industry can be categorized as follows:
? Film Entertainment
? Television
? Music
? Radio
? Print
Technology has changed the face of entertainment today. The ongoing change in technology,
products and distribution channels has created significant opportunities in the industry for growth
and development. The revolution in the information technology has resulted in the emergence of
cable wires, networks and most importantly the “internet” which has revolutionized the Media
and Entertainment industry.
The emergence of multiplexes and entertainment malls has redefined the entertainment industry.
This booming sector in India has also encouraged and many foreign investors who are making
efforts to tap the Indian market.
Sector Outlook:
The Media and Entertainment is on of the fastest growing sectors in India. The Media and
Entertainment is on of the fastest growing sectors in India. The increasing rate of urbanization,
the penetration of television and radio industry in the rural areas with the help of the technology
and the rising levels of incomes of the people in India has facilitated the growth rate of Media
and Entertainment industry in India. The Indian Media and Entertainment industry stands at the
value of Rs. 43,700 crore currently and is expected to grow at an annual growth rate of 19% to
reach Rs. 83,740 crore by 2010. The Indian economy is growing at a fast rate and the Media and
Entertainment industry is expected to benefit significantly from it.
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The industry witnessed a recovery in the last quarter of the year and this is expected to continue
going forward. 2010 is expected to see the industry coming out of the shackles of the slowdown
and ad spends increasing. Incidentally, the subscription revenues of TV and print grew by 8.5pc
in 2009 to reach INR 241 billion.
Some sectors were impacted more than the others like OOH, Films and Radio, which registered a
negative growth during the year.
In 2010, they are expected to recover somewhat with a moderate growth rate. Last year print
showed a very moderate growth, whereas TV industry showed a good growth rate. Music,
Internet, Gaming and Animation brought reasons to cheer for the industry with their growth rates
touching double digits, albeit on a smaller base.
Advertising spends grew at CAGR of 10% in the past three years with almost flat growth in
2009. Going forward, it is expected to exhibit a robust growth rate CAGR of 14% over the next
5 years. Potential upsides could take this higher.
Growing potential of the regional markets, penetration of newer digital TV distribution
platforms, increasing competition, innovation across product, processes, marketing and
distribution models and growing importance of pay audiences were some of the key highlights of
the previous year.
However, it was DTH which proved to be a very successful medium and helped in increasing the
pay TV subscriber base even during challenging market conditions. IPL as a sports property has
grown from strength to strength and is here to stay with advertising revenue growth of 80pc to
reach Rs. 4.5 billion in 2010.
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Commenting on the highlights of the report, Dr. Amit Mitra, Secretary General, FICCI said,
“The media and entertainment industry represents the face of consumers in India. It is a part of
our daily life and touches the maximum number of people. Despite the challenging last year, the
potential of the industry to perhaps grow beyond 13 % per annum over the next few years.”
Rajesh Jain, Head Media and Entertainment, KPMG in india said, “The year 2009 saw Media
and Entertainment industry growing through a tough phase as advertising revenues were
impacted in line with the challenging economic scenario. However, the subscription revenues
continued to grow.
Industry players looked at sustainable cost optimization and sought means to better connect with
their customers. The untapped potential for growth in media reach, impact of digitization and
convergence, better consumer understanding, sustained efforts in innovation, and enhanced
penetration of regional markets all augur well for the industry.”
The projected 13% growth rate per annum for the sector for next 5 years will be driven on the
back of factors like favorable demographics, expected recovery in GDP growth rate, strong long
term fundamentals of the Indian economy, expected rise in advertising to GDP ratio compared to
developed economies and increasing media penetration.
Given the industry?s changing landscape and emerging challenges, the focus of industry players
too is changing; with a stronger focus on profitability. Hence, media companies are increasingly
concentrating on cost optimization, strengthening existing operations and processes, talent and
human capital management, innovation and assessing options for growth through consolidation.
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Factors like Digitization, Regionalization, Convergence of new media etc are some of the trends
in the industry and are expected to drive growth going forward.
Emerging Trends:
1. New distribution channels:
The latest channel through which the consumers are obtaining entertainment is the mobile
phone downloading movies clips, ringtones etc. Internet is also fast emerging as a widely
used distribution channel.
The two main trends that have been observed during the last year are:
? Diversification by media companies
? Increased foreign investment
2. Convergence:
In the future, convergence is expected to have a significant impact on the growth of Media
and Entertainment industry. Convergence can be defined as changing the way consumers
consume content and the manner content is delivered to consumers.
“In television, we expect the balance of power to shift in favor of broadcasters with the
adoption of alternative distribution platforms such as DTH (direct-to-home), CAS
(conditional access system), and IPTV (internet protocol television)”, said Mr. Narasimhan,
Head, Crisil Research.
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The process of convergence is facilitated and accelerated by the rapid technological advances
and the broadband throughout the world. Convergence is expected to change the traditional
industry structures, the existing business models and distribution mechanisms.
3. Capitalization:
In order to capitalize on this fast growth ahead, companies are making large-scale
investments in terms of infrastructure. For instance, the Modi Family has invested around Rs
1,500.0 million towards the construction of multiplexes that can screen around 16 films
simultaneously. At the same time, majors such as Zee Telefilms and Eenadu TV are
expanding their horizons to other markets as well.
4. Increasing Domestic Entertainment:
Some of the major fast growing segments in the domestic industry include the music, cable
and satellite advertising, infrastructure, exports, animation and FM. The domestic music
industry was estimated at around Rs 17,000.0 million in the year 1999 and is projected to
grow to around Rs 30,000.0 million by the end of the current year. The export segment is
also expected to increase from around Rs 4,000.0 million to around Rs 10,000.0 million
during the same period. Revenues from the animation segment are also forecasted to increase
from Rs 2,200.0 million to nearly Rs 4,400.0 million by the end of the current year.
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SWOT Analysis:
No. Strengths Weaknesses
1. Media and Entertainment is one of the
most booming sectors in India due to its
vast customer reach. The various
segments of the Media and
Entertainment industry like television
and film industry have a large customer
base.
The Media and Entertainment sector in
India is highly fragmented.
2. The growing middle class with higher
disposable income has become the
strength of the Media and Entertainment
industry.
Lack of cohesive production and
distribution infrastructure, especially in the
case of music industry.
3. Change in the lifestyle and spending
patterns of the Indian masses on
entertainment.
The lack of efforts for media penetration in
lower socio-economic classes, where the
media penetration is low.
4. Technological innovations like online
distribution channels, web-stores, multi
and mega plaxes are complementing the
ongoing revolution and the growth of
the sector.
5. Indian film industry is second largest in
the world and the largest in terms of the
films produced and tickets sold.
6. The low cost of production and high
revenues ensure a good return on
investment for Indian Media and
Entertainment industry.
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No. Opportunities Threats
1. The concept of crossover movies, such as
“Bend It Like Beckham” has helped open
up new doors to the crossover audience
and offers immense potential for
development.
Piracies, violation of intellectual property
rights pose a major threat to the Media and
Entertainment industry and companies.
2. The increasing interest of the global
investors in the sector.
Lack of quality content has emerged as a
major concern because of the „quick –
buck? route being followed in the industry.
3. The media penetration is poor among the
poorer sections of the society, offering
opportunities for expansion in the area.
With technological innovations taking
place so rapidly, the media sector is facing
considerable uncertainty about success in
the market place.
4. The nascent stage of the new distribution
channels offers an opportunity for
development.
5. Rapid de-regulation in the industry.
6. Rise in the viewership and the
advertising expenditure.
7. Technological innovations like
animations, multiplexes, etc and new
distribution channels like mobiles and
internet have opened up the doors of new
opportunities in the sector.
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Scope of Media and Entertainment Sector:
Because of its ability to influence the thoughts and behaviors of consumers, Media and
Entertainment industry is considered a very powerful industry. India is becoming the leading
destination of global investors in this industry. Various studies and figures reveal that Indian
Media and Entertainment industry has significant potential of growth stored in it.
Current Scenario:
Media and Entertainment industry is one of the most flourishing sectors in India. The Indian
Media and Entertainment industry grew from Rs. 35,300 crores to Rs. 43,700 crores during the
year 2008-09. The liberalization of the media sector has opened up the gates of opportunities
and growth. India is witnessing a revolution in this sector with the emergence of new
technologies. Many companies are taking initiatives to set up digital theatres, multiplexes etc.
India is emerging as a global destination for the Media and Entertainment players because of the
following reasons:
? The number of channels is increasing each day.
? India is emerging as one of the world?s largest markets for digital and mobile music.
? Entry of private sector companies and increasing FDI and FII.
? The concept of crossover movies and crossover audience is also gaining momentum.
? The Indian Media and Entertainment industry is also making its presence felt in the global
market with its movies and music.
? India?s large pool of creative skills and growing domestic market for animation and special
effects industry.
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Piracy and violation of intellectual property rights have posed a major threat to the Media and
Entertainment companies worldwide. Lack of quality content has also become a major area of
concern for the Media and Entertainment companies in India.
Given the high rate of economic growth and technological developments, Indian Media and
Entertainment industry is poised to register a tremendous growth in the coming years.
Future Scenario:
The future of Media and Entertainment industry depends largely on the growth of Indian
economy. The Indian economy is growing at a fast rate; thus, there is also a bright future in store
for all the segments of the media and the entertainment industry. With the incomes of the people
rising at a fast rate, people are spending more on their entertainment and leisure activities. India
is poised to enter the period of immense growth in this sector. The global entertainment industry
is projected to reach US$ 1.8 trillion by 2015. The Indian Media and Entertainment industry is
expected to grow at and annual growth rate of 19% to reach Rs. 83,740 crore by 2010.
The expected CARG of various segments of the Media and Entertainment industry in India till
the year 2010 is as follows:
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http://www.naukrihub.com/india
The projected size of the various segments of the Media and Entertainment industry in India till
the year 2010 is as follows:
? Radio – Rs. 1200 crore
? Music – Rs. 740 crore
? Television – Rs. 42700 crore
? Film Industry – Rs. 15,300 crore
? Print Media – Rs. 19500 crore
Exciting new developments in the technologies used in Media and Entertainment industry are
taking place. Animations, multiplexes, new distribution channels, the use of internet, are
redefining the entertainment industry. All these factors will favor the growth of Media and
Entertainment industry in India.
32%
1%
24%
18%
12%
radio
music
television
film industry
print media
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Categorization of the Sector:
The Indian Media and Entertainment industry can be categorized as follows:
? Radio
? Film Industry
? Television
? Music
? Print
? Live Shows
Radio:
Radio has made a comeback in the lifestyles of Indians. Radio has the reputation of being the
oldest and the cheapest medium of entertainment in India. The radio industry has been
completely reshaped by the various private players that entered the sector after the government
allowed foreign investment into the segment and opened the licenses to the private players.
The Indian government has already given 338 licenses for FM radio channels in 91 big and small
towns and cities. The current size of the radio market in India is Rs. 300 crores and is expected
to achieve the highest growth rate of 32% in coming years. The quality of the sound and the
music has improved significantly with the emergence and use of satellite radio. The audience
profile has also shifted to the high – income group. Local advertising, lower amount of money
spent by the companies to advertise on radio is an added attractiveness for the players. All India
Radio (AIR) – the national service provider owned and operated by the Ministry of Information
and Broadcasting under the Government of India – is the largest player in the industry.
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Film Industry:
Next to Hollywood, Indian Film Industry is said to be the largest in the world. And it is the
largest in terms of films produced and tickets sold.
The Indian Film Industry is currently worth about US$ 1256 million and is expected to grow at a
Compounded Annual Growth Rate of 18% for the next 5 years. Nearly one thousand films are
produced every year. The technology used and the special effects in movies are becoming
increasingly sophisticated and animation is also finding a huge market with kids.
The industry is currently witnessing the trend of more digital cinemas and growth of multiplexes.
The Dubbing industry has grown at the rate of 25-30% over the last 4-5 years. Many
international films are dubbed in local languages and shown in India. India has over 5 million
home video and DVD users. The Indian Film Industry is also making its presence felt in the
international market. The foreign investment in the Indian Film Industry is also increasing
significantly. In fact, it witnessed the maximum flow of foreign investment in 2006.
Regional (especially southern) films command almost 60% of the total Indian film market with
the rest being commanded by Hindi films.
Television:
The television industry is witnessing a spate of new channels being launched every year. TV is
also penetrating into the rural areas and is a promising segment. Homes with TVs are expected
to grow from 112 million to 200 million in a few years.
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India boasts of being the third largest television market in the world today. And cable
penetration (pay TV market) is expected to grow from the present 70 million to all TV homes.
More than 350 channels (paid and free) are available to viewers in India today.
The fact is that 40% households of India are still without television connectivity highlights the
scope of growth in the segment. The majority of the revenue generated in the television industry
is through advertisements, followed by subscriptions. The Indian television advertisements
market is currently valued at about US$ 1067 million and is expected to grow at a rapid rate with
the increase in the number of channels and the television viewers. Over the next five years, the
subscription revenues are poised to be the growth driver of the Indian television industry. The
number of pay TV homes and the increased subscription rates will increase the subscription
revenues. The spread among the lower – income groups is very low and offers a wide scope for
growth. The Indian television industry is currently being dominated by Star India, which is the
top player in the sector at present.
Music:
The Indian entertainment industry is incomplete without music. Other segments such as remix,
Indi-pop, mobile music have also gained popularity.
The Indian film industry is inseparable from music. Music contributes as much as 15% of an
individual film?s earnings. The major problem that has become a risk to the existence of the
music industry itself is piracy. Piracy has resulted in a sluggish growth of the worldwide music
industry.
Recently, „mobile music? and „licensed digital distribution? services helped in the recovery of the
music industry. Ringtones are the dominant component of the mobile music market. For a long
time, the Indian music industry was dominated by the film music but now a significant portion of
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the revenues are also contributed by music videos and private non – film albums. Indian music
also has a large market overseas. There is also a demand for classical and devotional music. The
new distribution channels like online music stores are gaining popularity. T-Series, Sony and
Venus are some musical players in India.
Print Media:
India offers a promising market for the print media industry. The expected CAGR of 12% up to
2010 is a result of the increasing rate of literacy and thus the increase in the number of people
reading newspaper and magazines. Also, the demand for the latest events in the country and the
world is driving the newspaper industry growth. In 2010, the print media is expected to reach
Rs. 19500 crore from its present value of Rs. 10900 crore.
The bright future and the immense scope of the Indian print media have also aroused the interest
of foreign investors and recently the government has opened up the sector to foreign investment.
Foreign media has also shown interest in investing in Indian publications. The revenues for
India?s newspaper market are generated from advertisement and circulation. India?s growth rate
in this segment is poised to be higher than the average rate of growth in the Asia – Pacific region
over the next four years.
Digital printing, new ways of promoting and distribution are the latest trends and content being
the focus of the print media industry. A few leaders in India in this segment are: Times of India
Group, Dainik Jagran, Lok Satta, The Hindustan Times and The Hindu.
Live Shows:
Live entertainment is a huge source of revenue for the global Media and Entertainment industry.
Live entertainment sometimes also called event management – is growing at a fast and steady
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rate. The number of corporate awards, television, films, sports events are increasing rapidly,
helping the sector grow at a fast rate.
The current live entertainment segment of the Media and Entertainment industry comprises a
small number of large event management companies and a large number of smaller companies.
Various types of live entertainment events are:
Award Shows
Celebrity
Appearances
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The revenue streams for the live entertainment sector are:
Problems faced by the segment:
? Lack of adequate infrastructure for organization and staging of events.
? Sophisticated lighting and special effects equipment required is hired from abroad. Presently
imports are hampered by lengthy procedure for import of such equipment.
? High levels of entertainment tax imposed by the government.
The major challenge faced by the segment is the unorganized nature of most event management
companies, which continues to hinder the growth of this segment.
Ticket Sales
Sponsorship
Receipts
Advertising
Revenues
Licensing of
IPR
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Comparison between Sectors:
Radio
Film
Industry
Television Music Print Media
Live
Entertain-
ment
Current Size Rs.300 Crore
Rs. 6800
Crore
Rs. 14800
Crore
Rs. 700 Crore
Rs. 10900
Crore
Rs. 800 Crore
Projected
Size by 2010
Rs.1200
Crore
Rs. 15300
Crore
Rs. 42700
Crore
Rs. 740 Crore
Rs. 19500
Crore
Rs.1800
Crore
CAGR 32% 18% 24% 1% 12% 18%http://www.naukrihub.com/india
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RADIO INDUSTRY
Introduction:
Old media don?t? die! They just bounce back in new avatars. Not so long ago radio had been
written off as fuddy-duddy, down market and not so cool. Television and later “new media” were
touted to being the media of the future. But thanks to technology radio is making a comeback. In
fact, in its new avatar-fm-radio is all set to become the hippest, coolest and most with -it
medium.
FM radio is a new entity altogether and has to deal with new market dynamics. Media owners
dealing with new markets will virtually have to draw up their strategies as they go along, create
programming that is new, innovative and grab away eyeballs from TV sets and make them tune
into their radio sets. It?s a whole new challenge and competition is never far away. Ad revenues
will also not be easy to come by, as advertisers will expect media players to put their money
where their speakers are before they commit large sums of money towards radio advertising. The
other challenge for radio in attracting advertisers is the nature of the medium-radio has always
considered being a reminder medium. The involvement of listeners to radio is low, Vis a Vis
television or print media.
However in spite of the various challenges the emergence of private FM stations is certain to
increase the quantum of radio advertising in the country , much like satellite channels did to the
quantum of television advertising in the country. That should open up a vast new market of
consumers-100 million Indian households own an estimated 150 million radios, outnumbering
television sets 3:1.
The geographical area covered by radio in India in India is as high as 98 percent and the
penetration level is approximately 97 percent. But FM presently covers only 17 percent of the
area and 21 % of the population of India through transmitters. Currently radio has just 2 percent
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of the 9000 crore Indian advertising market according to an Arthur Anderson?s survey. Globally
depending on each country, radio has a 5 % to 12 % of the advertising cake. On the higher side
are countries like the United States with 13 %, Canada with 12.7% and Spain with 9.1%.
FM station executives are not forthcoming on multi-platform strategies as yet. Given that radio
has penetrated into 100 million homes and a FM set costs around Rs. 50/- FICCI estimates FM?s
share up from the present 1.5 percent to 5 % in five years. They have also forecasted that
revenues from radio advertising in India will be Rs. Rs. 1200 crores by 2005 and Revenue of
radio services is expected to rise to Rs 689 crore by 2008 at a CAGR of 30 per cent.
While TV is a family medium, radio is personalized. Also advertising of certain product seems to
work very well while some might not. For example, cellular phone service or auto related
products would have a good impact when advertised on radio is primarily known as a “drive
time” medium most people who turn in are doing so while commuting. Thus the potential if FM
is better is bigger town, as the car population is much bigger. This would be the key when
evaluating the medium. Also one must not forgot that radio continues to be a medium that has
tremendous reach among the poor and marginalized sections of society.
With the coming of more channels, and the emergence of lifestyle advertising, radio will become
a push and pull medium. As said earlier, is not just making a comeback but is being reincarnated
into a new avatar.
