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FM players to account for 75 per cent of total ad revenue by March 2006: Study

26-December-2001
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FM players to account for 75 per cent of total ad revenue by March 2006: Study

According to a research report of ANZ Investment Bank, private sector FM players may end up grabbing as much as half of the growing radio adspend pie by March 2003. The new players are projected to account for a whopping 75 per cent of the total radio ad revenues by March 2006.The loser as expected would be All India Radio (AIR).

If the industry estimates is to be believed, radio accounts for around 2 per cent of the total adspend across media in the country (currently estimated at Rs 10,000 crores). As per ANZ estimates, this is expected to sharply increase to 5 per cent by 2007.

However, this is still way below the 13 per cent adspend captured by radio advertising in mature markets like the US which has nearly 14,000 radio stations against AIR’s 200. Spain’s radio adspend accounts for 9.10 per cent of the total adspend while Australia’s is 8.90 per cent. In France, it is a lower 6.5 per cent while in Japan radio accounts for 5 per cent.

The size of radio advertising in the metros is projected to increase from Rs 100 crores in the year 2000 to Rs 590 crores in 2005. Major players in the metros are likely to be Bennett Coleman & Co (12 stations), Music Broadcast of Star-Ispat (6 stations) and Living Media (3 stations).

Other FM licensees include Vertex Broadcasting of the Dabur group (four stations), Mid-Day (three stations), Millennium Broadcast (three stations) and Udaya TV (one station).

According to the study, Delhi, Mumbai and Kolkata is expected to garner over 70 per cent of the radio market in the initial years, given the demographic profile of these cities.

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