As the year 2016 comes to an end, Prashant Panday, MD & CEO, ENIL shares the key highlights and trends that fuelled the growth of the FM radio industry.
FM radio is on a roll. Finally! After a wait of more than five years, the first batch of the third phase of auctions finally took place in July-Sept2015. As many as 98 frequencies were successfully sold off by the government. Eight existing broadcasters added 91 (of these 98) frequencies to their network, while five new players entered the radio sector for the first time. At the same time, 25 incumbents decided not to,or were unable to,win licenses and expand further. The second batch of Phase-3 auctions has just concluded and another 66 licenses have been allotted to bidders. With this, the total number of stations across will soon rise to more than 400. More auction rounds within Phase-3 are planned in the months ahead. Clearly, Phase-3 auctions have charged up the business like nothing else could possibly have!
FY16 was also a great year from a revenue perspective. Radio grew by 14%. Given the current state of the Indian economy, this is a hugely creditable achievement. Radio has been growing faster than all other traditional media for the last 3-4 years now. Having crossed Rs 2500 crore (net, including AIR), the overall FM industry today has a share of 5% of the overall media industry.
2016 saw Zee TV acquiring Big FM after months of speculation and denials. With Jagran already having acquired Radio City last year, HT having acquired Noble Broadcasting in Chennai and ENIL in the process of acquiring TV Today’s radio business, the radio business is now mostly housed inside large media groups. Today, all the major radio brands – Mirchi, Red, Big, City – and the relatively smaller ones – Fever, My,Hello, Mango, Club, Chocolate, Tadka – are all within the folds of large media companies. With more and more radio brands getting listed – Mirchi, City (soon), My (via DB Corp), Fever (via HT Media), parts of Red FM (via Sun TV) and Radio One – access to funds has increased. This huge investor interest also shows the big strides that radio has made in just the last decade. This improvement in funding is fuelling the growth of FM radio.
The power of radio continues to grow. Over the numerous market visits I have personally undertaken all over the country in the last 3 months meeting nearly a thousand people in the process, one thing that comes out clearly is that people– especially college kids – love music and FM radio. They love their favorite RJs, their favorite “characters”, the pranks, the information updates, the traffic beats, the stories, the movie reviews and the celebs. But what they appreciate most is the curation of music that FM radio stations do for them. In an increasingly digital world, where millions of songs are available to app users on tap, knowing the right music to play becomes a challenge. Music experts in radio stations curate music and help listeners choose music like no algorithm can! When it comes to music discovery – coming to know of new music – curation is even more important as sifting the best out of a whole bunch of mediocre stuff is difficult if not impossible on music apps. Film producers and music directors know this. Not surprising then that almost every week, they storm into radio studios peddling their latest fare!
In addition to college kids, the other segment that totally belongs to FM radio is the driving audiences. A city like Delhi has 25 lac cars. That’s at least 50 lac potential listeners, most of whom (our research shows 80-85% of them) tune into FM radio. Which advertiser can afford to ignore this most premium set of audiences in the most wealthy cities? With car sales growing rapidly, and with traffic jams increasing faster than the queues outside ATM machines (!), the listenership of FM radio and the demand for advertising inventory is increasing rapidly.
While there is so much going for radio, there is still a big grouse I have. We need a government that frees up spectrum and launches hundreds of stations in our bigger cities. We need at least 40 stations in Mumbai, Delhi, Bangalore and other metros. Why should Colombo have so many stations and we so few? We need license fees to come down, so that we can offer more niche content. People want Marathi stations in Mumbai and Punjabi in Delhi. People want Tamil and Telugu and Bengali stations in the metros. Why should Tamil stations be available in Singapore but not in Mumbai or Delhi???? The government really needs to open its mind up. Fortunately, the PM is a big believer in radio. With his “Mann ki Baat”, he has energized the medium like his demonetization initiative has energized PayTM (!). We hope and pray now that his government sees the large potential that FM radio offers – for entertaining people, generating jobs, collecting license fees, and most importantly for communicating with all sections of the society like no other medium can – and moves towards allowing many more stations to become available in our bigger cities.
(The author is MD & CEO, ENIL)
Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com