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History of Indian Radio:
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 ci t i es.
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, t he bi ddi ng 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.
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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 players. Currently, FM coverage in India is restricted to just 17% of the
country, compared to 89% of All India Radio (AIR).
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Advent of Format Radio:
The arrival of 'Moving Pictures' with sound and then 'Television' were expected to be the death
knell for 'Radio'. However Radio has not just survived repeated predictions of its demise but
grown tremendously. It has benefited listeners and advertisers alike and earned the status of a
'Constant Companion'... What allowed Radio to accomplish this feat? Read on for the long
journey the Radio industry has covered thus far.
It was way back in 1895, that Guglielmo Marconi invented an antenna to send and receive radio
signals. It took quite a while before Reginald Fessenden developed the first radio receiver in
1913. However, experts give a lot of credit to David Sarnoff who actually conceived what is
called as the "radio music box". It was Sarnoff who suggested that radio should be mass-
produced for public consumption. His persistence paid off in 1919 when such sets were available
for general purchase. This saw the beginning of what was later looked on as the 'Golden Age of
Radio'.
Early 1920s saw the launch of commercial radio. People in households would gather around the
radio to listen to their favorite programs much as they do today with TV. Radio became the first
medium delivering entertainment to the masses in their homes. The 1st paid announcement on
radio was a 10-minute capsule from Howthorne Court; a Queens based Real Estate Company.
This era was characterized with 'block programming' wherein radio offered something to
everyone. News, drama, sports; live musical recordings would be presented in 30 or 60-minute
programs. A network soap opera could be followed by a 15-minute newscast followed by one
hour of a concert.
Then in the 1950s TV began to catch the public's attention. Audiences were charmed by the
audiovisual experience of TV. A large number of popular shows moved from radio to TV. That
was not all, as the radio industry was also losing a large number of talented staff to TV.
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At this point in time, radio experts discovered an opportunity that only radio could provide. They
realized that radio was the only medium that could be used while doing other things, like getting
dressed for work, cooking a meal, traveling to office, studying and more.
Radio turned 'local' and moved to what is known in the industry as 'Format' programming. This
era also spawned two of radio's greatest strengths: immediacy and local service. Format radio
strategy was based on providing the same kind of entertainment to a selected audience,
throughout the day, seven days a week.
As the story goes, Storz and McClendon used to frequent a local malt shop, which had a jukebox.
They observed that the customers would usually come and play the same songs that they liked,
over and over again. In fact, the staff serving these people would end up playing just the same
songs even when the shop was closed. From this insight emerged the "Top 40" format or the
"Contemporary Hit Radio (CHR)" format were the most popular hits would be played on a
higher rotation.
This led to a change in the way radio time was being sold. Sales people shifted from selling
programs to selling commercials. It also led to a shift in the way radio programs were scheduled.
As radio was being used as a background medium of entertainment, it had to be relevant to the
listener at every point of time in the day. The shows therefore had to be reflective of various day
parts in the life of the listener.
Irrespective of the form it came in, format radio definitely made radio not just survive the
onslaught of TV but also made it grow tremendously. Being the only medium that could be
carried and used wherever you are, it could update you about your world throughout the day
while providing you with the entertainment you like all the time. Radio became "The Constant
Companion".
29 | P a g e
The total number of radio sets at the time of independence in 1947 was a mere 275000.at that
time a radio receiver used to be a status symbol in this country. But today its possession is taken
for granted. According to estimates, there are radio sets in about 105 million households in the
country.
General Overview:
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India. The estimated worth of the industry was Rs 3
billion in 2005 and the spiraling growth is predicted to make the industry worth Rs. 12 billion
with almost three times the present number of FM stations.
The public radio broadcaster is AIR is the oldest FM station in the country. AIR has a wide
reach that spans the length and breadth of the country. Apart from that there are FM, community
and satellite stations in our country. The change in the FM policies has been a precursor for
growth in the number of FM stations in the country. This change came at a time when there
were several advancements in technology, the media industry was growing and people were
demanding alternative options for entertainment. All these conditions favored for a kick-start of
private radio industry in India. It was time for change in the radio industry as India was lagging
behind by few decades when compared to many countries in the world.
30 | P a g e
So what exactly was the scenario and how did it change?
The FM policy until the late nineties was biased towards the public broadcaster. The first phase
of privatization in the radio industry happened in the year 1999-2000. The license fee fixed was
very high, with an additional increase of 15% on the license fee year on year. This policy change
was the new beginning which radio industry needed in the country. 108 radio stations opened in
eight cities across India. However, the high license fees continued to affect the stations, as they
were not even able to break even and were accumulating losses.
In 2006, the phase two of FM policy brought a radical change to the whole radio industry. There
was a shift from fixed license fee to the revenue sharing model. Under this policy, the
companies would pay to the government only 4% of their annual revenues or 10% of One Time
Entry Fee (OTEF), whichever was higher. The companies that already had radio stations could
also shift to this model of revenue sharing by paying an OTEF. OTEF is the average amount of
the number of successful bids in the city. The new shift encouraged many companies to venture
to this media segment. Around 266 stations were bid for in 91 cities in phase two, this number
was in addition to the existing 21 stations in several cities. The license was valid for a period of
10 years from the day of Rs. 1100 crores. The media and entertainment industry was greatly
encouraged than the previous phase as experts predict bidding for another 7oo stations with the
number of stations rising to a sum of 1000 stations. The FM boom set to take off not only in the
metros and capital cities but also in tier 2 cities and towns with many prominent companies
investing money here.
After the reforms in the year 2006, the map of radio industry was redrawn and many prominent
companies played a very important role in this event. Prominent among them were ENIL, HT
Media, Suryan FM, Adlabs etc. A government imposed rule did not allow any company to have
a stake of more than 15% in the total FM stations and a company could not have more than one
station in any city. Because of this rule, Suryan FM and Adlabs had to return around 30 stations
each after the 200d bidding process.
31 | P a g e
There is also cap on foreign companies investing in radio stations in India. The FDI policy
introduced in 1995 enforced a 15% cap on investment by the foreign companies. Because of this
constraint, many companies have tied up with other radio channels in India to mark their entry in
this market. These companies include BBC, Radio Astro, and Virgin to name a few.
There has not only been an increase in the number of stations for people to tune in to but the
number of devices through which they can access this medium has also increased. Today we
have radio transmitters, stereo?s, Personal Computers, Car stereos, mobile phones, FM players,
MP3 players, and several different devices to receive an operating radio frequency. Users are
consuming radio not just from the traditional and new media is still in the nascent stage, it points
towards a very exciting and interesting future. Companies offering DTH services are
broadcasting radio channels live on TV, making it another medium for offering radio service.
E.g. Tata Sky is broadcasting AIR channels. The media industry is witnessing convergence of
different media and content in this content starved industry.
Radio has many advantages for the audience, for instance the involvement and interaction
required is minimal when compared to TV, internet or mobile. Radio is more of a background
medium that is also portable and hence is leading a parallel existence of its own. The equipment
can be purchased for as cheap as Rs. 50.
One of the most important issues that would concern any radio channel would be the
measurement of listenership of their channel, as the measurement is directly linked to the money
the advertisers will be willing to spend on their channels. Radio channels initially had their own
company specific methods of tracking listenership when there was no credible mechanism to
track listenership. IMRB and The Nielsen together under TAM have introduced RAM, Radio
Audience Measurement, to calculate the people listening to which, what, when and how much of
a radio channel. RAM, introduced in March 2007 came into effect from September 2007. The
measurements provided are on a weekly basis. RAM follows the Diary method of measurement,
32 | P a g e
interviewing 480 people in five cities. The panel chosen has to fill the diary details of what they
listen to every 15 minutes, everyday. The reach for a radio channel is calculated only if a person
has listened to radio for more than 8 minutes. The responses collected every week are then
analyzed. Presently this is the basis of audience measurement for radio channels in India. Radio
stations also have an in-built mechanism of measuring the audience by estimating the number of
people who called up to the number of people who were actually listening to the program.
Another measurement technique is the Indian Listenership Track conducted by MRUC and its
partner agency, AC Nielsen ORG-MARG that used the Day After Recall mechanism. This was
the initial measurement technique used by FM channels to measure the number of listeners tuned
in at any point. However this mechanism was discontinued because of the huge time gap
between the time the user would have listened to a program to when the user recalls it. This
method is still in vogue but it is not used widely.
Radio industry has evolved from a single public broadcaster (AIR) to hundreds of FM channels
today. What comes to the fore is interesting issues like setting up of a radio station, the
competition emerging, the need for content differentiation, and the fight for advertiser?s
attention.
33 | P a g e
Early 2000
80’s – early 90’s 70’s
Radio – the leader in media
Radio - the dead media
Public
broadcaster
Slow songs
RJs – Classical -
Iconic
Amin Sayani…
High incidence of
speech
programming
Radio – The
entertainment maestro
Fresh, new, and
dynamic..
Music led, speech
programming
limited to jock-talk
and programme
formats built in
music shows
2-3 channels
fighting for market
share with almost
similar
programming
M
e
d
i
a
P
r
o
m
i
n
e
n
c
e
Late 90’s Current
RJs -
Becoming
staid
Old time
music
Stuck in the
past
AIR FM starts
with more hip
and interactive
programming…hit
music…request
shows….
dedications
Revival of Radio
Advent of FM
TV the ruling king, Radio – only
Vividh Bharati
No TV
Advent of Private Channels -
2-3 stations
Private Radio Platform….buzzing
with choices…almost 10 in
number…fighting for differentiation,
yet to go niche
Small differences with non-stop
music, English music...TV stars as
RJs...mood led programming...etc…
The radio market is now
virtually unrecognisable
from the time when the
BBC was dominant
34 | P a g e
Characteristics of Radio:
1. Cost and Efficiency:
One of the main strengths of radio as an advertising medium is its low cost. Radio
commercials are very inexpensive to produce. They require only a script of the commercial
to be read by the radio announcer or a copy of a prerecorded message that can be broadcast
by the station. The cost for radio time is also low. The low relative costs of radio budget
needed for an effective radio campaign is often lower than that for other media. The low cost
of radio means advertisers can build more reach and frequency into their media schedule
within a certain budget. They can use different stations to broaden the reach of their
messages and multiple spots to ensure adequate frequency.
2. Selectivity:
Another major advantage of radio is the high degree of audience selectivity available through
the various program formats and geographic coverage of the numerous stations. Radio lets
companies focus their advertising on specialized audiences such as certain demographic and
lifestyle groups. Most areas have radio stations with formats such as adult contemporary,
easy listening, classical music, country news/talk shows to name a few. Radio can reach
consumers other media can?t. Radio has become a popular way to reach specific non –
English speaking ethnic markets. As mass marketing gives way to market to market
segmentation and regional marketing, radio will continue to grow in importance.
3. Flexibility:
Radio is probably the most flexible of all the advertising media because it has a very short
closing period, which means advertisers can change their message almost up to the time it
goes on the air. Radio commercials can usually be produced and scheduled on very short
notice. Radio advertisers can easily adjust their messages to local market conditions and
marketing situation.
35 | P a g e
4. Mental Imagery:
A potential advantage of radio that is often overlooked is that it encourages listeners to use
their imagination when processing a commercial message. While the creative options of
radio are limited, many advertisers take advantage of the absence of a visual element to let
consumers create their own picture of what is happening in a radio message. Radio may also
reinforce television messages through „image transfer?.
5. Integrated Marketing Opportunities:
Radio provides marketers with a variety of integrated marketing opportunities. Radio
stations become an integral part of many communities, and the RJs and program hosts may
become popular figures. Advertisers often use radio stations and personalities to enhance
their involvement with a local market and to gain influence with local retailers. Radio also
works very effectively in conjunction with place-based/point of purchase promotions.
Retailers often use on-site radio broadcasts combined with special sales or promotions to
attract consumers to their stores and get them to make a purchase. Live radio broadcasts are
also used in conjunction with event marketing.
6. Creative Limitations:
A major drawback of radio as an advertising medium is the absence of a visual image. The
radio advertiser cannot show the product, demonstrate it, or use any type of visual appeal or
information. Because of these creative limitations many companies tend to ignore radio, and
agencies often assign junior people to the development of radio commercials.
7. Fragmentation:
Another problem with radio is the high level of audience fragmentation due to the large
number of stations. The percentage of the market tuned to any particular station is usually
very small. Advertisers that want a broad reach in their radio advertising media schedule
have to buy time on a number of stations to cover even a local market.
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8. Chaotic Buying Procedures:
It should be readily apparent how chaotic the media planning and purchasing process can
become for the advertiser that wants to use radio on a nationwide spot basis. This problem
has diminished somewhat in recent years as the number of radio networks and of syndicated
programs offering a package of several hundred stations increases.
9. Limited Research Data:
Audience research data on radio are often limited, particularly compared with TV,
magazines, or newspapers. Most radio stations are small operations and lack the revenue to
support detailed studies of their audiences. And most users of radio are local companies that
cannot support research on radio listenership in their markets. Thus, media planners do not
have as much audience information available to guide them in their purchase of radio time as
they do with other media.
10. Limited Listener Attention:
Another problem that plagues radio is that it is difficult to retain listener attention to
commercials. Radio programming, particularly music, is often the background to some
other activity and may not receive the listeners? full attention. Thus they may miss all or
some of the commercials.
11. Clutter:
Clutter is just a problem with radio as with other advertising media. Advertisers must
create commercials that break through the clutter or use heavy repetition to make sure their
messages reach consumers.
37 | P a g e
Constituents of the Industry Vertical:
To understand the radio industry verticals it is important to understand where radio stands in the
hierarchy of media. Media is classified into broadcasting, print and new media. Each of these
can be further sub divided. The broadcasting sector is divided further into Television and Radio
broadcasting.
38 | P a g e
Radio Industry
Content:
The content vertical would include people involved in creating, planning and programming
content, Radio Jockeys etc. This division concerns with everything that is involved in creating a
final product for the consumers to listen. This happens mostly in house in any station. Though
there are few programs that are common across all stations of a particular FM channel, this is
produced in house in only one particular station. These programs are mostly interviews of top
celebrities, etc. There are not many channels that out source their content creation to production
houses like how it happens in television.
Communication:
This would include Marketing, Sales, Market Research, Audience measurement etc. It is
essential for the radio station to make its presence felt among the masses and also catch their
attention so that the station can pool in advertisers. For this it is also necessary to understand
what kind of program people would want to listen to and what kind of program will retain the
consumers listening to the station. Hence, market research is very necessary, at the same time it
Content
Communi-
cation
Techno-
logy
39 | P a g e
is also important to understand how the competitors are faring. All these profiles come under the
vertical of communication.
Technology:
One of the main reasons for expansion of the radio industry is advancements in technology.
Transmission equipment available is digitally enhanced. The programming studios have to be
state of the art for good quality programming. Up to date softwares for recording or content and
transmitting is essential.
It does not end with the superior transmission technology instruments and broadcasting but also
the customer-company relationship enabling systems like SMS, calls from mobiles. There is
also need for a large database that has to be maintained of the callers, people who send messages.
All these things become on important role in developing a sustained relationship with the
consumer.
Specifically sound engineers and professional programmers will handle the above technological
devices. There are also people who build studios and rent it for people to program their content.
40 | P a g e
Areas of Operation:
The above understanding of the verticals will give help understand the several areas of operation
of a radio channel.
The most important area is distribution business as it consists of acquiring and owning a
broadcast station. There is a process of bidding for a broadcast station and this is done
individually for every city. Once the license is acquired, the channel has to set up a production
studio for recording and editing programs. This requires investment of a great deal of capital,
but once it is acquired, maintaining it would not be such a costly affair. The production house is
an asset for the channel because it is rented occasionally to other parties also.
The content business is second most important area of the business for the survival and sustained
growth. This involves understanding what content the people will listen, plan, produce and edit
it. Content creation is a very important task as the very success of a channel lies on how well it
is able to cater to its consumers. Most of the content creation is in house and the use of the
content is limited to airing on radio channels. With the convergence of media, the same content
is available as podcasts, for internet, mobile downloads etc. This business of content creation
holds huge potential for production houses that exclusively produce content for radio channels.
The need for differentiated content will become very evident as the radio industry matures and
consumers will demand for a break from the monotonous content. This holds very high revenue
potential for such production houses.
41 | P a g e
The other areas of operation include Marketing, Sales, Market Research and the rest of which
have been dealt under the vertical of communications in the previous section. This division is
the support function and the face of the company. It is extremely critical for the Marketing team
to perform well as the overall functioning of the station would depend on the insights this
division generates. Market research can be either done by the employees of the channel or can
be outsourced to other companies. The companies depend on the RAM ratings that are from an
external organization with respect to the channel.
Thus, the above are the main areas of operation for a radio channel where all the efforts of the
company are concentrated.
Areas of Operation
Content
Manage-
ment
Distri-
bution
Marke-
ting
42 | P a g e
Radio Advertisements:
Radio is still the king when it comes to getting your music. The best way for a new band to get
heard by the public and record label executions is over the airwaves.
Paradoxically, radio currently has only a 2.9 per cent share of the total advertising pie in India.
Globally, depending on country, radio has a 5 per cent to 12 per cent share of the advertising
cake. On the higher side are countries like the United States, with 13 per cent, Canada, with 12.7
per cent and Spain, with 9.1 per cent.
Companies that advertise on FM channels today such as Hindustan Lever (HLL), Dr Morepen,
Amul, Castrol, Santro, Britannia, Parle, DSP Merrill Lynch etc are dominating the advertising on
each one of the FM channels, be it Radio Mirchi, 92.7 Big FM, Red FM 93.5 or Radio City.
Today, 70 per cent of the advertising comes from big-budget, national advertisers and the
balance 30 per cent comes from retail. It is a known fact that retail advertising will grow because
radio presents the perfect advertising medium for local businesses in a local environment. But
national advertisers are also operational in the local market, implying that it is as important to
them as it is to a retail advertiser, if not more.
Nevertheless, it is undeniable that radio can be integral in exposing a new artist, new product or
services to new fans and taking a local market to a national level. Accordingly, it is extremely
difficult to obtain meaningful airplay. Putting it bluntly, successful radio promotion revolves
around making and managing relationships.
43 | P a g e
Radio promotion is an art that demands a certain style you may simply neither have nor desire to
cultivate. On top of that, it can take a great deal of time to make all the contacts and connections
that are required for successful radio promotion.
Advertising agencies that control the national picture will be slow to move on to radio for
creative reasons. They have people who love to make television commercials, but don't have
anybody who knows how radio works. Here, only about 2.9 per cent of the money spent by
advertisers goes to radio, and up till now, all of that went to ALL INDIA RADIO.
However, in revenue terms, money from advertising has gone up. Revenue from commercials on
AIR, including on Vividh Bharti and Primary Channel (including FM) rose from Rs 393 million
in 1990, to Rs 808.4 million in 2000, & Rs. 600 crores in 2002, representing a growth of about
7.5 per cent per annum.
A clear advantage that radio has is that it can easily target city-based audiences. This makes
sense if the advertiser, like a food chain that is opening an outlet in Mumbai, wants to target a
specific audience. In such cases, it does not make much sense to advertise on TV, and the print
medium is too expensive. Radio is the best bet for such small-scale promotions. It is also aptly
suited for local promotions, and once audiences can be targeted, it has tremendous potential to
eat into local mediums.
