Time to tune in folks! Here are Ten reasons to invest in Radio

1. Radio has a huge market: It will be worth not less than Rs 1,300 crore by 2008. Today the share of radio in the Rs 12,000-crore advertising market (adspends) is not more than 2% which is much lower than the global average of 6-7%. Even in Sri Lanka it is a huge 14%. With over 600 stations (250 All India Radio and 350 private) in 100-odd cities up and running by 2007, adspends growing at the rate of 20% to Rs 20,000 crore, and the radio pie taking on international shape and size, the market size for radio is certainly going to meet any analyst’s forecast.

2.People love Radio: They see it as a friend, a companion, someone they don’t mind being there while cooking, reading, driving, surfing, bathing or whatever else. There’s nothing that you need to stop doing to listen to radio. But one can’t say the same for watching television or reading newspaper. People love radio’s anytime, anywhere, personal, emotional, interactive nature. Not surprising then, people on an average spend 2½ hours listening to radio every day in India. (Radio Medium - Spiralling popularity, growth in time spent: An IRS ‘03-04 & ILT ‘04 analysis. exchange4media.com, July 27, 2004). In the UK, the US and several other advanced societies, despite many more media options, this daily average is around 3½ hours on weekdays and 5 hours over weekends.

3. Radio is Marketers’ Favourite Medium: That’s because they can buy the frequency and selectivity – in terms of audience, day-part, place of listening, and the station itself – and that too at a cost no other medium can match. They are aware of the fact that this is the only medium that works for their brand at and out of home (workplace, cars, restaurants, shops). They know how the intimate and interactive character of the medium helps them speak with their target audience on a one-to-one basis. They can think of “on air” radio promotions that don’t cost them a bomb. And they can think of producing a radio commercial with Pamela Anderson on an Australian beach without worrying about her dates or the airfares or the prohibitive costs of the Australian film units, or have a commercial with Amitabh Bachchan’s voice without paying him a single rupee!

4. Radio is Retail Advertiser’s Dream Medium: When Pradeep Guha, till recently the Indian Newspaper Society (INS) President, in his address to the 66th AGM of the society in Bangalore on September 30, 2005, said that the impending expansion of FM radio could bring before the print media “unforeseeable challenges”, he was probably referring to the large chunk of retail advertising that will divert to radio channels in small and big towns. The reason for that would certainly not only be the low cost of radio advertising but also the identification that listeners and local advertisers have with the channel. The phenomenon is similar to the recent spate of city-based supplements, magazines and guides.

5. Radio means Fast Returns: Compared to any other medium, radio comes with the lowest cost of entry, which in strict SWOT terms means a ‘Threat’ but with the spectrum being limited and structured, Radio is actually a huge ‘Opportunity’. Investing in radio is like investing in land, a commodity you cannot create or add or grow. India’s FM radio broadcasting band lies between 88 and 108 MHz. International practice designates this radio spectrum as suitable for FM broadcasting. Out of this, 100 to 108 MHz is informally reserved for All India Radio and 88 to 90 MHz for community radio. The only part of the band available to private operators is 91 to 99 MHz. That explains the small number of frequencies being offered in each town and indicates assured appreciation in value. Couple this with the flexibility of capital and operating expenses involved—and you can develop a business plan to suit your business and strategic needs.

6. Radio is Simple and Easy to Start Up: With a better match between the number of songs in each category and the number of different clocks, there can be a flow where the songs get exposed in different positions within the hour. With a setup of 5, 7 and 9 currents you can be very successful with 4 different sets of music sweeps where these current songs can appear in both first, second, third and fourth quarter hour.

7. Radio goes well other Media and Businesses: There’s a great synergy in operating radio and other media. Most customers buy more than one medium. Since radio goes with almost any other medium, it makes sense for a media owner to invest in radio and to sell the two or more products to its customers. Invariably, there’s a strategic need to get into radio: to protect one’s share of audience and revenue in a given market or audience category. Of course, you don’t need to be in the media business to run a radio station. It’s a perfect standalone business and can easily be run in conjunction with any other business.

8. Radio is Today’s Medium: India is one the few countries where private radio has come after television. That makes it look and feel like a medium for today’s generation. Brands being advertised are testimony to that. Likewise, filmmakers showing radio jocks as the happening guys in today’s society – remember Shah Rukh Khan in “Dil Se” and Priety Zinta in “Salaam Namaste”? With almost all cars, all music systems and a substantial number of cellphones coming equipped with an FM receiver and with no costs involved in subscribing to the medium, the stations can achieve a reach no other medium can match.

9. Radio is Tomorrow’s Medium: Nowhere in the world has listening to radio ever gone out of fashion. It has not been impacted by the growth of other media. In India, it is not going to be any different – particularly, given the emotional bond generations have had with radio.

10. Radio is Fun: Anyone in business enjoys running it too. Almost like films. After all, radio is about people, music, breaking news (nothing can beat its speed), setting new trends. It’s one non-spot party. So, why not have some fun while making some very good money? But don’t forget the last date for applying for a licence – it’s November 7, 2005.