Coming: 336 radio channels in 90 cities. At least half a dozen foreign newspapers and magazines at your doorstep. Every other day you hear of the launch of yet another television channel. And 3G technology is threatening to happen anytime.
With the government announcing the second phase of the FM radio policy – stations proposed in 90 cities – after declaring a revenue-sharing regime with broadcasters, it is expected that a radio revolution will happen in India in less than a year’s time.
“By next I-Day, the radio market would have seen phenomenal growth, especially in sub-metros and smaller towns,” Abraham Thomas, COO, Red FM, said, adding, “New players are expected to come and most existing players would be looking to expand their presence to multiple locations.”
Agrees AP Parigi, CEO, Radio Mirchi, “The new FM policy has the potential to create a revolution comparable only to the revolution brought in by Maruti to the automobile industry in India.”
But given the experience of Phase I, when many of the frequencies made available did not attract any bidding, will expectations this time live up to the hype created around them? Consenting with this concern, Parigi said, “There are some infirmities in the policy, which we will discuss with the government within a week. For instance, the present policy does not allow networking between a station in a Category A city and a station in Category C or D. This is not a very industry-friendly proposition.”
Commercial viability of FM stations in non-metro cities remains a major concern for broadcasters. According to Parigi, the present exorbitantly high music royalty rates were taking a toll on broadcasters, and this problem would be more burdensome for non-metro cities, where revenue generation would take time to pick up.
However, Abraham felt otherwise. He saw it as an opportunity, where radio could now serve the needs of smaller/medium advertisers by providing them a cost-effective medium.
Agreeing with him, GM (Delhi), Mindshare, Sunder Raman said, “Not only the smaller advertisers, even national advertisers will love to tap this market. It will give them an opportunity to reach out to different consumer segments.”
As for allowing FM channels to broadcast news, the industry unanimously says ‘Yes’. And they are ready with the reason. “The effectiveness of FM channels as a potent tool to reach out to people was proved during the Mumbai deluge, when all other media turned non-functional except FM channels,” pointed out Parigi.
TV channels: How much is too much?
By August 2006, Rajdeep Sardesai will be back on the boob tube, this time with India Broadcast News. But he won’t be alone. There are many in the line-up – Times Now, Janmat, new channels from NDTV, Aaj Tak, S1 to count a few. Broadcasters and media planners just don’t feel enough is enough.
“I don’t think it will be a cluttered market,” insisted Peter Mukerjea, STAR India CEO. “It will be rather an expanded market… With the DTH platform spreading its wings, things will be more organised and the quality will improve,” he added.
Agreed Ajay Chacko, Head of Marketing, CNBC, “We expect viewership, especially news viewership, to grow significantly in coming months. In fact, the success of the new channels rests more on this expanding viewership.”
Ashish Kaul, VP, Corporate Brand Development Group, Zee Telefilms, observed, “Yes, many channels are coming up, but the basic fact is that there will always be a place at the top. It just takes that one dramatic programme with innovative promotion to break the clutter.”
Mindshare’s Raman felt that in such a scenario, it would be a challenge for broadcasters and advertisers to catch consumers’ attention. “The key challenge for broadcasters will be to find niche audiences and cater to their needs.”
According to Kaul, the next 12 months would be a “health check/shake-out situation” for television channels. “It should be boom time for regional and children’s channels as they have been around for over a year now. It’s technology leapfrog for Indians, and I am sure most of the companies will make best use of it. Vertically integrated companies will be the biggest beneficiaries.”
In such a scenario, what should be the USP of a television channel – better programming or unique positioning? Mukerjea felt that there was no choice between the two, both complemented each other and one couldn’t ignore either.
Kaul, however, disagreed with this and said, “Given a choice to run a channel, I will bet my money on programming. Positioning only supports programming though many MBAs will disagree.”
When asked about the future of reality TV in India, he said that this category would always be a niche one. “People always watch TV for entertainment, enough reality programming is taken care of by news channels.”
Agreeing with him, CNBC’s Chacko said, “I don’t think they have a great future because news is all about reality content and audience still love hardcore news, where I think the real growth lies.”
Sometime back Mukerjea had talked about ‘anywhere TV’ and ‘mobisodes’ happening in India. Declining to comment on the level of preparation of STAR in this direction, Mukerjea stuck to his view that it might happen any time in the future.
“Experimentation will happen towards this end,” Raman said, adding “The USP will be to reach the consumer when he wants, not when the broadcaster wishes.”
About Internet TV, Mukerjea felt that it might happen in 24 to 36 months, rather than in the next 12 months. Raman is a bit skeptical about the sort of revolution 3G technology could bring to the media at this moment. “First of all, there has to be a drive to educate consumers about this new technology,” he maintained.
When asked whether there would be more mergers and acquisitions happening in a period of one year, like the Sony-SAB one, Raman seemed quite upbeat. “I am quite certain about this. This will happen sooner than later,” he affirmed.
Give us this day our daily newspapers
How about getting ‘The Independent’ at your doorstep along with ‘The Times of India’ on the next I-Day? Quite possible. In fact, ‘Wall Street Journal’, ‘Financial Times’, ‘Fortune’, ‘Nature’, ‘The Economist’, and ‘BusinessWeek’ are all are eyeing India.
However, media planners seem to be rather unenthusiastic about their launch. “Only the top end of the business community may be interested in these launches. Otherwise it won’t affect the media matrix of the country,” felt Mindshare’s Raman.
“Even the aim of these foreign entities at present is to establish their brand in a growing market like India, so that when government allows these players to come out with local editions, they could easily tap the local market. Until then, it’s incubation period for all of them,” he said.
On the domestic front, Raman foresaw major players invading each other’s dominant territories and maintained that the Mumbai newspaper war was an indication of things to come. “More media houses, from both print and television, will follow the IPO route to tap the market,”
The 12 months to the next Independence Day may not completely revolutionise the media sector, but certainly it will be more than an eventful year for everybody related to the media industry.
As Raman put it, “Ultimately there will be more choice with the consumer. At the end of the day he is the king.”