44 | P a g e
Customers of Radio Industry:
The main customers of radio are the people who listen to radio. There is a thin line between
customers and consumers of radio. There is no clear demarcation when a customer would
become a consumer and vice versa. Radio functions when mostly as a background media that
becomes a product for consumption when a person becomes a listener of the ongoing program in
the channel. On an average, research has proved that the highest listenership to radio is in the
morning and evening hours. After which is the night and early morning hours which attract
maximum listenership across different cities uniformly. The advertisement charges, that are
currently available for each of these channel is based on these peak hours. The rates however
change from city to city also. Metros like Mumbai and Delhi have higher advertisement rates
than a tier 2 city.
This brings us to the next important customer i.e. the advertiser. The advertiser charges based on
the listenership data for each show and the target group he wants to address. The money
advertisers spent on radio increased by about 15% in the year 2007. Though the money spent on
radio is very less, just bout one-tenth the ad revenues spent on TV, it was still a significant
number. What was significant was while the radio ad revenues doubled from the year 2004 the
ad revenues on TV just grew up by 1% in the same period. Another interesting revelation is that
the impact of the advertisement was higher if there were parallel campaigns in TV/print and in
radio than just in one media. This is called ad multiplier effect.
Third party monitoring is available for the advertisers to help them spend their money
judiciously on radio. Radio Ad-ex is the main external monitoring agent of all the advertising
spend all through the day in 4 metros across 13 channels. According to their reports:
? The maximum money for advertising is spent on radio for TV channel productions followed
by real estate property, FMCG products.
? Unilever is estimated spending the largest amount of money on advertising in radio.
? Local advertisers are prominent advertisers compared to national advertisers on radio.
45 | P a g e
Establishing Business Activities in Radio Industry:
To start an FM channel in India, there are several things which have to be kept in mind; the
prominent ones are as follows:
1. FM Frequency:
The process of obtaining frequency for FM broadcast. The investment for the bidding
process and the One Time Operating Fee to be paid for the license and the annual license fee
for retaining channel on air.
2. Music Royalties:
Since music is one of the mainstays of the radio channels, music royalties becomes one of the
expenses for a station. Broadcasting station will have to buy royalties from music companies
like T-Series, Saregama, and HMV etc to play them on air.
3. Infrastructure:
Broadcasting channel will need software for recording, programming and broadcasting.
Transmitter for broadcasting the frequency, servers to storing the recorded data, mikes,
headphones for recording programs, computers to operate on, office space for setting up the
station and transmitter etc are the basic requirements of a channel.
4. People:
The biggest asset of any radio channel is the people – Radio Jockeys, technicians, market
researchers etc. Radio Jockeys are the face of any channel; many channels are at times
identified by the radio jockeys and not the frequency or program. Hence it becomes essential
to recruit talented people for the posts.
46 | P a g e
Market Potential:
The radio industry holds huge potential for growth going by the present rates of growth. With
the addition of a couple of hundred stations to the existing numbers, the revenue is projected to
touch 13 billion by 2010. This would be a growth by five times in just a decade.
Year 2004 2005 2006 2007 2008 2009 2010
Rs. 2500 3000 4000 7000 8000 11500 13000
Investment and ROI:
Investment:
License:
50% of One Time Entry Fee has to be paid at the time of bidding for license; this is to ensure that
the companies bidding for license are serious about it. This license would be an investment for a
period of 10 years on part of the channel.
Studio:
One of the main investments would be in setting up hi definition technology studio for
broadcasting the shows. Hi-definition technology means extremely good sound quality both wile
recording and transmission devoid of any unwanted interruptions. It can support files of
different formats.
A radio station would need transmitters, codec?s, mixers, software etc to set up a studio. Many
of the companies outsource their equipment from USA. Digital Audio Broadcast that converts
the speech or music recorded in analog to digital code. This will enable reception of a particular
FM frequency without interference from external objects. Investment for technology to provide
47 | P a g e
radio via new media; new channels should invest in infrastructure to provide visual, mobile and
online radio. Provision for distributing the channels via DTH and can be prepared for the
introduction of IPTV that might change the dynamics of the game.
Return on Investment:
From Advertiser’s Point of View:
Return on Investment is very high for advertisers as ad rates are very low and so is ad avoidance
rate. Radio is the cheapest and effective medium of advertisement for advertisers.
From Channel’s Point of View:
It takes time for a radio channel to recover money invested on acquiring license, infrastructure,
music rights etc. The money has to be recovered through advertising mostly. The location of the
channel is very important as based on their location they can attract advertisers with high
spending power. This might prove as a hindrance to set up radio channels in tier 2 and rural
cities as recovering investment costs through advertising is a time consuming process.
Revenue generation has increased after the phase 2 reforms in the FM industry. Initially close to
50% of the revenues was spent on paying license fee. This has reduced to close to 5% for the
company which increased the profitability to around 53% from 8% during phase 1.
World over when the revenue from advertising is at 5% then it is considered to be in growth
phase and in mature phase if it is around 10-12%. In India this is around 3% which shows there
is lots of scope for growth.
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Issues and Problems:
Issue Effect
One frequency for on company
in a city.
This limitation does not give a company scope to
experiment with content. Starting up of niche channels
targeting only a particular segment in the market is a very
risky option. A handful of such channels exist in the group
of few hundred channels. If this rule is relaxed, emergence
of many niche channels in the same area by one operator
can be expected.
Radio listenership targeting Radio listenership targeting mechanisms are just evolving
along with the listeners. The market is in a very nascent
stage so evaluating the market is very tough and it will take
some time before parameters to evaluate the listenership
measure is established. Even the existing evaluation is
restricted to the metros and capital cities and that cannot be
extrapolated to other towns and tier 2 cities. A consistent
mechanism suiting all geographic and demographic
segments has to be developed.
Money doled out as music rights The money paid as music rights comes to an average of Rs.
5 million per station. Stations in smaller towns will not be
able to sustain themselves at this rate. This also means that
all channels end up playing the same kind of programs
bringing in monotony. There is an urgent need to
differentiate content to reduce prices, attract and maintain a
listenership base.
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Issue Effect
News and current affairs not
allowed
News and current affairs are not yet allowed on FM
channels. The industry is fighting t change this law as
the change of this law might break the monotony
caused by playing only Bollywood songs.
Competition from new media With increasing penetration of broadband, there is
considerable competition from online radio, podcasts
which are a threat to radio industry?s revenues.
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.
50 | P a g e
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.
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Five Force Analyses:
The five forces that shape industry competition are:
Bargaining Powers of Suppliers:
There is low bargaining power of radio players as there are many players in the industry. Again
it differs in each case. It depends on several factors, because every radio station is different in
their offering. So it does create its own demand. It also depends on listenership ratio of FM
station.
Rivalry Among
Existing
Competitors
Threat of New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitute
Products or
Services
Bargaining
Power of
Suppliers
52 | P a g e
As far as, Ahmedabad is concerned, there are mainly 6 players in the industry; 5 private players
and remaining 1 is All India Radio. The offering of them are more or less same. Therefore there
is a low bargaining power of radio players in Ahmedabad.
Bargaining Powers of Buyers:
Buyers have a high bargaining power, as there are many options available to them, if cost is a
constraint to them. Bargaining take place a lot in terms of rates of advertisements.
In Ahmedabad, the offering of the radio players are more or less same. Therefore buyers get
benefits out of them. If one player does not bargain properly or according to customers wish,
they may go to other radio player. In this way, the bargaining powers of buyers are high.
Threat of New Entrants:
There is very low possibility of new entrants as there is only one slot available to be sold, which
will be allocated by bidding. But, speculation is that, Reliance ADAG led Big FM is about to
close the deal. If Big FM will enter Ahmedabad, it will surely increase the competition and will
make it more competitive.
Threat of Substitutes:
All other forms of entertainment can be a threat to the radio industry.
? Television – New channel or new show are launched
? Mobile – Mobile with high technology provides internet radio or other features of internet
? Computer Games
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? Internet – In internet social media is increasing day by day
? Print Media – Many magazines like Femina, Business Standards etc provides tough
competition.
? Film Industry – India is at 2
nd
position in this industry in the world.
? Live Shows – Fashion shows or any brand promotion shows are increasing popularity day by
day.
Rivalry among Competitors:
There are many players in the state, so competition is fierce among them. There is healthy
rivalry among all competitors, as only revenue generation element in radio industry is slot
selling, so all players are competing to get as many clients as they can on their FM.
Particularly in Ahmedabad, there are 5 private players. Therefore rivalry among them,
particularly for advertising revenue is increasing.
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SWOT Analyses:
No. Strengths Weaknesses
1. Recently, the government has agreed upon
revenue-sharing model, which is 4 % for
the growth of the radio stations. So that
they can develop themselves well because
this industry is still in an introduction
stage.
One of the major weaknesses of Radio is
that there is very less differentiation in the
programs that are aired. Most of the
stations plays much of the music that is
played consist of Hindi Film songs, and
therefore it is difficult to differentiate
between the programs of the different
channels.
2. The success of private FM stations, and
reveals that radio listenership habits have
changed considerably; not only are
listeners tuning into it more often but also
sticking to radio for longer hours
everyday.
Fragmented Audience - the large number
of the audience in India is fragmented in
various remote places. And therefore, the
percentage of listener tuned to anyone
station is likely very small.
3. The advertisers, who would depend on
word-of-mouth, pamphlets, brochures or
ads in local supplements of newspapers,
are welcoming the opportunity.
No proper research available - research is
very important for any advertising
segment. Research is the main base to
attract client and get more revenue. But, in
India there is no proper research is
available. Many stations are conducting
their own research which can be biased.
4. Radio is considered as a background
medium, because people can listen to
radio anytime and anywhere they want. It
is also a free medium.
Radio-only nature of radio communication
is a tremendous creative compromise. An
advertiser whose product depends on
demonstration or visual impact is at a loss
when it comes to radio. And like its radio
message creates a fleeting impression that
is often gone in an instant. Many
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advertisers think that without strong visual
brand identification the medium can play
little or no role in their advertising plans.
5. 90% of India has access to radio which is
unmatched by any other media.
Increase in listenership numbers but no
increase in ad revenue. This is the
situation that every radio channel is
facing.
6. Radio also reaches to uneducated village
folk who do not read print publications.
At the places where the literacy rates are
low where people hardly read newspapers
and radio is the only medium that they can
understand. They can?t afford a TV set.
Therefore radio is more popular.
Short commercials.
7. Radio is the least cost medium and it
helps to reach mass audience with various
backgrounds. Radio offers its reach
frequency and selectivity at one of the
lowest costs per thousand and radio
production is relatively inexpensive.
8. Radio is considered as a medium where
the “Proximity to purchase” is very high.
9. Radio is a complement to another media.
Therefore, other media or the advertisers
or agency can use this medium for brand
recall.
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No. Opportunities Threats
1. Getting copyright licenses from the
government for running mega events
which are aired on the AIR radio station
and have been restricted to be aired on
other private stations.
The biggest threat to private radio industry
players is ALL INDIA RADIO. AIR is the
biggest player in India because of its reach,
low charges, government channel etc…
2. Launching a radio station with 24-hour
news channel.
Because of the new government policies
there will be more number of stations and
then competition will also increase. This is
one of the biggest threats it faces. With no
particular differentiation in the music. So,
there is a fear of losing its brand loyalty.
3. Tie-ups with road transport or railway
authority for playing the FM in train and
in bus.
4. The launch of Private Radio FM has
managed to create a set of „New
Listeners? for the medium.
5. The new radio stations which will come
in future they can have venture with the
college or university campuses. And can
play their station which will exclusively
provide with the information relating to
that university/college campus.
6. With the coming of the many more new
players in the radio industry each
channels can position themselves quite
different from others, like, if some station
is targeting the health conscious people
then their programming strategy will
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vary accordingly. And then it is easier for
the advertisers also to decide on which
channel to advertise.
7. Allowing private FM players to start
news and current affairs programs.
8. One has to constantly innovate, and that
is the challenge. Brand building is thus
much more difficult. At the same time,
we are very bullish, and gung-ho about
this whole enterprise.
9. Leaves huge scope for innovation in local
market.
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PESTEL ANALYSIS
There are many factors in the macro-environment that will effect the decisions of the managers
of any organization. Tax changes, new laws, trade barriers, demographic change and government
policy changes are all examples of macro change. To help analyze these factors managers can
categories them using the PESTEL model. This classification distinguishes between:
Political factors:
These refer to government policy such as the degree of intervention in the economy. What goods
and services does a government want to provide? To what extent does it believe in subsidising
firms? What are its priorities in terms of business support? Political decisions can impact on
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many vital areas for business such as the education of the workforce, the health of the nation and
the quality of the infrastructure of the economy such as the road and rail system.
For radio industry political factors are:
? To enter in the industry, high time entry fee has to be given.
? Up to 20 per cent FDI is allowed in Radio Industry subject to an approval from Foreign
Investment Promotion Board (FIPB) in addition to the guidelines notified by Ministry of
Information and Broadcasting.
? Up to 15% annual hike in the license fee.
? Only 10 year of license is valid.
Economic factors:
These include interest rates, taxation changes, economic growth, inflation and exchange rates. As
you will see throughout the "Foundations of Economics" book economic change can have a
major impact on a firm's behaviour.
For radio industry economic factors are:
? RJs are mainly attracted by package that has been offered to them by competitors.
? The employees of radio industry are mainly attracted by package that has been offered to
them by competitors.
Social factors:
Changes in social trends can impact on the demand for a firm's products and the availability and
willingness of individuals to work. In the UK, for example, the population has been ageing. This
has increased the costs for firms who are committed to pension payments for their employees
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because their staff is living longer. It also means some firms such as Ads have started to recruit
older employees to tap into this growing labour pool. The ageing population also has impact on
demand: for example, demand for sheltered accommodation and medicines have increased
whereas demand for toys is falling.
For radio industry social factors are:
? Demographic factors – there are different people with different age group.
? People have different likings with other people.
? TV is a family medium, while radio is a personal medium for entertainment.
Technological factors:
New technologies create new products and new processes. MP3 players, computer games, online
gambling and high definition TVs are all new markets created by technological advances. Online
shopping, bar coding and computer aided design are all improvements to the way we do business
as a result of better technology. Technology can reduce costs, improve quality and lead to
innovation. These developments can benefit consumers as well as the organisations providing the
products.
For radio industry, technological factors are:
? Internet radio is introduced.
? Modern equipment and highly technical transmitters are used.
Environmental factors:
Environmental factors include the weather and climate change. Changes in temperature can
impact on many industries including farming, tourism and insurance. With major climate
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changes occurring due to global warming and with greater environmental awareness this external
factor is becoming a significant issue for firms to consider. The growing desire to protect the
environment is having an impact on many industries such as the travel and transportation
industries (for example, more taxes being placed on air travel and the success of hybrid cars) and
the general move towards more environmentally friendly products and processes is affecting
demand patterns and creating business opportunities.
Legal factors:
These are related to the legal environment in which firms operate. In recent years in the UK there
have been many significant legal changes that have affected firms' behaviour. The introduction
of age discrimination and disability discrimination legislation, an increase in the minimum wage
and greater requirements for firms to recycle are examples of relatively recent laws that affect an
organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and
procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers
buying the good or using the service).
For radio industry, legal factors are:
? RJs are banned to speak on political and legal issues on air.
? No news or updates are allowed for private radio channel.
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Radio Stations in Ahmedabad:
Name Frequency Tag Line
Radio City 91.1 Whatte Fun
Red FM 93.5 Bajaate Raho!
My FM 94.3 Jiyo Dil Se!
Radio One 95.0 Station for the Fata-fat Generation
Radio Mirchi 98.3 It?s hot!
Radio City:
? Image: City Radio
? Target Group: 25-65
? Plays all kind of Hindi songs
? Plays songs from 1975 till date
? Not able to position well in market
? Needs to come with new ideas
Red FM:
? Image: Fun and Masti
? Target Group: 18-40
? Plays new Hindi songs and Songs of 90?s
? Plays songs from 1990 till date
? Providing tough competition to existing customers
? Coming with new ideas every time
My FM:
? Image: Personal FM
? Target group: 15-45
? Plays Hindi, English and Gujarati songs
? Plays songs from 1965 till date
? Wants to connect emotionally
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Radio One:
? Image: Fatafat Gen – X
? Target Group: 18-25
? Plays all types of Hindi songs
? Popular among youth
? Plays songs from 1975 till date
Radio Mirchi:
? Image: Hot
? Target Group: 18-60
? Oldest player
? Loyal listeners
? Plays all kind of Hindi songs
? RJ Dhwanit works as brand
? Plays songs from 1980 till date
Number of FM stations in India:
Radio Stations Stations (All over
India)
BIG FM 44
Red FM 35
Radio Mirchi 32
Radio City 20
My FM 17
Radio One 7
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SOUTH ASIA FM LIMITED
Introduction:
South Asia FM Ltd. is the owner of the Sun TV, Gemini TV, S FM and Red FM. Therefore the
structure of the Red FM is highly inspired by the South Asia FM Ltd. Red FM was earlier
known as S FM in entire country. But now in South only it is known as S FM and rest of the
country it is known by Red Fm.
Sun Network, India's largest media conglomerate has power packed Twenty
TV Channels with the reach of more than 95 million households in India. Sun
Network's channels can be viewed in 27 countries including U.S.A, Canada,
Europe, Singapore, Malaysia, Sri Lanka, South Africa, Australia and New
Zealand. It also has Forty Five FM Radio Stations, Two Daily News Papers -
Dinakaran the No.1 morning tamil daily news paper with sales of over 1.1
million copies a day, Tamil Murasu No.1 evening tamil daily, Four
Magazines, Sun Direct one of the largest DTH (Direct To Home Satellite TV service) service
provider in India having more than 4 million subscribers and Sun Pictures the film division of
Sun Network which produces / releases at least 8 movies every year.
The response to their programs and the viewership of our news has been phenomenal. The fact
that they touch so many hearts gives us great pleasure. Every single South Indian channel that
boasts of a No. 1 slot among its viewers belongs to the Sun Network. Millions of people all over
the world watch a channel of Sun Network. With every programme a sell-out, every single
transmission digitized, every serial a hit, for millions of viewers all over the world every day is
indeed a Sunday. Sun Network believes in giving you wholesome fare. Be it news or
entertainment, we are there first. If it is happening South of Vindhyas, its on Sun Network. And
you are a part of it.
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Awards:
As South Asia FM Ltd. is the owner of the Red FM, awards won by them will provide great
impact on Red FM.
? CNBC “Business Excellence Award” in 2005 – Kalanithi Maran, CMD, Sun Network
? Outstanding Businessman Award in the Entertainment and Information Sector in 2004 –
Kalanithi Maran, CMD, Sun Network
? World?s Young Achiever For Creativity in 1999 – Kalanithi Maran, CMD, Sun Network
? India?s Best Entrepreneur Award in 1999 – Kalanithi Maran, CMD, Sun Network
? Indian television Academy award for the Best Tamil TV Channel for the year 2001 – Sun TV
Network
? India Television Academy award for the Best Malayalam TV Channel for year 2001 – Surya
TV
? Indian Television Academy award for the best Kannada TV Channel for the year 2001 –
Udaya TV
? Indian Television Academy award for the best Telugu TV Channel for the year 2001 –
Gemini TV
Sun TV Channels:
Thanks to the invention of television and the increasing popularity of it, that has made our homes
a source of comfort as well as a source of knowledge. So much, for the effect created by the
small screen. Indians, especially the Southerners, - who represent a byword for „spice?, have
been the immediate ones to be taken in by the storm created by the small screen.
Being the first of its kind in Tamilnadu, Sun TV – as a regional channel created ripples in its
move. The ripples developed in to waves, continue to run endlessly – with the Sun TV ruling the
roost amongst many other competing satellite television channels.
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The Sun Network which believes in providing a right proportion of quality and quantity – has
been the one reason behind its tremendous success. Originally begun as a Tamil Satellite
Channel – the network has engulfed other South Indian states too, with an expansion of regional
channels in other languages including Telugu, Malayalam and Kannada.
The channels being – Sun TV, K TV, Sun Music, Sun News, Chutti TV, Adithya, Surya TV,
Kiran TV, Gemini TV, Teja TV, Gemini News, Gemini Music, Navvulu TV, Kushi TV, Udaya
TV, Ushe TV, Udaya 2, Udaya Movies, Udaya Varthegalu and Chintu TV. Besides channels
dedicated to programs with the main focus on entertainment, the News Channels is entirely
devoted to informative sources. The Sun Network also has the pride of owing an earth station
which enables the network to beam its programs directly to the satellite.
Red FM Radio:
“It has become our nature to occupy the first slot in whatever we do.” Sun Network?s foray into
FM radio is no exception either. Tamil?s first private FM stations – Suryan FM – from Chennai,
Coimbatore and Tirunelveli are way ahead to its competitors. Independent audience research
conducted by internationally renowned agency A. C. Nielson puts Suryan FM much beyond
competition.
The top slot is a result of a carefully planned thoroughly enjoyable, round – the – clock,
wholesome entertainment oriented package. The interactive element will encourage everyone to
make their own broadcasting. There will be substantial localization of content to retain the
regional flavor. The Frequency Modulation broadcasting will be through state – of – art, high
power transmitters to provide fine aural output. In order to maintain tonal fidelity and sound
clarity, Suryan FM has bid good bye to playing tapes and compact discs. The entire program
will be digitized and broadcast from a sensitive computer server, eliminating sound impurities
67 | P a g e
and disturbances totally. The reach of Suryan FM stations is more than a 120 Km radius thereby
providing high quality entertainment for most of the neighboring districts.
Organization Structure of Red FM:
Station Head
Programming
Department
Sales
Department
Technical
Department
Programming
Head
Producers,
Copywriter &
Sound
Engineer
RJs
Sales
Head
Sales
Executives
Technical
Head
Maintenance
&
Computer
Engineer
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Advertisement on Red FM:
The marketing department is wholly responsible for the advertisement sales of Red FM stations.
With its team of dedicated professionals, it is today one of the highly appreciated professional
marketing unit among radio stations. Apart from offering the available advertisement time in the
most effective way, it offers the best follow up service.
The deals, that are made, are mutually beneficial and uniform. It functions with the motto –
professionalism, efficiency and dedicated service.
Rate Card & Packages
Starting Time
Ending Time
RODP rates
Rate
07:00 am
11:00 am
200
Denotes 10 sec Rate
11:00 am
17:00 pm
100
Denotes 10 sec Rate
17:00 pm
22:00 pm
200
Denotes 10 sec Rate
22:00 pm
07:00 am
100
Denotes 10 sec Rate
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Shows on Red FM:
Monday to Friday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show.
MORNING NO 1
Timing : 07:00 hrs to 10:00 hrs
RJ Name : Harshil & Rocky
Description : Breakfast show. The show voices the
opinion of the city and bajaos every local
and national issue. The show takes up
issues such as the police helpline not being
answered and goes down to resolving a
single individual's parking problem.
BAJATEY RAHO EXPRESS
Timing : 10:00 hrs to 17:00 hrs
RJ Name : Devanshi & Riya
Description : One consolidated band with more songs
and less links. Different jocks come in and
add spice to the show. This show is divided
into 3 subshows as follows
1. 10 AM - 12 PM : Show based on
Bollywood + Television
2. 12 PM - 2 PM : Request show
3. 2 PM - 5 PM : Campus based show
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GJ 935
Timing : 17:00 hrs to 20:00 hrs
RJ Name : Aditi
Description : Drive time show. This show is all about
current affairs and the jock gives funny
takes on it
SMS
Timing : 20:00 hrs to 21:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot.
ZOYA NAUGHTY NIGHTS
Timing : 21:00 hrs to 23:00 hrs
RJ Name : Zoya
Description :
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Saturday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show.
MORNING NO 1
Timing : 07:00 hrs to 10:00 hrs
RJ Name : Harshil & Rocky
Description : Breakfast show. The show voices the
opinion of the city and bajaos every local
and national issue. The show takes up
issues such as the police helpline not being
answered and goes down to resolving a
single individual's parking problem.
BAJATEY RAHO EXPRESS
Timing : 10:00 hrs to 17:00 hrs
RJ Name : Devanshi & Riya
Description : One consolidated band with more songs
and less links. Different jocks come in and
add spice to the show. This show is divided
into 3 subshows as follows
1. 10 AM - 12 PM : Show based on
Bollywood + Television
2. 12 PM - 2 PM : Request show
3. 2 PM - 5 PM : Campus based show
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GJ 935
Timing : 17:00 hrs to 20:00 hrs
RJ Name : Aditi
Description : Drive time show. This show is all about
current affairs and the jock gives funny
takes on it
SMS
Timing : 20:00 hrs to 21:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot.
TODU NIGHT
Timing : 21:00 hrs to 23:00 hrs
RJ Name :
Description : DJ show. 9 to 10 mins blocks of non-stop
remix songs and other hottest hits.
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Sunday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show
SUPERHITS 30
Timing : 08:00 hrs to 11:00 hrs
RJ Name :
Description : 30 hottest hits of the day
SACHIN & PINKU SHOW
Timing : 11:00 hrs to 13:00 hrs
RJ Name : Sachin & Pinku
Description : A complete brand of humour. RJs
comments on various VIPs of the society
like Police wallas, Bollywood actors,
Cricketers etc.,
BAAP KA RAAJ
Timing : 12:00 hrs to 14:00 hrs
RJ Name : Devanshi
Description : Listener's show. Jock takes calls from
listeners and dedicates their favourite song
to their loved ones
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RED FM SUPERSTAR
Timing : 14:00 hrs to 15:00 hrs
RJ Name : Harshil
Description : City's local celebrities would be profiled
and asked funny questions and funny
games like rapid fire would be played
SUPERHITS 30
Timing : 15:00 hrs to 18:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot
MALISHKA CELEB SHOW
Timing : 18:00 hrs to 20:00 hrs
RJ Name : Malishka
Description : Bollywood celebrities would be profiled in
this show
RED REWIND
Timing : 20:00 hrs to 23:00 hrs
RJ Name : Riya
Description :
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SWOT Analysis for Red FM:
This is an organization specific analysis, which specifies the core Strengths, Weaknesses,
Opportunities and Threats, of a particular organization, with respect to the industry structure.
Strengths:
Taking Red FM in to consideration, the enthusiasm of the target audience is its main strength. It
only caters people coming within the age group of 18 to 40 years. The positioning of the channel
also justifies the same. All day long, only the newest songs are aired on Radio One. Positioned
as “Bajaate Raho”.
Radio is not trying to be everything for everyone, but it focuses on youth only. Red FM is very
clear in its positioning, which helps it in developing programs, campaigns and other activities
which supports its positioning and helps in serving to the target segment and increases its
popularity.
Weaknesses:
Red FM is still present in only 3 cities in the state, Ahmedabad, Baroda and Rajkot. So many
advertisers, who want to run their campaign simultaneously in multiple cities, would shift to
other FM station, which are having such presence.
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Opportunities:
There is no bar in creating creativity.
There is a huge scope of opportunities in gaining more advertising contracts. As, now majority
of product or services are delivered youth in mind, as youth is a major component, when it
comes to spending. Its unique positioning has made it open to opportunities from many
companies which are having similar positioning, i.e. youth.
Threats:
As far as radio is concerned, threat could be of two types:
Threat of competitors:
There are as many as 5 other FM channels aired in current scenario. And taking radio as a
medium, the switching behavior of the listeners is again a big threat. In radio, the listeners
always have a motivation to switch the station.
Threat of substitutes:
The advertising is the only source of revenues in radio industry. Hence, the other mediums like
newspapers, print media, television, etc. are potential, as well as direct threats to Red FM,
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Listening to a Radio:
Now a days radio has become new way of entertainment. Before a decade, FM radio was gone
out of the market. But after the privatization of radio channels and therefore introduction of
private players has increase the listenership of radio channels. Radio is also considered as a
good advertising medium.
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India. The estimated worth of the industry was Rs 3
billion in 2005 and the spiraling growth is predicted to make the industry worth Rs. 12 billion
with almost three times the present number of FM stations.
Listening to Radio
Yes 149 99%
No 1 1%
Yes
99%
No
1%
Listening to Radio
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From above pie chart, we can observe that only 1 respondent says that he/she doesn?t listen to a
radio out of 150 samples. That means that 99% of respondents agrees that they listen to the radio
and only 1% respondent say that he/she does not listen to the radio.
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Preference of Radio Channel:
In Ahmedabad, there are total 8 radio channels are prevailing. Those channels are Micavaani,
Radio City, Red FM, My FM, Radio One, All India Radio, Radio Mirchi, Gyanvani. Among
this, Radio City, Red FM, My FM, Radio One, and Radio Mirchi are private channels.
Micavaani?s FM frequency is dedicated to MICA College, which has started its private radio
channel. Therefore respondents have many choices regarding to preference of listening any
radio channel.
Preference of Radio Channel
Selected Not Selected
Micavaani 1 148
Radio City 71 78
Red FM 105 44
My FM 61 88
Radio One 74 75
All India Radio 8 141
Radio Mirchi 93 56
Gyanvani 3 146
0
20
40
60
80
100
120
140
160
1
71
105
61
74
8
93
3
148
78
44
88
75
141
56
146
Preference of Radio Channel
Selected
Not Selected
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Above chart shows that most of respondents prefer Red FM and Radio Mirchi. Radio Mirchi is
oldest player in this private sector. In this way it has got advantage of first mover. As researcher
has chosen youth respondents between age group of 15 to 40 years, preference towards All India
Radio and Gyanvani is very less. In other way around, after privatization and Phase 1 and Phase
2 policy for radio industry, preference towards these radio channel has become very less.
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Reasons for Listening Radio:
TV is a family medium, while radio is personalized medium. People can listen to radio at any
time as background music provider. Radio also provides peaceful atmosphere and considered as
a time pass medium for any people. Radio also provides relaxation and some information. In
this way we may say that radio reduces loneliness from life of the people.
Background Music Provider:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 11 5.8 7.4 7.4
2
nd
preferable 29 15.3 19.5 26.8
3rd best preferable 24 12.6 16.1 43.0
4th best preferable 48 25.3 32.2 75.2
5th preferable 15 7.9 10.1 85.2
least preferable 22 11.6 14.8 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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7.33% respondents believe that radio is a most preferable background music provider. 19.33%
respondents believe that radio is 3
rd
preferable tool for background music provider. While 32%
respondents believe that radio is 4
th
preferable tool for background music provider. 10%
respondents react as it is less preferable reason for listening a radio. 14.67% people believe that
it is a least important reason for listening a radio. Researcher has found that mostly people don?t
want background music during serious work. They can allow background music during simple
task like driving, cooking etc during informal communication with respondents.
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Peaceful Atmosphere:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 22 11.6 14.8 14.8
2
nd
preferable 16 8.4 10.7 25.5
3rd preferable 25 13.2 16.8 42.3
4th preferable 40 21.1 26.8 69.1
5
th
preferable 32 16.8 21.5 90.6
least preferable 14 7.4 9.4 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From sample surveyed, the researcher can found that 14.67% respondents believe that radio is a
most preferable tool for providing peaceful atmosphere. 10.67% respondents believe that radio
is a preferable tool for providing peaceful atmosphere. While almost 27% people believe that
radio as a tool for providing peaceful atmosphere.
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Considered as a time pass:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 37 19.5 24.8 24.8
2
nd
preferable 26 13.7 17.4 42.3
3
rd
preferable 24 12.6 16.1 58.4
4th preferalbe 17 8.9 11.4 69.8
5
th
preferable 30 15.8 20.1 89.9
least preferable 15 7.9 10.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the sample surveyed, the researcher has found that almost 25% respondents mostly
preferred radio as time pass medium. While 20% respondents believe that radio is a less
preferable medium for time pass. From above chart, the researcher has found that there is not
much difference between 2
nd
and 3
rd
preference towards this tool.
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Provides Relaxation:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 48 25.3 32.2 32.2
2
nd
preferable 32 16.8 21.5 53.7
3rd preferable 23 12.1 15.4 69.1
4th preferable 18 9.5 12.1 81.2
5th preferable 16 8.4 10.7 91.9
least preferable 12 6.3 8.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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According to the survey, the researcher has found that 32% respondents believe that radio is a
most preferable tool for providing relaxation. While 21.33% respondents believe that radio is 2
nd
preferable tool for providing relaxation. 15.33% respondents believe that radio is a 3
rd
preferable
tool for providing relaxation. 4
th
preference, less preference and least preference toward radio as
relaxation provider is accordingly 12%, 10.67% and 8%.
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Provides Information:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 11 5.8 7.4 7.4
2
nd
preferable 27 14.2 18.1 25.5
3rd preferable 31 16.3 20.8 46.3
4th preferable 18 9.5 12.1 58.4
5
th
preferable 35 18.4 23.5 81.9
least preferable 27 14.2 18.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the survey, the researcher has found that only 7.4% respondents believe that their highly
preference towards listening radio due to it is providing information. While 18.1% respondents
secondly prefers radio for listening as it is providing information. 23.5% respondents say that
they don?t think that the main reason for listening radio is that it is providing information. In
fact, they believe that it is the less preferable reason for listening to a radio.
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No loneliness:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 20 10.5 13.4 13.4
2
nd
preferable 21 11.1 14.1 27.5
3rd best preferable 22 11.6 14.8 42.3
4th best preferable 8 4.2 5.4 47.7
5th preferable 21 11.1 14.1 61.7
least preferable 57 30.0 38.3 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the sample surveyed, the researcher has found that radio is tool that provides no loneliness
is the most preferable reason for only 13.4% respondents. While it is the least preferable reason
for listening to the radio for 38.3% respondents.
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Provides background music
Peaceful atmosphere
Considered as a timepass
Provides relaxation
Provides information
No loneliness
3.62
3.58
3.15
2.72
3.68
4.07
Mean Value
R
e
a
s
o
n
s
Reasons for Listening Radio
Reasons for Listening Radio Mean value
Provides background music 3.62
Peaceful atmosphere 3.58
Considered as a time pass 3.15
Provides relaxation 2.72
Provides information 3.68
No loneliness 4.07
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According to the chart and table, the researcher can conclude that the most preferable reason for
listening to a radio is that the radio is providing relaxation in this competitive era because its
mean value is lowest compare to other criteria. The second best preferable reason is it is
considered as a time pass for most of the listeners. According to the survey, respondents listen to
the radio due to radio is providing peaceful atmosphere. Radio also provides background music
while doing other works and it is the forth preferable reason. The least two reasons for listening
to the radio are that it provides information and provides loneliness.
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Time Duration for Listening to the Radio:
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India.
Old media don?t? die! They just bounce back in new avatars. Therefore now people listen to the
radio for become relax.
Time Duration
Less than 1 hour 72
1-3 hours 51
3-5 hours 18
More than 5 hours 8
48%
34%
12%
6%
Time Duration
Less than 1 hour 1-3 hours 3-5 hours More than 5 hours
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From the conducted survey, the researcher has come to know that 48% respondents listen to the
radio for only less than 1 hour. While 34% respondents listen to the radio for one to three hours
in a day. 12% of the respondents agree on the time duration of three to five hours. Only 6% of
respondents listen to the radio for more than five hours. As per the informal communication of
the researcher with respondents, she came to know that people can not listen to the radio for
longer duration because it provides boredom if there is no work to do and only listening to the
radio.
Time Duration With Regards To Profession:
Profession
Total
service business professional homemaker student self employed
>1hour 15 7 12 10 20 8 72
1-3hour 5 5 4 5 24 8 51
3-5hour 0 4 3 3 6 2 18
The research is undertaken to find out the preferences of youth for FM music. Therefore the researcher will be able to know about the youths’ preferences regarding different types of music, different programs and some new upcoming trends in radio industry.
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RESEARCH METHODOLOGY
Objectives
Primary objectives:
? To measure Radio Listenership Habits among the Youth.
? To develop new music selection and programming strategies for Red FM.
Secondary objective:
? To analyze Five Force Model and PEST Analysis for Radio Industry.
? To analyze workings of FM radio stations.
? To analyze organization structure of Red FM
Scope of research
The research is undertaken to find out the preferences of youth for FM music. Therefore the
researcher will be able to know about the youths? preferences regarding different types of music,
different programs and some new upcoming trends in radio industry.
Researcher will also undertake study to understand what activities Red FM does to promote its
brand or to penetrate to the target segment. It will undertake study of the promotional activities
undertaken by Red FM.
Research Design
Descriptive Research:
? Involves gathering data that describe events and then organizes, tabulates, depicts, and
describes the data.
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? Uses description as a tool to organize data into patterns that emerge during analysis.
? Often uses visual aids such as graphs and charts to aid the reader
Description Research takes a “what is” approach:
? Refers to the nature of the research question
? The design of the research
? The way that data will be analyzed for the topic that will be researched
There are four methods of data collection under descriptive research. They are:
? Surveys
? Interviews
? Observation
The methods used for this research would be mainly doing survey with the help of questionnaire
and taking informal interview of people while doing survey of people.
Sources of Data
Primary and secondary both type of data will be used for the study.
Primary Research:
Primary research will be done through survey of the youth.
Secondary Research:
Secondary data will be collected from radio channel itself, magazines related to the industry,
newspapers and internet.
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Sampling Design Process
Target Population:
Target population is youth of the city Ahmedabad between age group of 18 to 40.
Sampling Technique: Convenience Sampling
The researcher performed a youth audit. Researcher visited majority of collages, malls and other
such places in Ahmedabad. From there, researcher has collected the contact details of these
samples and thus formed database. Thus it was a convenience sampling.
Sample Size: 150
As the survey is for youth only, 150 sample size has been taken by the researcher.
Data Analysis
The researcher will use inferential statistics (through SPSS) in order to draw a conclusion. Result
of the study will be put in tables and graphs for easy understanding of the findings of the
research.
Limitations of the Study
Personal Bias:
People may have personal bias towards particular investment option so they may not give correct
information and due to which conclusion may be derived.
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Time Limit:
The time duration of the research is short that?s why the information is not covered fully.
Area:
The area was limited to the part of Ahmedabad only.
Sample Size:
The last limitation is Sample size, taken by us is of 150 only; due to which we may not get the
proper results.
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MEDIA AND ENTERTAINMENT INDUSTRY
Introduction:
Media and Entertainment is one of the most booming sectors of the Indian economy. The sector
is rapidly evolving and has a tremendous untapped potential stored in it. The Indian Media and
Entertainment industry stood at Rs. 43,700 crores in the year 2009 and is expected to grow at an
annual rate of 19% till the year 2010.
Overview:
The Media and Entertainment industry is on of the most booming sectors in India. The global
entertainment industry is projected to reach US$ 1.8 trillion by 2015. Asian region expected to
play a central role in it, with India poised to contribute about US$ 200 billion i.e. a sizable chunk
of the global industry.
According to the annual edition of the FICCI, the size of the Indian Media and Entertainment
industry in the year 2009 was Rs. 43,700 crore. The Indian Media and Entertainment industry
grew from Rs. 35,300 crores to Rs. 43,700 crores during the year 2008-09. The sector has
immense potential stored in it. The Indian Media and Entertainment industry is expected to grow
at an annual growth rate of 19% to reach Rs. 83,740 crore by 2010.
The Indian Media and Entertainment industry, with the prominent segments being films,
television, and music has earned high revenues in the recent past. The Indian Media and
Entertainment industry has risen to the threshold of a large global market. The year 2005 saw
the entry of new players across all the segments of the industry including Reliance.
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The Indian Media and Entertainment industry can be categorized as follows:
? Film Entertainment
? Television
? Music
? Radio
Technology has changed the face of entertainment today. The ongoing change in technology,
products and distribution channels has created significant opportunities in the industry for growth
and development. The revolution in the information technology has resulted in the emergence of
cable wires, networks and most importantly the “internet” which has revolutionized the Media
and Entertainment industry.
The emergence of multiplexes and entertainment malls has redefined the entertainment industry.
This booming sector in India has also encouraged and many foreign investors who are making
efforts to tap the Indian market.
Sector Outlook:
The Media and Entertainment is on of the fastest growing sectors in India. The Media and
Entertainment is on of the fastest growing sectors in India. The increasing rate of urbanization,
the penetration of television and radio industry in the rural areas with the help of the technology
and the rising levels of incomes of the people in India has facilitated the growth rate of Media
and Entertainment industry in India. The Indian Media and Entertainment industry stands at the
value of Rs. 43,700 crore currently and is expected to grow at an annual growth rate of 19% to
reach Rs. 83,740 crore by 2010. The Indian economy is growing at a fast rate and the Media and
Entertainment industry is expected to benefit significantly from it.
7 | P a g e
The industry witnessed a recovery in the last quarter of the year and this is expected to continue
going forward. 2010 is expected to see the industry coming out of the shackles of the slowdown
and ad spends increasing. Incidentally, the subscription revenues of TV and print grew by 8.5pc
in 2009 to reach INR 241 billion.
Some sectors were impacted more than the others like OOH, Films and Radio, which registered a
negative growth during the year.
In 2010, they are expected to recover somewhat with a moderate growth rate. Last year print
showed a very moderate growth, whereas TV industry showed a good growth rate. Music,
Internet, Gaming and Animation brought reasons to cheer for the industry with their growth rates
touching double digits, albeit on a smaller base.
Advertising spends grew at CAGR of 10% in the past three years with almost flat growth in
2009. Going forward, it is expected to exhibit a robust growth rate CAGR of 14% over the next
5 years. Potential upsides could take this higher.
Growing potential of the regional markets, penetration of newer digital TV distribution
platforms, increasing competition, innovation across product, processes, marketing and
distribution models and growing importance of pay audiences were some of the key highlights of
the previous year.
However, it was DTH which proved to be a very successful medium and helped in increasing the
pay TV subscriber base even during challenging market conditions. IPL as a sports property has
grown from strength to strength and is here to stay with advertising revenue growth of 80pc to
reach Rs. 4.5 billion in 2010.
8 | P a g e
Commenting on the highlights of the report, Dr. Amit Mitra, Secretary General, FICCI said,
“The media and entertainment industry represents the face of consumers in India. It is a part of
our daily life and touches the maximum number of people. Despite the challenging last year, the
potential of the industry to perhaps grow beyond 13 % per annum over the next few years.”
Rajesh Jain, Head Media and Entertainment, KPMG in india said, “The year 2009 saw Media
and Entertainment industry growing through a tough phase as advertising revenues were
impacted in line with the challenging economic scenario. However, the subscription revenues
continued to grow.
Industry players looked at sustainable cost optimization and sought means to better connect with
their customers. The untapped potential for growth in media reach, impact of digitization and
convergence, better consumer understanding, sustained efforts in innovation, and enhanced
penetration of regional markets all augur well for the industry.”
The projected 13% growth rate per annum for the sector for next 5 years will be driven on the
back of factors like favorable demographics, expected recovery in GDP growth rate, strong long
term fundamentals of the Indian economy, expected rise in advertising to GDP ratio compared to
developed economies and increasing media penetration.
Given the industry?s changing landscape and emerging challenges, the focus of industry players
too is changing; with a stronger focus on profitability. Hence, media companies are increasingly
concentrating on cost optimization, strengthening existing operations and processes, talent and
human capital management, innovation and assessing options for growth through consolidation.
9 | P a g e
Factors like Digitization, Regionalization, Convergence of new media etc are some of the trends
in the industry and are expected to drive growth going forward.
Emerging Trends:
1. New distribution channels:
The latest channel through which the consumers are obtaining entertainment is the mobile
phone downloading movies clips, ringtones etc. Internet is also fast emerging as a widely
used distribution channel.
The two main trends that have been observed during the last year are:
? Diversification by media companies
? Increased foreign investment
2. Convergence:
In the future, convergence is expected to have a significant impact on the growth of Media
and Entertainment industry. Convergence can be defined as changing the way consumers
consume content and the manner content is delivered to consumers.
“In television, we expect the balance of power to shift in favor of broadcasters with the
adoption of alternative distribution platforms such as DTH (direct-to-home), CAS
(conditional access system), and IPTV (internet protocol television)”, said Mr. Narasimhan,
Head, Crisil Research.
10 | P a g e
The process of convergence is facilitated and accelerated by the rapid technological advances
and the broadband throughout the world. Convergence is expected to change the traditional
industry structures, the existing business models and distribution mechanisms.
3. Capitalization:
In order to capitalize on this fast growth ahead, companies are making large-scale
investments in terms of infrastructure. For instance, the Modi Family has invested around Rs
1,500.0 million towards the construction of multiplexes that can screen around 16 films
simultaneously. At the same time, majors such as Zee Telefilms and Eenadu TV are
expanding their horizons to other markets as well.
4. Increasing Domestic Entertainment:
Some of the major fast growing segments in the domestic industry include the music, cable
and satellite advertising, infrastructure, exports, animation and FM. The domestic music
industry was estimated at around Rs 17,000.0 million in the year 1999 and is projected to
grow to around Rs 30,000.0 million by the end of the current year. The export segment is
also expected to increase from around Rs 4,000.0 million to around Rs 10,000.0 million
during the same period. Revenues from the animation segment are also forecasted to increase
from Rs 2,200.0 million to nearly Rs 4,400.0 million by the end of the current year.
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SWOT Analysis:
No. Strengths Weaknesses
1. Media and Entertainment is one of the
most booming sectors in India due to its
vast customer reach. The various
segments of the Media and
Entertainment industry like television
and film industry have a large customer
base.
The Media and Entertainment sector in
India is highly fragmented.
2. The growing middle class with higher
disposable income has become the
strength of the Media and Entertainment
industry.
Lack of cohesive production and
distribution infrastructure, especially in the
case of music industry.
3. Change in the lifestyle and spending
patterns of the Indian masses on
entertainment.
The lack of efforts for media penetration in
lower socio-economic classes, where the
media penetration is low.
4. Technological innovations like online
distribution channels, web-stores, multi
and mega plaxes are complementing the
ongoing revolution and the growth of
the sector.
5. Indian film industry is second largest in
the world and the largest in terms of the
films produced and tickets sold.
6. The low cost of production and high
revenues ensure a good return on
investment for Indian Media and
Entertainment industry.
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No. Opportunities Threats
1. The concept of crossover movies, such as
“Bend It Like Beckham” has helped open
up new doors to the crossover audience
and offers immense potential for
development.
Piracies, violation of intellectual property
rights pose a major threat to the Media and
Entertainment industry and companies.
2. The increasing interest of the global
investors in the sector.
Lack of quality content has emerged as a
major concern because of the „quick –
buck? route being followed in the industry.
3. The media penetration is poor among the
poorer sections of the society, offering
opportunities for expansion in the area.
With technological innovations taking
place so rapidly, the media sector is facing
considerable uncertainty about success in
the market place.
4. The nascent stage of the new distribution
channels offers an opportunity for
development.
5. Rapid de-regulation in the industry.
6. Rise in the viewership and the
advertising expenditure.
7. Technological innovations like
animations, multiplexes, etc and new
distribution channels like mobiles and
internet have opened up the doors of new
opportunities in the sector.
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Scope of Media and Entertainment Sector:
Because of its ability to influence the thoughts and behaviors of consumers, Media and
Entertainment industry is considered a very powerful industry. India is becoming the leading
destination of global investors in this industry. Various studies and figures reveal that Indian
Media and Entertainment industry has significant potential of growth stored in it.
Current Scenario:
Media and Entertainment industry is one of the most flourishing sectors in India. The Indian
Media and Entertainment industry grew from Rs. 35,300 crores to Rs. 43,700 crores during the
year 2008-09. The liberalization of the media sector has opened up the gates of opportunities
and growth. India is witnessing a revolution in this sector with the emergence of new
technologies. Many companies are taking initiatives to set up digital theatres, multiplexes etc.
India is emerging as a global destination for the Media and Entertainment players because of the
following reasons:
? The number of channels is increasing each day.
? India is emerging as one of the world?s largest markets for digital and mobile music.
? Entry of private sector companies and increasing FDI and FII.
? The concept of crossover movies and crossover audience is also gaining momentum.
? The Indian Media and Entertainment industry is also making its presence felt in the global
market with its movies and music.
? India?s large pool of creative skills and growing domestic market for animation and special
effects industry.
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Piracy and violation of intellectual property rights have posed a major threat to the Media and
Entertainment companies worldwide. Lack of quality content has also become a major area of
concern for the Media and Entertainment companies in India.
Given the high rate of economic growth and technological developments, Indian Media and
Entertainment industry is poised to register a tremendous growth in the coming years.
Future Scenario:
The future of Media and Entertainment industry depends largely on the growth of Indian
economy. The Indian economy is growing at a fast rate; thus, there is also a bright future in store
for all the segments of the media and the entertainment industry. With the incomes of the people
rising at a fast rate, people are spending more on their entertainment and leisure activities. India
is poised to enter the period of immense growth in this sector. The global entertainment industry
is projected to reach US$ 1.8 trillion by 2015. The Indian Media and Entertainment industry is
expected to grow at and annual growth rate of 19% to reach Rs. 83,740 crore by 2010.
The expected CARG of various segments of the Media and Entertainment industry in India till
the year 2010 is as follows:
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http://www.naukrihub.com/india
The projected size of the various segments of the Media and Entertainment industry in India till
the year 2010 is as follows:
? Radio – Rs. 1200 crore
? Music – Rs. 740 crore
? Television – Rs. 42700 crore
? Film Industry – Rs. 15,300 crore
? Print Media – Rs. 19500 crore
Exciting new developments in the technologies used in Media and Entertainment industry are
taking place. Animations, multiplexes, new distribution channels, the use of internet, are
redefining the entertainment industry. All these factors will favor the growth of Media and
Entertainment industry in India.
32%
1%
24%
18%
12%
radio
music
television
film industry
print media
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Categorization of the Sector:
The Indian Media and Entertainment industry can be categorized as follows:
? Radio
? Film Industry
? Television
? Music
? Live Shows
Radio:
Radio has made a comeback in the lifestyles of Indians. Radio has the reputation of being the
oldest and the cheapest medium of entertainment in India. The radio industry has been
completely reshaped by the various private players that entered the sector after the government
allowed foreign investment into the segment and opened the licenses to the private players.
The Indian government has already given 338 licenses for FM radio channels in 91 big and small
towns and cities. The current size of the radio market in India is Rs. 300 crores and is expected
to achieve the highest growth rate of 32% in coming years. The quality of the sound and the
music has improved significantly with the emergence and use of satellite radio. The audience
profile has also shifted to the high – income group. Local advertising, lower amount of money
spent by the companies to advertise on radio is an added attractiveness for the players. All India
Radio (AIR) – the national service provider owned and operated by the Ministry of Information
and Broadcasting under the Government of India – is the largest player in the industry.
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Film Industry:
Next to Hollywood, Indian Film Industry is said to be the largest in the world. And it is the
largest in terms of films produced and tickets sold.
The Indian Film Industry is currently worth about US$ 1256 million and is expected to grow at a
Compounded Annual Growth Rate of 18% for the next 5 years. Nearly one thousand films are
produced every year. The technology used and the special effects in movies are becoming
increasingly sophisticated and animation is also finding a huge market with kids.
The industry is currently witnessing the trend of more digital cinemas and growth of multiplexes.
The Dubbing industry has grown at the rate of 25-30% over the last 4-5 years. Many
international films are dubbed in local languages and shown in India. India has over 5 million
home video and DVD users. The Indian Film Industry is also making its presence felt in the
international market. The foreign investment in the Indian Film Industry is also increasing
significantly. In fact, it witnessed the maximum flow of foreign investment in 2006.
Regional (especially southern) films command almost 60% of the total Indian film market with
the rest being commanded by Hindi films.
Television:
The television industry is witnessing a spate of new channels being launched every year. TV is
also penetrating into the rural areas and is a promising segment. Homes with TVs are expected
to grow from 112 million to 200 million in a few years.
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India boasts of being the third largest television market in the world today. And cable
penetration (pay TV market) is expected to grow from the present 70 million to all TV homes.
More than 350 channels (paid and free) are available to viewers in India today.
The fact is that 40% households of India are still without television connectivity highlights the
scope of growth in the segment. The majority of the revenue generated in the television industry
is through advertisements, followed by subscriptions. The Indian television advertisements
market is currently valued at about US$ 1067 million and is expected to grow at a rapid rate with
the increase in the number of channels and the television viewers. Over the next five years, the
subscription revenues are poised to be the growth driver of the Indian television industry. The
number of pay TV homes and the increased subscription rates will increase the subscription
revenues. The spread among the lower – income groups is very low and offers a wide scope for
growth. The Indian television industry is currently being dominated by Star India, which is the
top player in the sector at present.
Music:
The Indian entertainment industry is incomplete without music. Other segments such as remix,
Indi-pop, mobile music have also gained popularity.
The Indian film industry is inseparable from music. Music contributes as much as 15% of an
individual film?s earnings. The major problem that has become a risk to the existence of the
music industry itself is piracy. Piracy has resulted in a sluggish growth of the worldwide music
industry.
Recently, „mobile music? and „licensed digital distribution? services helped in the recovery of the
music industry. Ringtones are the dominant component of the mobile music market. For a long
time, the Indian music industry was dominated by the film music but now a significant portion of
19 | P a g e
the revenues are also contributed by music videos and private non – film albums. Indian music
also has a large market overseas. There is also a demand for classical and devotional music. The
new distribution channels like online music stores are gaining popularity. T-Series, Sony and
Venus are some musical players in India.
Print Media:
India offers a promising market for the print media industry. The expected CAGR of 12% up to
2010 is a result of the increasing rate of literacy and thus the increase in the number of people
reading newspaper and magazines. Also, the demand for the latest events in the country and the
world is driving the newspaper industry growth. In 2010, the print media is expected to reach
Rs. 19500 crore from its present value of Rs. 10900 crore.
The bright future and the immense scope of the Indian print media have also aroused the interest
of foreign investors and recently the government has opened up the sector to foreign investment.
Foreign media has also shown interest in investing in Indian publications. The revenues for
India?s newspaper market are generated from advertisement and circulation. India?s growth rate
in this segment is poised to be higher than the average rate of growth in the Asia – Pacific region
over the next four years.
Digital printing, new ways of promoting and distribution are the latest trends and content being
the focus of the print media industry. A few leaders in India in this segment are: Times of India
Group, Dainik Jagran, Lok Satta, The Hindustan Times and The Hindu.
Live Shows:
Live entertainment is a huge source of revenue for the global Media and Entertainment industry.
Live entertainment sometimes also called event management – is growing at a fast and steady
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rate. The number of corporate awards, television, films, sports events are increasing rapidly,
helping the sector grow at a fast rate.
The current live entertainment segment of the Media and Entertainment industry comprises a
small number of large event management companies and a large number of smaller companies.
Various types of live entertainment events are:
Award Shows
Celebrity
Appearances
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The revenue streams for the live entertainment sector are:
Problems faced by the segment:
? Lack of adequate infrastructure for organization and staging of events.
? Sophisticated lighting and special effects equipment required is hired from abroad. Presently
imports are hampered by lengthy procedure for import of such equipment.
? High levels of entertainment tax imposed by the government.
The major challenge faced by the segment is the unorganized nature of most event management
companies, which continues to hinder the growth of this segment.
Ticket Sales
Sponsorship
Receipts
Advertising
Revenues
Licensing of
IPR
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Comparison between Sectors:
Radio
Film
Industry
Television Music Print Media
Live
Entertain-
ment
Current Size Rs.300 Crore
Rs. 6800
Crore
Rs. 14800
Crore
Rs. 700 Crore
Rs. 10900
Crore
Rs. 800 Crore
Projected
Size by 2010
Rs.1200
Crore
Rs. 15300
Crore
Rs. 42700
Crore
Rs. 740 Crore
Rs. 19500
Crore
Rs.1800
Crore
CAGR 32% 18% 24% 1% 12% 18%http://www.naukrihub.com/india
23 | P a g e
RADIO INDUSTRY
Introduction:
Old media don?t? die! They just bounce back in new avatars. Not so long ago radio had been
written off as fuddy-duddy, down market and not so cool. Television and later “new media” were
touted to being the media of the future. But thanks to technology radio is making a comeback. In
fact, in its new avatar-fm-radio is all set to become the hippest, coolest and most with -it
medium.
FM radio is a new entity altogether and has to deal with new market dynamics. Media owners
dealing with new markets will virtually have to draw up their strategies as they go along, create
programming that is new, innovative and grab away eyeballs from TV sets and make them tune
into their radio sets. It?s a whole new challenge and competition is never far away. Ad revenues
will also not be easy to come by, as advertisers will expect media players to put their money
where their speakers are before they commit large sums of money towards radio advertising. The
other challenge for radio in attracting advertisers is the nature of the medium-radio has always
considered being a reminder medium. The involvement of listeners to radio is low, Vis a Vis
television or print media.
However in spite of the various challenges the emergence of private FM stations is certain to
increase the quantum of radio advertising in the country , much like satellite channels did to the
quantum of television advertising in the country. That should open up a vast new market of
consumers-100 million Indian households own an estimated 150 million radios, outnumbering
television sets 3:1.
The geographical area covered by radio in India in India is as high as 98 percent and the
penetration level is approximately 97 percent. But FM presently covers only 17 percent of the
area and 21 % of the population of India through transmitters. Currently radio has just 2 percent
24 | P a g e
of the 9000 crore Indian advertising market according to an Arthur Anderson?s survey. Globally
depending on each country, radio has a 5 % to 12 % of the advertising cake. On the higher side
are countries like the United States with 13 %, Canada with 12.7% and Spain with 9.1%.
FM station executives are not forthcoming on multi-platform strategies as yet. Given that radio
has penetrated into 100 million homes and a FM set costs around Rs. 50/- FICCI estimates FM?s
share up from the present 1.5 percent to 5 % in five years. They have also forecasted that
revenues from radio advertising in India will be Rs. Rs. 1200 crores by 2005 and Revenue of
radio services is expected to rise to Rs 689 crore by 2008 at a CAGR of 30 per cent.
While TV is a family medium, radio is personalized. Also advertising of certain product seems to
work very well while some might not. For example, cellular phone service or auto related
products would have a good impact when advertised on radio is primarily known as a “drive
time” medium most people who turn in are doing so while commuting. Thus the potential if FM
is better is bigger town, as the car population is much bigger. This would be the key when
evaluating the medium. Also one must not forgot that radio continues to be a medium that has
tremendous reach among the poor and marginalized sections of society.
With the coming of more channels, and the emergence of lifestyle advertising, radio will become
a push and pull medium. As said earlier, is not just making a comeback but is being reincarnated
into a new avatar.
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History of Indian Radio:
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 ci t i es.
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, t he bi ddi ng 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.
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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 players. Currently, FM coverage in India is restricted to just 17% of the
country, compared to 89% of All India Radio (AIR).
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Advent of Format Radio:
The arrival of 'Moving Pictures' with sound and then 'Television' were expected to be the death
knell for 'Radio'. However Radio has not just survived repeated predictions of its demise but
grown tremendously. It has benefited listeners and advertisers alike and earned the status of a
'Constant Companion'... What allowed Radio to accomplish this feat? Read on for the long
journey the Radio industry has covered thus far.
It was way back in 1895, that Guglielmo Marconi invented an antenna to send and receive radio
signals. It took quite a while before Reginald Fessenden developed the first radio receiver in
1913. However, experts give a lot of credit to David Sarnoff who actually conceived what is
called as the "radio music box". It was Sarnoff who suggested that radio should be mass-
produced for public consumption. His persistence paid off in 1919 when such sets were available
for general purchase. This saw the beginning of what was later looked on as the 'Golden Age of
Radio'.
Early 1920s saw the launch of commercial radio. People in households would gather around the
radio to listen to their favorite programs much as they do today with TV. Radio became the first
medium delivering entertainment to the masses in their homes. The 1st paid announcement on
radio was a 10-minute capsule from Howthorne Court; a Queens based Real Estate Company.
This era was characterized with 'block programming' wherein radio offered something to
everyone. News, drama, sports; live musical recordings would be presented in 30 or 60-minute
programs. A network soap opera could be followed by a 15-minute newscast followed by one
hour of a concert.
Then in the 1950s TV began to catch the public's attention. Audiences were charmed by the
audiovisual experience of TV. A large number of popular shows moved from radio to TV. That
was not all, as the radio industry was also losing a large number of talented staff to TV.
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At this point in time, radio experts discovered an opportunity that only radio could provide. They
realized that radio was the only medium that could be used while doing other things, like getting
dressed for work, cooking a meal, traveling to office, studying and more.
Radio turned 'local' and moved to what is known in the industry as 'Format' programming. This
era also spawned two of radio's greatest strengths: immediacy and local service. Format radio
strategy was based on providing the same kind of entertainment to a selected audience,
throughout the day, seven days a week.
As the story goes, Storz and McClendon used to frequent a local malt shop, which had a jukebox.
They observed that the customers would usually come and play the same songs that they liked,
over and over again. In fact, the staff serving these people would end up playing just the same
songs even when the shop was closed. From this insight emerged the "Top 40" format or the
"Contemporary Hit Radio (CHR)" format were the most popular hits would be played on a
higher rotation.
This led to a change in the way radio time was being sold. Sales people shifted from selling
programs to selling commercials. It also led to a shift in the way radio programs were scheduled.
As radio was being used as a background medium of entertainment, it had to be relevant to the
listener at every point of time in the day. The shows therefore had to be reflective of various day
parts in the life of the listener.
Irrespective of the form it came in, format radio definitely made radio not just survive the
onslaught of TV but also made it grow tremendously. Being the only medium that could be
carried and used wherever you are, it could update you about your world throughout the day
while providing you with the entertainment you like all the time. Radio became "The Constant
Companion".
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The total number of radio sets at the time of independence in 1947 was a mere 275000.at that
time a radio receiver used to be a status symbol in this country. But today its possession is taken
for granted. According to estimates, there are radio sets in about 105 million households in the
country.
General Overview:
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India. The estimated worth of the industry was Rs 3
billion in 2005 and the spiraling growth is predicted to make the industry worth Rs. 12 billion
with almost three times the present number of FM stations.
The public radio broadcaster is AIR is the oldest FM station in the country. AIR has a wide
reach that spans the length and breadth of the country. Apart from that there are FM, community
and satellite stations in our country. The change in the FM policies has been a precursor for
growth in the number of FM stations in the country. This change came at a time when there
were several advancements in technology, the media industry was growing and people were
demanding alternative options for entertainment. All these conditions favored for a kick-start of
private radio industry in India. It was time for change in the radio industry as India was lagging
behind by few decades when compared to many countries in the world.
30 | P a g e
So what exactly was the scenario and how did it change?
The FM policy until the late nineties was biased towards the public broadcaster. The first phase
of privatization in the radio industry happened in the year 1999-2000. The license fee fixed was
very high, with an additional increase of 15% on the license fee year on year. This policy change
was the new beginning which radio industry needed in the country. 108 radio stations opened in
eight cities across India. However, the high license fees continued to affect the stations, as they
were not even able to break even and were accumulating losses.
In 2006, the phase two of FM policy brought a radical change to the whole radio industry. There
was a shift from fixed license fee to the revenue sharing model. Under this policy, the
companies would pay to the government only 4% of their annual revenues or 10% of One Time
Entry Fee (OTEF), whichever was higher. The companies that already had radio stations could
also shift to this model of revenue sharing by paying an OTEF. OTEF is the average amount of
the number of successful bids in the city. The new shift encouraged many companies to venture
to this media segment. Around 266 stations were bid for in 91 cities in phase two, this number
was in addition to the existing 21 stations in several cities. The license was valid for a period of
10 years from the day of Rs. 1100 crores. The media and entertainment industry was greatly
encouraged than the previous phase as experts predict bidding for another 7oo stations with the
number of stations rising to a sum of 1000 stations. The FM boom set to take off not only in the
metros and capital cities but also in tier 2 cities and towns with many prominent companies
investing money here.
After the reforms in the year 2006, the map of radio industry was redrawn and many prominent
companies played a very important role in this event. Prominent among them were ENIL, HT
Media, Suryan FM, Adlabs etc. A government imposed rule did not allow any company to have
a stake of more than 15% in the total FM stations and a company could not have more than one
station in any city. Because of this rule, Suryan FM and Adlabs had to return around 30 stations
each after the 200d bidding process.
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There is also cap on foreign companies investing in radio stations in India. The FDI policy
introduced in 1995 enforced a 15% cap on investment by the foreign companies. Because of this
constraint, many companies have tied up with other radio channels in India to mark their entry in
this market. These companies include BBC, Radio Astro, and Virgin to name a few.
There has not only been an increase in the number of stations for people to tune in to but the
number of devices through which they can access this medium has also increased. Today we
have radio transmitters, stereo?s, Personal Computers, Car stereos, mobile phones, FM players,
MP3 players, and several different devices to receive an operating radio frequency. Users are
consuming radio not just from the traditional and new media is still in the nascent stage, it points
towards a very exciting and interesting future. Companies offering DTH services are
broadcasting radio channels live on TV, making it another medium for offering radio service.
E.g. Tata Sky is broadcasting AIR channels. The media industry is witnessing convergence of
different media and content in this content starved industry.
Radio has many advantages for the audience, for instance the involvement and interaction
required is minimal when compared to TV, internet or mobile. Radio is more of a background
medium that is also portable and hence is leading a parallel existence of its own. The equipment
can be purchased for as cheap as Rs. 50.
One of the most important issues that would concern any radio channel would be the
measurement of listenership of their channel, as the measurement is directly linked to the money
the advertisers will be willing to spend on their channels. Radio channels initially had their own
company specific methods of tracking listenership when there was no credible mechanism to
track listenership. IMRB and The Nielsen together under TAM have introduced RAM, Radio
Audience Measurement, to calculate the people listening to which, what, when and how much of
a radio channel. RAM, introduced in March 2007 came into effect from September 2007. The
measurements provided are on a weekly basis. RAM follows the Diary method of measurement,
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interviewing 480 people in five cities. The panel chosen has to fill the diary details of what they
listen to every 15 minutes, everyday. The reach for a radio channel is calculated only if a person
has listened to radio for more than 8 minutes. The responses collected every week are then
analyzed. Presently this is the basis of audience measurement for radio channels in India. Radio
stations also have an in-built mechanism of measuring the audience by estimating the number of
people who called up to the number of people who were actually listening to the program.
Another measurement technique is the Indian Listenership Track conducted by MRUC and its
partner agency, AC Nielsen ORG-MARG that used the Day After Recall mechanism. This was
the initial measurement technique used by FM channels to measure the number of listeners tuned
in at any point. However this mechanism was discontinued because of the huge time gap
between the time the user would have listened to a program to when the user recalls it. This
method is still in vogue but it is not used widely.
Radio industry has evolved from a single public broadcaster (AIR) to hundreds of FM channels
today. What comes to the fore is interesting issues like setting up of a radio station, the
competition emerging, the need for content differentiation, and the fight for advertiser?s
attention.
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Early 2000
80’s – early 90’s 70’s
Radio – the leader in media
Radio - the dead media
Public
broadcaster
Slow songs
RJs – Classical -
Iconic
Amin Sayani…
High incidence of
speech
programming
Radio – The
entertainment maestro
Fresh, new, and
dynamic..
Music led, speech
programming
limited to jock-talk
and programme
formats built in
music shows
2-3 channels
fighting for market
share with almost
similar
programming
M
e
d
i
a
P
r
o
m
i
n
e
n
c
e
Late 90’s Current
RJs -
Becoming
staid
Old time
music
Stuck in the
past
AIR FM starts
with more hip
and interactive
programming…hit
music…request
shows….
dedications
Revival of Radio
Advent of FM
TV the ruling king, Radio – only
Vividh Bharati
No TV
Advent of Private Channels -
2-3 stations
Private Radio Platform….buzzing
with choices…almost 10 in
number…fighting for differentiation,
yet to go niche
Small differences with non-stop
music, English music...TV stars as
RJs...mood led programming...etc…
The radio market is now
virtually unrecognisable
from the time when the
BBC was dominant
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Characteristics of Radio:
1. Cost and Efficiency:
One of the main strengths of radio as an advertising medium is its low cost. Radio
commercials are very inexpensive to produce. They require only a script of the commercial
to be read by the radio announcer or a copy of a prerecorded message that can be broadcast
by the station. The cost for radio time is also low. The low relative costs of radio budget
needed for an effective radio campaign is often lower than that for other media. The low cost
of radio means advertisers can build more reach and frequency into their media schedule
within a certain budget. They can use different stations to broaden the reach of their
messages and multiple spots to ensure adequate frequency.
2. Selectivity:
Another major advantage of radio is the high degree of audience selectivity available through
the various program formats and geographic coverage of the numerous stations. Radio lets
companies focus their advertising on specialized audiences such as certain demographic and
lifestyle groups. Most areas have radio stations with formats such as adult contemporary,
easy listening, classical music, country news/talk shows to name a few. Radio can reach
consumers other media can?t. Radio has become a popular way to reach specific non –
English speaking ethnic markets. As mass marketing gives way to market to market
segmentation and regional marketing, radio will continue to grow in importance.
3. Flexibility:
Radio is probably the most flexible of all the advertising media because it has a very short
closing period, which means advertisers can change their message almost up to the time it
goes on the air. Radio commercials can usually be produced and scheduled on very short
notice. Radio advertisers can easily adjust their messages to local market conditions and
marketing situation.
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4. Mental Imagery:
A potential advantage of radio that is often overlooked is that it encourages listeners to use
their imagination when processing a commercial message. While the creative options of
radio are limited, many advertisers take advantage of the absence of a visual element to let
consumers create their own picture of what is happening in a radio message. Radio may also
reinforce television messages through „image transfer?.
5. Integrated Marketing Opportunities:
Radio provides marketers with a variety of integrated marketing opportunities. Radio
stations become an integral part of many communities, and the RJs and program hosts may
become popular figures. Advertisers often use radio stations and personalities to enhance
their involvement with a local market and to gain influence with local retailers. Radio also
works very effectively in conjunction with place-based/point of purchase promotions.
Retailers often use on-site radio broadcasts combined with special sales or promotions to
attract consumers to their stores and get them to make a purchase. Live radio broadcasts are
also used in conjunction with event marketing.
6. Creative Limitations:
A major drawback of radio as an advertising medium is the absence of a visual image. The
radio advertiser cannot show the product, demonstrate it, or use any type of visual appeal or
information. Because of these creative limitations many companies tend to ignore radio, and
agencies often assign junior people to the development of radio commercials.
7. Fragmentation:
Another problem with radio is the high level of audience fragmentation due to the large
number of stations. The percentage of the market tuned to any particular station is usually
very small. Advertisers that want a broad reach in their radio advertising media schedule
have to buy time on a number of stations to cover even a local market.
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8. Chaotic Buying Procedures:
It should be readily apparent how chaotic the media planning and purchasing process can
become for the advertiser that wants to use radio on a nationwide spot basis. This problem
has diminished somewhat in recent years as the number of radio networks and of syndicated
programs offering a package of several hundred stations increases.
9. Limited Research Data:
Audience research data on radio are often limited, particularly compared with TV,
magazines, or newspapers. Most radio stations are small operations and lack the revenue to
support detailed studies of their audiences. And most users of radio are local companies that
cannot support research on radio listenership in their markets. Thus, media planners do not
have as much audience information available to guide them in their purchase of radio time as
they do with other media.
10. Limited Listener Attention:
Another problem that plagues radio is that it is difficult to retain listener attention to
commercials. Radio programming, particularly music, is often the background to some
other activity and may not receive the listeners? full attention. Thus they may miss all or
some of the commercials.
11. Clutter:
Clutter is just a problem with radio as with other advertising media. Advertisers must
create commercials that break through the clutter or use heavy repetition to make sure their
messages reach consumers.
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Constituents of the Industry Vertical:
To understand the radio industry verticals it is important to understand where radio stands in the
hierarchy of media. Media is classified into broadcasting, print and new media. Each of these
can be further sub divided. The broadcasting sector is divided further into Television and Radio
broadcasting.
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Radio Industry
Content:
The content vertical would include people involved in creating, planning and programming
content, Radio Jockeys etc. This division concerns with everything that is involved in creating a
final product for the consumers to listen. This happens mostly in house in any station. Though
there are few programs that are common across all stations of a particular FM channel, this is
produced in house in only one particular station. These programs are mostly interviews of top
celebrities, etc. There are not many channels that out source their content creation to production
houses like how it happens in television.
Communication:
This would include Marketing, Sales, Market Research, Audience measurement etc. It is
essential for the radio station to make its presence felt among the masses and also catch their
attention so that the station can pool in advertisers. For this it is also necessary to understand
what kind of program people would want to listen to and what kind of program will retain the
consumers listening to the station. Hence, market research is very necessary, at the same time it
Content
Communi-
cation
Techno-
logy
39 | P a g e
is also important to understand how the competitors are faring. All these profiles come under the
vertical of communication.
Technology:
One of the main reasons for expansion of the radio industry is advancements in technology.
Transmission equipment available is digitally enhanced. The programming studios have to be
state of the art for good quality programming. Up to date softwares for recording or content and
transmitting is essential.
It does not end with the superior transmission technology instruments and broadcasting but also
the customer-company relationship enabling systems like SMS, calls from mobiles. There is
also need for a large database that has to be maintained of the callers, people who send messages.
All these things become on important role in developing a sustained relationship with the
consumer.
Specifically sound engineers and professional programmers will handle the above technological
devices. There are also people who build studios and rent it for people to program their content.
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Areas of Operation:
The above understanding of the verticals will give help understand the several areas of operation
of a radio channel.
The most important area is distribution business as it consists of acquiring and owning a
broadcast station. There is a process of bidding for a broadcast station and this is done
individually for every city. Once the license is acquired, the channel has to set up a production
studio for recording and editing programs. This requires investment of a great deal of capital,
but once it is acquired, maintaining it would not be such a costly affair. The production house is
an asset for the channel because it is rented occasionally to other parties also.
The content business is second most important area of the business for the survival and sustained
growth. This involves understanding what content the people will listen, plan, produce and edit
it. Content creation is a very important task as the very success of a channel lies on how well it
is able to cater to its consumers. Most of the content creation is in house and the use of the
content is limited to airing on radio channels. With the convergence of media, the same content
is available as podcasts, for internet, mobile downloads etc. This business of content creation
holds huge potential for production houses that exclusively produce content for radio channels.
The need for differentiated content will become very evident as the radio industry matures and
consumers will demand for a break from the monotonous content. This holds very high revenue
potential for such production houses.
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The other areas of operation include Marketing, Sales, Market Research and the rest of which
have been dealt under the vertical of communications in the previous section. This division is
the support function and the face of the company. It is extremely critical for the Marketing team
to perform well as the overall functioning of the station would depend on the insights this
division generates. Market research can be either done by the employees of the channel or can
be outsourced to other companies. The companies depend on the RAM ratings that are from an
external organization with respect to the channel.
Thus, the above are the main areas of operation for a radio channel where all the efforts of the
company are concentrated.
Areas of Operation
Content
Manage-
ment
Distri-
bution
Marke-
ting
42 | P a g e
Radio Advertisements:
Radio is still the king when it comes to getting your music. The best way for a new band to get
heard by the public and record label executions is over the airwaves.
Paradoxically, radio currently has only a 2.9 per cent share of the total advertising pie in India.
Globally, depending on country, radio has a 5 per cent to 12 per cent share of the advertising
cake. On the higher side are countries like the United States, with 13 per cent, Canada, with 12.7
per cent and Spain, with 9.1 per cent.
Companies that advertise on FM channels today such as Hindustan Lever (HLL), Dr Morepen,
Amul, Castrol, Santro, Britannia, Parle, DSP Merrill Lynch etc are dominating the advertising on
each one of the FM channels, be it Radio Mirchi, 92.7 Big FM, Red FM 93.5 or Radio City.
Today, 70 per cent of the advertising comes from big-budget, national advertisers and the
balance 30 per cent comes from retail. It is a known fact that retail advertising will grow because
radio presents the perfect advertising medium for local businesses in a local environment. But
national advertisers are also operational in the local market, implying that it is as important to
them as it is to a retail advertiser, if not more.
Nevertheless, it is undeniable that radio can be integral in exposing a new artist, new product or
services to new fans and taking a local market to a national level. Accordingly, it is extremely
difficult to obtain meaningful airplay. Putting it bluntly, successful radio promotion revolves
around making and managing relationships.
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Radio promotion is an art that demands a certain style you may simply neither have nor desire to
cultivate. On top of that, it can take a great deal of time to make all the contacts and connections
that are required for successful radio promotion.
Advertising agencies that control the national picture will be slow to move on to radio for
creative reasons. They have people who love to make television commercials, but don't have
anybody who knows how radio works. Here, only about 2.9 per cent of the money spent by
advertisers goes to radio, and up till now, all of that went to ALL INDIA RADIO.
However, in revenue terms, money from advertising has gone up. Revenue from commercials on
AIR, including on Vividh Bharti and Primary Channel (including FM) rose from Rs 393 million
in 1990, to Rs 808.4 million in 2000, & Rs. 600 crores in 2002, representing a growth of about
7.5 per cent per annum.
A clear advantage that radio has is that it can easily target city-based audiences. This makes
sense if the advertiser, like a food chain that is opening an outlet in Mumbai, wants to target a
specific audience. In such cases, it does not make much sense to advertise on TV, and the print
medium is too expensive. Radio is the best bet for such small-scale promotions. It is also aptly
suited for local promotions, and once audiences can be targeted, it has tremendous potential to
eat into local mediums.
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Customers of Radio Industry:
The main customers of radio are the people who listen to radio. There is a thin line between
customers and consumers of radio. There is no clear demarcation when a customer would
become a consumer and vice versa. Radio functions when mostly as a background media that
becomes a product for consumption when a person becomes a listener of the ongoing program in
the channel. On an average, research has proved that the highest listenership to radio is in the
morning and evening hours. After which is the night and early morning hours which attract
maximum listenership across different cities uniformly. The advertisement charges, that are
currently available for each of these channel is based on these peak hours. The rates however
change from city to city also. Metros like Mumbai and Delhi have higher advertisement rates
than a tier 2 city.
This brings us to the next important customer i.e. the advertiser. The advertiser charges based on
the listenership data for each show and the target group he wants to address. The money
advertisers spent on radio increased by about 15% in the year 2007. Though the money spent on
radio is very less, just bout one-tenth the ad revenues spent on TV, it was still a significant
number. What was significant was while the radio ad revenues doubled from the year 2004 the
ad revenues on TV just grew up by 1% in the same period. Another interesting revelation is that
the impact of the advertisement was higher if there were parallel campaigns in TV/print and in
radio than just in one media. This is called ad multiplier effect.
Third party monitoring is available for the advertisers to help them spend their money
judiciously on radio. Radio Ad-ex is the main external monitoring agent of all the advertising
spend all through the day in 4 metros across 13 channels. According to their reports:
? The maximum money for advertising is spent on radio for TV channel productions followed
by real estate property, FMCG products.
? Unilever is estimated spending the largest amount of money on advertising in radio.
? Local advertisers are prominent advertisers compared to national advertisers on radio.
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Establishing Business Activities in Radio Industry:
To start an FM channel in India, there are several things which have to be kept in mind; the
prominent ones are as follows:
1. FM Frequency:
The process of obtaining frequency for FM broadcast. The investment for the bidding
process and the One Time Operating Fee to be paid for the license and the annual license fee
for retaining channel on air.
2. Music Royalties:
Since music is one of the mainstays of the radio channels, music royalties becomes one of the
expenses for a station. Broadcasting station will have to buy royalties from music companies
like T-Series, Saregama, and HMV etc to play them on air.
3. Infrastructure:
Broadcasting channel will need software for recording, programming and broadcasting.
Transmitter for broadcasting the frequency, servers to storing the recorded data, mikes,
headphones for recording programs, computers to operate on, office space for setting up the
station and transmitter etc are the basic requirements of a channel.
4. People:
The biggest asset of any radio channel is the people – Radio Jockeys, technicians, market
researchers etc. Radio Jockeys are the face of any channel; many channels are at times
identified by the radio jockeys and not the frequency or program. Hence it becomes essential
to recruit talented people for the posts.
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Market Potential:
The radio industry holds huge potential for growth going by the present rates of growth. With
the addition of a couple of hundred stations to the existing numbers, the revenue is projected to
touch 13 billion by 2010. This would be a growth by five times in just a decade.
Year 2004 2005 2006 2007 2008 2009 2010
Rs. 2500 3000 4000 7000 8000 11500 13000
Investment and ROI:
Investment:
License:
50% of One Time Entry Fee has to be paid at the time of bidding for license; this is to ensure that
the companies bidding for license are serious about it. This license would be an investment for a
period of 10 years on part of the channel.
Studio:
One of the main investments would be in setting up hi definition technology studio for
broadcasting the shows. Hi-definition technology means extremely good sound quality both wile
recording and transmission devoid of any unwanted interruptions. It can support files of
different formats.
A radio station would need transmitters, codec?s, mixers, software etc to set up a studio. Many
of the companies outsource their equipment from USA. Digital Audio Broadcast that converts
the speech or music recorded in analog to digital code. This will enable reception of a particular
FM frequency without interference from external objects. Investment for technology to provide
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radio via new media; new channels should invest in infrastructure to provide visual, mobile and
online radio. Provision for distributing the channels via DTH and can be prepared for the
introduction of IPTV that might change the dynamics of the game.
Return on Investment:
From Advertiser’s Point of View:
Return on Investment is very high for advertisers as ad rates are very low and so is ad avoidance
rate. Radio is the cheapest and effective medium of advertisement for advertisers.
From Channel’s Point of View:
It takes time for a radio channel to recover money invested on acquiring license, infrastructure,
music rights etc. The money has to be recovered through advertising mostly. The location of the
channel is very important as based on their location they can attract advertisers with high
spending power. This might prove as a hindrance to set up radio channels in tier 2 and rural
cities as recovering investment costs through advertising is a time consuming process.
Revenue generation has increased after the phase 2 reforms in the FM industry. Initially close to
50% of the revenues was spent on paying license fee. This has reduced to close to 5% for the
company which increased the profitability to around 53% from 8% during phase 1.
World over when the revenue from advertising is at 5% then it is considered to be in growth
phase and in mature phase if it is around 10-12%. In India this is around 3% which shows there
is lots of scope for growth.
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Issues and Problems:
Issue Effect
One frequency for on company
in a city.
This limitation does not give a company scope to
experiment with content. Starting up of niche channels
targeting only a particular segment in the market is a very
risky option. A handful of such channels exist in the group
of few hundred channels. If this rule is relaxed, emergence
of many niche channels in the same area by one operator
can be expected.
Radio listenership targeting Radio listenership targeting mechanisms are just evolving
along with the listeners. The market is in a very nascent
stage so evaluating the market is very tough and it will take
some time before parameters to evaluate the listenership
measure is established. Even the existing evaluation is
restricted to the metros and capital cities and that cannot be
extrapolated to other towns and tier 2 cities. A consistent
mechanism suiting all geographic and demographic
segments has to be developed.
Money doled out as music rights The money paid as music rights comes to an average of Rs.
5 million per station. Stations in smaller towns will not be
able to sustain themselves at this rate. This also means that
all channels end up playing the same kind of programs
bringing in monotony. There is an urgent need to
differentiate content to reduce prices, attract and maintain a
listenership base.
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Issue Effect
News and current affairs not
allowed
News and current affairs are not yet allowed on FM
channels. The industry is fighting t change this law as
the change of this law might break the monotony
caused by playing only Bollywood songs.
Competition from new media With increasing penetration of broadband, there is
considerable competition from online radio, podcasts
which are a threat to radio industry?s revenues.
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.
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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.
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Five Force Analyses:
The five forces that shape industry competition are:
Bargaining Powers of Suppliers:
There is low bargaining power of radio players as there are many players in the industry. Again
it differs in each case. It depends on several factors, because every radio station is different in
their offering. So it does create its own demand. It also depends on listenership ratio of FM
station.
Rivalry Among
Existing
Competitors
Threat of New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitute
Products or
Services
Bargaining
Power of
Suppliers
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As far as, Ahmedabad is concerned, there are mainly 6 players in the industry; 5 private players
and remaining 1 is All India Radio. The offering of them are more or less same. Therefore there
is a low bargaining power of radio players in Ahmedabad.
Bargaining Powers of Buyers:
Buyers have a high bargaining power, as there are many options available to them, if cost is a
constraint to them. Bargaining take place a lot in terms of rates of advertisements.
In Ahmedabad, the offering of the radio players are more or less same. Therefore buyers get
benefits out of them. If one player does not bargain properly or according to customers wish,
they may go to other radio player. In this way, the bargaining powers of buyers are high.
Threat of New Entrants:
There is very low possibility of new entrants as there is only one slot available to be sold, which
will be allocated by bidding. But, speculation is that, Reliance ADAG led Big FM is about to
close the deal. If Big FM will enter Ahmedabad, it will surely increase the competition and will
make it more competitive.
Threat of Substitutes:
All other forms of entertainment can be a threat to the radio industry.
? Television – New channel or new show are launched
? Mobile – Mobile with high technology provides internet radio or other features of internet
? Computer Games
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? Internet – In internet social media is increasing day by day
? Print Media – Many magazines like Femina, Business Standards etc provides tough
competition.
? Film Industry – India is at 2
nd
position in this industry in the world.
? Live Shows – Fashion shows or any brand promotion shows are increasing popularity day by
day.
Rivalry among Competitors:
There are many players in the state, so competition is fierce among them. There is healthy
rivalry among all competitors, as only revenue generation element in radio industry is slot
selling, so all players are competing to get as many clients as they can on their FM.
Particularly in Ahmedabad, there are 5 private players. Therefore rivalry among them,
particularly for advertising revenue is increasing.
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SWOT Analyses:
No. Strengths Weaknesses
1. Recently, the government has agreed upon
revenue-sharing model, which is 4 % for
the growth of the radio stations. So that
they can develop themselves well because
this industry is still in an introduction
stage.
One of the major weaknesses of Radio is
that there is very less differentiation in the
programs that are aired. Most of the
stations plays much of the music that is
played consist of Hindi Film songs, and
therefore it is difficult to differentiate
between the programs of the different
channels.
2. The success of private FM stations, and
reveals that radio listenership habits have
changed considerably; not only are
listeners tuning into it more often but also
sticking to radio for longer hours
everyday.
Fragmented Audience - the large number
of the audience in India is fragmented in
various remote places. And therefore, the
percentage of listener tuned to anyone
station is likely very small.
3. The advertisers, who would depend on
word-of-mouth, pamphlets, brochures or
ads in local supplements of newspapers,
are welcoming the opportunity.
No proper research available - research is
very important for any advertising
segment. Research is the main base to
attract client and get more revenue. But, in
India there is no proper research is
available. Many stations are conducting
their own research which can be biased.
4. Radio is considered as a background
medium, because people can listen to
radio anytime and anywhere they want. It
is also a free medium.
Radio-only nature of radio communication
is a tremendous creative compromise. An
advertiser whose product depends on
demonstration or visual impact is at a loss
when it comes to radio. And like its radio
message creates a fleeting impression that
is often gone in an instant. Many
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advertisers think that without strong visual
brand identification the medium can play
little or no role in their advertising plans.
5. 90% of India has access to radio which is
unmatched by any other media.
Increase in listenership numbers but no
increase in ad revenue. This is the
situation that every radio channel is
facing.
6. Radio also reaches to uneducated village
folk who do not read print publications.
At the places where the literacy rates are
low where people hardly read newspapers
and radio is the only medium that they can
understand. They can?t afford a TV set.
Therefore radio is more popular.
Short commercials.
7. Radio is the least cost medium and it
helps to reach mass audience with various
backgrounds. Radio offers its reach
frequency and selectivity at one of the
lowest costs per thousand and radio
production is relatively inexpensive.
8. Radio is considered as a medium where
the “Proximity to purchase” is very high.
9. Radio is a complement to another media.
Therefore, other media or the advertisers
or agency can use this medium for brand
recall.
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No. Opportunities Threats
1. Getting copyright licenses from the
government for running mega events
which are aired on the AIR radio station
and have been restricted to be aired on
other private stations.
The biggest threat to private radio industry
players is ALL INDIA RADIO. AIR is the
biggest player in India because of its reach,
low charges, government channel etc…
2. Launching a radio station with 24-hour
news channel.
Because of the new government policies
there will be more number of stations and
then competition will also increase. This is
one of the biggest threats it faces. With no
particular differentiation in the music. So,
there is a fear of losing its brand loyalty.
3. Tie-ups with road transport or railway
authority for playing the FM in train and
in bus.
4. The launch of Private Radio FM has
managed to create a set of „New
Listeners? for the medium.
5. The new radio stations which will come
in future they can have venture with the
college or university campuses. And can
play their station which will exclusively
provide with the information relating to
that university/college campus.
6. With the coming of the many more new
players in the radio industry each
channels can position themselves quite
different from others, like, if some station
is targeting the health conscious people
then their programming strategy will
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vary accordingly. And then it is easier for
the advertisers also to decide on which
channel to advertise.
7. Allowing private FM players to start
news and current affairs programs.
8. One has to constantly innovate, and that
is the challenge. Brand building is thus
much more difficult. At the same time,
we are very bullish, and gung-ho about
this whole enterprise.
9. Leaves huge scope for innovation in local
market.
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PESTEL ANALYSIS
There are many factors in the macro-environment that will effect the decisions of the managers
of any organization. Tax changes, new laws, trade barriers, demographic change and government
policy changes are all examples of macro change. To help analyze these factors managers can
categories them using the PESTEL model. This classification distinguishes between:
Political factors:
These refer to government policy such as the degree of intervention in the economy. What goods
and services does a government want to provide? To what extent does it believe in subsidising
firms? What are its priorities in terms of business support? Political decisions can impact on
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many vital areas for business such as the education of the workforce, the health of the nation and
the quality of the infrastructure of the economy such as the road and rail system.
For radio industry political factors are:
? To enter in the industry, high time entry fee has to be given.
? Up to 20 per cent FDI is allowed in Radio Industry subject to an approval from Foreign
Investment Promotion Board (FIPB) in addition to the guidelines notified by Ministry of
Information and Broadcasting.
? Up to 15% annual hike in the license fee.
? Only 10 year of license is valid.
Economic factors:
These include interest rates, taxation changes, economic growth, inflation and exchange rates. As
you will see throughout the "Foundations of Economics" book economic change can have a
major impact on a firm's behaviour.
For radio industry economic factors are:
? RJs are mainly attracted by package that has been offered to them by competitors.
? The employees of radio industry are mainly attracted by package that has been offered to
them by competitors.
Social factors:
Changes in social trends can impact on the demand for a firm's products and the availability and
willingness of individuals to work. In the UK, for example, the population has been ageing. This
has increased the costs for firms who are committed to pension payments for their employees
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because their staff is living longer. It also means some firms such as Ads have started to recruit
older employees to tap into this growing labour pool. The ageing population also has impact on
demand: for example, demand for sheltered accommodation and medicines have increased
whereas demand for toys is falling.
For radio industry social factors are:
? Demographic factors – there are different people with different age group.
? People have different likings with other people.
? TV is a family medium, while radio is a personal medium for entertainment.
Technological factors:
New technologies create new products and new processes. MP3 players, computer games, online
gambling and high definition TVs are all new markets created by technological advances. Online
shopping, bar coding and computer aided design are all improvements to the way we do business
as a result of better technology. Technology can reduce costs, improve quality and lead to
innovation. These developments can benefit consumers as well as the organisations providing the
products.
For radio industry, technological factors are:
? Internet radio is introduced.
? Modern equipment and highly technical transmitters are used.
Environmental factors:
Environmental factors include the weather and climate change. Changes in temperature can
impact on many industries including farming, tourism and insurance. With major climate
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changes occurring due to global warming and with greater environmental awareness this external
factor is becoming a significant issue for firms to consider. The growing desire to protect the
environment is having an impact on many industries such as the travel and transportation
industries (for example, more taxes being placed on air travel and the success of hybrid cars) and
the general move towards more environmentally friendly products and processes is affecting
demand patterns and creating business opportunities.
Legal factors:
These are related to the legal environment in which firms operate. In recent years in the UK there
have been many significant legal changes that have affected firms' behaviour. The introduction
of age discrimination and disability discrimination legislation, an increase in the minimum wage
and greater requirements for firms to recycle are examples of relatively recent laws that affect an
organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and
procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers
buying the good or using the service).
For radio industry, legal factors are:
? RJs are banned to speak on political and legal issues on air.
? No news or updates are allowed for private radio channel.
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Radio Stations in Ahmedabad:
Name Frequency Tag Line
Radio City 91.1 Whatte Fun
Red FM 93.5 Bajaate Raho!
My FM 94.3 Jiyo Dil Se!
Radio One 95.0 Station for the Fata-fat Generation
Radio Mirchi 98.3 It?s hot!
Radio City:
? Image: City Radio
? Target Group: 25-65
? Plays all kind of Hindi songs
? Plays songs from 1975 till date
? Not able to position well in market
? Needs to come with new ideas
Red FM:
? Image: Fun and Masti
? Target Group: 18-40
? Plays new Hindi songs and Songs of 90?s
? Plays songs from 1990 till date
? Providing tough competition to existing customers
? Coming with new ideas every time
My FM:
? Image: Personal FM
? Target group: 15-45
? Plays Hindi, English and Gujarati songs
? Plays songs from 1965 till date
? Wants to connect emotionally
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Radio One:
? Image: Fatafat Gen – X
? Target Group: 18-25
? Plays all types of Hindi songs
? Popular among youth
? Plays songs from 1975 till date
Radio Mirchi:
? Image: Hot
? Target Group: 18-60
? Oldest player
? Loyal listeners
? Plays all kind of Hindi songs
? RJ Dhwanit works as brand
? Plays songs from 1980 till date
Number of FM stations in India:
Radio Stations Stations (All over
India)
BIG FM 44
Red FM 35
Radio Mirchi 32
Radio City 20
My FM 17
Radio One 7
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SOUTH ASIA FM LIMITED
Introduction:
South Asia FM Ltd. is the owner of the Sun TV, Gemini TV, S FM and Red FM. Therefore the
structure of the Red FM is highly inspired by the South Asia FM Ltd. Red FM was earlier
known as S FM in entire country. But now in South only it is known as S FM and rest of the
country it is known by Red Fm.
Sun Network, India's largest media conglomerate has power packed Twenty
TV Channels with the reach of more than 95 million households in India. Sun
Network's channels can be viewed in 27 countries including U.S.A, Canada,
Europe, Singapore, Malaysia, Sri Lanka, South Africa, Australia and New
Zealand. It also has Forty Five FM Radio Stations, Two Daily News Papers -
Dinakaran the No.1 morning tamil daily news paper with sales of over 1.1
million copies a day, Tamil Murasu No.1 evening tamil daily, Four
Magazines, Sun Direct one of the largest DTH (Direct To Home Satellite TV service) service
provider in India having more than 4 million subscribers and Sun Pictures the film division of
Sun Network which produces / releases at least 8 movies every year.
The response to their programs and the viewership of our news has been phenomenal. The fact
that they touch so many hearts gives us great pleasure. Every single South Indian channel that
boasts of a No. 1 slot among its viewers belongs to the Sun Network. Millions of people all over
the world watch a channel of Sun Network. With every programme a sell-out, every single
transmission digitized, every serial a hit, for millions of viewers all over the world every day is
indeed a Sunday. Sun Network believes in giving you wholesome fare. Be it news or
entertainment, we are there first. If it is happening South of Vindhyas, its on Sun Network. And
you are a part of it.
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Awards:
As South Asia FM Ltd. is the owner of the Red FM, awards won by them will provide great
impact on Red FM.
? CNBC “Business Excellence Award” in 2005 – Kalanithi Maran, CMD, Sun Network
? Outstanding Businessman Award in the Entertainment and Information Sector in 2004 –
Kalanithi Maran, CMD, Sun Network
? World?s Young Achiever For Creativity in 1999 – Kalanithi Maran, CMD, Sun Network
? India?s Best Entrepreneur Award in 1999 – Kalanithi Maran, CMD, Sun Network
? Indian television Academy award for the Best Tamil TV Channel for the year 2001 – Sun TV
Network
? India Television Academy award for the Best Malayalam TV Channel for year 2001 – Surya
TV
? Indian Television Academy award for the best Kannada TV Channel for the year 2001 –
Udaya TV
? Indian Television Academy award for the best Telugu TV Channel for the year 2001 –
Gemini TV
Sun TV Channels:
Thanks to the invention of television and the increasing popularity of it, that has made our homes
a source of comfort as well as a source of knowledge. So much, for the effect created by the
small screen. Indians, especially the Southerners, - who represent a byword for „spice?, have
been the immediate ones to be taken in by the storm created by the small screen.
Being the first of its kind in Tamilnadu, Sun TV – as a regional channel created ripples in its
move. The ripples developed in to waves, continue to run endlessly – with the Sun TV ruling the
roost amongst many other competing satellite television channels.
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The Sun Network which believes in providing a right proportion of quality and quantity – has
been the one reason behind its tremendous success. Originally begun as a Tamil Satellite
Channel – the network has engulfed other South Indian states too, with an expansion of regional
channels in other languages including Telugu, Malayalam and Kannada.
The channels being – Sun TV, K TV, Sun Music, Sun News, Chutti TV, Adithya, Surya TV,
Kiran TV, Gemini TV, Teja TV, Gemini News, Gemini Music, Navvulu TV, Kushi TV, Udaya
TV, Ushe TV, Udaya 2, Udaya Movies, Udaya Varthegalu and Chintu TV. Besides channels
dedicated to programs with the main focus on entertainment, the News Channels is entirely
devoted to informative sources. The Sun Network also has the pride of owing an earth station
which enables the network to beam its programs directly to the satellite.
Red FM Radio:
“It has become our nature to occupy the first slot in whatever we do.” Sun Network?s foray into
FM radio is no exception either. Tamil?s first private FM stations – Suryan FM – from Chennai,
Coimbatore and Tirunelveli are way ahead to its competitors. Independent audience research
conducted by internationally renowned agency A. C. Nielson puts Suryan FM much beyond
competition.
The top slot is a result of a carefully planned thoroughly enjoyable, round – the – clock,
wholesome entertainment oriented package. The interactive element will encourage everyone to
make their own broadcasting. There will be substantial localization of content to retain the
regional flavor. The Frequency Modulation broadcasting will be through state – of – art, high
power transmitters to provide fine aural output. In order to maintain tonal fidelity and sound
clarity, Suryan FM has bid good bye to playing tapes and compact discs. The entire program
will be digitized and broadcast from a sensitive computer server, eliminating sound impurities
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and disturbances totally. The reach of Suryan FM stations is more than a 120 Km radius thereby
providing high quality entertainment for most of the neighboring districts.
Organization Structure of Red FM:
Station Head
Programming
Department
Sales
Department
Technical
Department
Programming
Head
Producers,
Copywriter &
Sound
Engineer
RJs
Sales
Head
Sales
Executives
Technical
Head
Maintenance
&
Computer
Engineer
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Advertisement on Red FM:
The marketing department is wholly responsible for the advertisement sales of Red FM stations.
With its team of dedicated professionals, it is today one of the highly appreciated professional
marketing unit among radio stations. Apart from offering the available advertisement time in the
most effective way, it offers the best follow up service.
The deals, that are made, are mutually beneficial and uniform. It functions with the motto –
professionalism, efficiency and dedicated service.
Rate Card & Packages
Starting Time
Ending Time
RODP rates
Rate
07:00 am
11:00 am
200
Denotes 10 sec Rate
11:00 am
17:00 pm
100
Denotes 10 sec Rate
17:00 pm
22:00 pm
200
Denotes 10 sec Rate
22:00 pm
07:00 am
100
Denotes 10 sec Rate
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Shows on Red FM:
Monday to Friday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show.
MORNING NO 1
Timing : 07:00 hrs to 10:00 hrs
RJ Name : Harshil & Rocky
Description : Breakfast show. The show voices the
opinion of the city and bajaos every local
and national issue. The show takes up
issues such as the police helpline not being
answered and goes down to resolving a
single individual's parking problem.
BAJATEY RAHO EXPRESS
Timing : 10:00 hrs to 17:00 hrs
RJ Name : Devanshi & Riya
Description : One consolidated band with more songs
and less links. Different jocks come in and
add spice to the show. This show is divided
into 3 subshows as follows
1. 10 AM - 12 PM : Show based on
Bollywood + Television
2. 12 PM - 2 PM : Request show
3. 2 PM - 5 PM : Campus based show
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GJ 935
Timing : 17:00 hrs to 20:00 hrs
RJ Name : Aditi
Description : Drive time show. This show is all about
current affairs and the jock gives funny
takes on it
SMS
Timing : 20:00 hrs to 21:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot.
ZOYA NAUGHTY NIGHTS
Timing : 21:00 hrs to 23:00 hrs
RJ Name : Zoya
Description :
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Saturday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show.
MORNING NO 1
Timing : 07:00 hrs to 10:00 hrs
RJ Name : Harshil & Rocky
Description : Breakfast show. The show voices the
opinion of the city and bajaos every local
and national issue. The show takes up
issues such as the police helpline not being
answered and goes down to resolving a
single individual's parking problem.
BAJATEY RAHO EXPRESS
Timing : 10:00 hrs to 17:00 hrs
RJ Name : Devanshi & Riya
Description : One consolidated band with more songs
and less links. Different jocks come in and
add spice to the show. This show is divided
into 3 subshows as follows
1. 10 AM - 12 PM : Show based on
Bollywood + Television
2. 12 PM - 2 PM : Request show
3. 2 PM - 5 PM : Campus based show
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GJ 935
Timing : 17:00 hrs to 20:00 hrs
RJ Name : Aditi
Description : Drive time show. This show is all about
current affairs and the jock gives funny
takes on it
SMS
Timing : 20:00 hrs to 21:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot.
TODU NIGHT
Timing : 21:00 hrs to 23:00 hrs
RJ Name :
Description : DJ show. 9 to 10 mins blocks of non-stop
remix songs and other hottest hits.
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Sunday:
DHOODHWALLA
Timing : 05:00 hrs to 07:00 hrs
RJ Name :
Description : Early Morning show, where the Jock talks
about interesting news which happened
the day before. It is a light and fun filled
early morning show
SUPERHITS 30
Timing : 08:00 hrs to 11:00 hrs
RJ Name :
Description : 30 hottest hits of the day
SACHIN & PINKU SHOW
Timing : 11:00 hrs to 13:00 hrs
RJ Name : Sachin & Pinku
Description : A complete brand of humour. RJs
comments on various VIPs of the society
like Police wallas, Bollywood actors,
Cricketers etc.,
BAAP KA RAAJ
Timing : 12:00 hrs to 14:00 hrs
RJ Name : Devanshi
Description : Listener's show. Jock takes calls from
listeners and dedicates their favourite song
to their loved ones
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RED FM SUPERSTAR
Timing : 14:00 hrs to 15:00 hrs
RJ Name : Harshil
Description : City's local celebrities would be profiled
and asked funny questions and funny
games like rapid fire would be played
SUPERHITS 30
Timing : 15:00 hrs to 18:00 hrs
RJ Name :
Description : Superhit Music show (SMS). 30 hottest hits
of the day served hot
MALISHKA CELEB SHOW
Timing : 18:00 hrs to 20:00 hrs
RJ Name : Malishka
Description : Bollywood celebrities would be profiled in
this show
RED REWIND
Timing : 20:00 hrs to 23:00 hrs
RJ Name : Riya
Description :
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SWOT Analysis for Red FM:
This is an organization specific analysis, which specifies the core Strengths, Weaknesses,
Opportunities and Threats, of a particular organization, with respect to the industry structure.
Strengths:
Taking Red FM in to consideration, the enthusiasm of the target audience is its main strength. It
only caters people coming within the age group of 18 to 40 years. The positioning of the channel
also justifies the same. All day long, only the newest songs are aired on Radio One. Positioned
as “Bajaate Raho”.
Radio is not trying to be everything for everyone, but it focuses on youth only. Red FM is very
clear in its positioning, which helps it in developing programs, campaigns and other activities
which supports its positioning and helps in serving to the target segment and increases its
popularity.
Weaknesses:
Red FM is still present in only 3 cities in the state, Ahmedabad, Baroda and Rajkot. So many
advertisers, who want to run their campaign simultaneously in multiple cities, would shift to
other FM station, which are having such presence.
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Opportunities:
There is no bar in creating creativity.
There is a huge scope of opportunities in gaining more advertising contracts. As, now majority
of product or services are delivered youth in mind, as youth is a major component, when it
comes to spending. Its unique positioning has made it open to opportunities from many
companies which are having similar positioning, i.e. youth.
Threats:
As far as radio is concerned, threat could be of two types:
Threat of competitors:
There are as many as 5 other FM channels aired in current scenario. And taking radio as a
medium, the switching behavior of the listeners is again a big threat. In radio, the listeners
always have a motivation to switch the station.
Threat of substitutes:
The advertising is the only source of revenues in radio industry. Hence, the other mediums like
newspapers, print media, television, etc. are potential, as well as direct threats to Red FM,
77 | P a g e
Listening to a Radio:
Now a days radio has become new way of entertainment. Before a decade, FM radio was gone
out of the market. But after the privatization of radio channels and therefore introduction of
private players has increase the listenership of radio channels. Radio is also considered as a
good advertising medium.
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India. The estimated worth of the industry was Rs 3
billion in 2005 and the spiraling growth is predicted to make the industry worth Rs. 12 billion
with almost three times the present number of FM stations.
Listening to Radio
Yes 149 99%
No 1 1%
Yes
99%
No
1%
Listening to Radio
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From above pie chart, we can observe that only 1 respondent says that he/she doesn?t listen to a
radio out of 150 samples. That means that 99% of respondents agrees that they listen to the radio
and only 1% respondent say that he/she does not listen to the radio.
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Preference of Radio Channel:
In Ahmedabad, there are total 8 radio channels are prevailing. Those channels are Micavaani,
Radio City, Red FM, My FM, Radio One, All India Radio, Radio Mirchi, Gyanvani. Among
this, Radio City, Red FM, My FM, Radio One, and Radio Mirchi are private channels.
Micavaani?s FM frequency is dedicated to MICA College, which has started its private radio
channel. Therefore respondents have many choices regarding to preference of listening any
radio channel.
Preference of Radio Channel
Selected Not Selected
Micavaani 1 148
Radio City 71 78
Red FM 105 44
My FM 61 88
Radio One 74 75
All India Radio 8 141
Radio Mirchi 93 56
Gyanvani 3 146
0
20
40
60
80
100
120
140
160
1
71
105
61
74
8
93
3
148
78
44
88
75
141
56
146
Preference of Radio Channel
Selected
Not Selected
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Above chart shows that most of respondents prefer Red FM and Radio Mirchi. Radio Mirchi is
oldest player in this private sector. In this way it has got advantage of first mover. As researcher
has chosen youth respondents between age group of 15 to 40 years, preference towards All India
Radio and Gyanvani is very less. In other way around, after privatization and Phase 1 and Phase
2 policy for radio industry, preference towards these radio channel has become very less.
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Reasons for Listening Radio:
TV is a family medium, while radio is personalized medium. People can listen to radio at any
time as background music provider. Radio also provides peaceful atmosphere and considered as
a time pass medium for any people. Radio also provides relaxation and some information. In
this way we may say that radio reduces loneliness from life of the people.
Background Music Provider:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 11 5.8 7.4 7.4
2
nd
preferable 29 15.3 19.5 26.8
3rd best preferable 24 12.6 16.1 43.0
4th best preferable 48 25.3 32.2 75.2
5th preferable 15 7.9 10.1 85.2
least preferable 22 11.6 14.8 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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7.33% respondents believe that radio is a most preferable background music provider. 19.33%
respondents believe that radio is 3
rd
preferable tool for background music provider. While 32%
respondents believe that radio is 4
th
preferable tool for background music provider. 10%
respondents react as it is less preferable reason for listening a radio. 14.67% people believe that
it is a least important reason for listening a radio. Researcher has found that mostly people don?t
want background music during serious work. They can allow background music during simple
task like driving, cooking etc during informal communication with respondents.
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Peaceful Atmosphere:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 22 11.6 14.8 14.8
2
nd
preferable 16 8.4 10.7 25.5
3rd preferable 25 13.2 16.8 42.3
4th preferable 40 21.1 26.8 69.1
5
th
preferable 32 16.8 21.5 90.6
least preferable 14 7.4 9.4 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From sample surveyed, the researcher can found that 14.67% respondents believe that radio is a
most preferable tool for providing peaceful atmosphere. 10.67% respondents believe that radio
is a preferable tool for providing peaceful atmosphere. While almost 27% people believe that
radio as a tool for providing peaceful atmosphere.
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Considered as a time pass:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 37 19.5 24.8 24.8
2
nd
preferable 26 13.7 17.4 42.3
3
rd
preferable 24 12.6 16.1 58.4
4th preferalbe 17 8.9 11.4 69.8
5
th
preferable 30 15.8 20.1 89.9
least preferable 15 7.9 10.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the sample surveyed, the researcher has found that almost 25% respondents mostly
preferred radio as time pass medium. While 20% respondents believe that radio is a less
preferable medium for time pass. From above chart, the researcher has found that there is not
much difference between 2
nd
and 3
rd
preference towards this tool.
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Provides Relaxation:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 48 25.3 32.2 32.2
2
nd
preferable 32 16.8 21.5 53.7
3rd preferable 23 12.1 15.4 69.1
4th preferable 18 9.5 12.1 81.2
5th preferable 16 8.4 10.7 91.9
least preferable 12 6.3 8.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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According to the survey, the researcher has found that 32% respondents believe that radio is a
most preferable tool for providing relaxation. While 21.33% respondents believe that radio is 2
nd
preferable tool for providing relaxation. 15.33% respondents believe that radio is a 3
rd
preferable
tool for providing relaxation. 4
th
preference, less preference and least preference toward radio as
relaxation provider is accordingly 12%, 10.67% and 8%.
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Provides Information:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 11 5.8 7.4 7.4
2
nd
preferable 27 14.2 18.1 25.5
3rd preferable 31 16.3 20.8 46.3
4th preferable 18 9.5 12.1 58.4
5
th
preferable 35 18.4 23.5 81.9
least preferable 27 14.2 18.1 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the survey, the researcher has found that only 7.4% respondents believe that their highly
preference towards listening radio due to it is providing information. While 18.1% respondents
secondly prefers radio for listening as it is providing information. 23.5% respondents say that
they don?t think that the main reason for listening radio is that it is providing information. In
fact, they believe that it is the less preferable reason for listening to a radio.
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No loneliness:
Frequency Percent Valid Percent
Cumulative
Percent
Valid most preferable 20 10.5 13.4 13.4
2
nd
preferable 21 11.1 14.1 27.5
3rd best preferable 22 11.6 14.8 42.3
4th best preferable 8 4.2 5.4 47.7
5th preferable 21 11.1 14.1 61.7
least preferable 57 30.0 38.3 100.0
Total 149 78.4 100.0
Missing 9.00 1 .5
System 40 21.1
Total 41 21.6
Total 190 100.0
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From the sample surveyed, the researcher has found that radio is tool that provides no loneliness
is the most preferable reason for only 13.4% respondents. While it is the least preferable reason
for listening to the radio for 38.3% respondents.
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Provides background music
Peaceful atmosphere
Considered as a timepass
Provides relaxation
Provides information
No loneliness
3.62
3.58
3.15
2.72
3.68
4.07
Mean Value
R
e
a
s
o
n
s
Reasons for Listening Radio
Reasons for Listening Radio Mean value
Provides background music 3.62
Peaceful atmosphere 3.58
Considered as a time pass 3.15
Provides relaxation 2.72
Provides information 3.68
No loneliness 4.07
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According to the chart and table, the researcher can conclude that the most preferable reason for
listening to a radio is that the radio is providing relaxation in this competitive era because its
mean value is lowest compare to other criteria. The second best preferable reason is it is
considered as a time pass for most of the listeners. According to the survey, respondents listen to
the radio due to radio is providing peaceful atmosphere. Radio also provides background music
while doing other works and it is the forth preferable reason. The least two reasons for listening
to the radio are that it provides information and provides loneliness.
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Time Duration for Listening to the Radio:
Radio is one medium that reaches 99%of the population in India and uniformly cuts across all
SEC?s and age groups. Radio industry in India, which was keeping a low profile in India for
more than half a century is tuning the right frequencies and catching peoples? attention. Opening
up of the segment to private players, changing fee policy etc has prompted resurgence in the
radio industry. The change in policies has prompted close to fifty companies to enter this
segment and compete in 87 locations across India.
Old media don?t? die! They just bounce back in new avatars. Therefore now people listen to the
radio for become relax.
Time Duration
Less than 1 hour 72
1-3 hours 51
3-5 hours 18
More than 5 hours 8
48%
34%
12%
6%
Time Duration
Less than 1 hour 1-3 hours 3-5 hours More than 5 hours
95 | P a g e
From the conducted survey, the researcher has come to know that 48% respondents listen to the
radio for only less than 1 hour. While 34% respondents listen to the radio for one to three hours
in a day. 12% of the respondents agree on the time duration of three to five hours. Only 6% of
respondents listen to the radio for more than five hours. As per the informal communication of
the researcher with respondents, she came to know that people can not listen to the radio for
longer duration because it provides boredom if there is no work to do and only listening to the
radio.
Time Duration With Regards To Profession:
Profession
Total
service business professional homemaker student self employed
>1hour 15 7 12 10 20 8 72
1-3hour 5 5 4 5 24 8 51
3-5hour 0 4 3 3 6 2 18