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TRAI initiates consultation process for credible Radio ratings system

25-April-2016
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TRAI initiates consultation process for credible Radio ratings system

In order to prescribe a framework for radio rating system in India that is conducive to growth, forward looking, and addresses the concerns of the stakeholders while protecting the interests of the consumers, the Telecom Regulatory Authority of India (TRAI) has suo-motu initiated a consultation process seeking comments/views of stakeholders on the issues related to radio audience measurement and ratings in India. The main objectives of the consultation paper is to ensure growth of radio broadcasting sector, ensure transparency in radio audience measurement & ratings and ensure greater diversity and better quality content.

A consultation paper released by TRAI states that the number of people listening to radio is expected to grow further after completion of phase-III of the FM radio expansion activity. This will further enhance the reach of advertisers and as a result the overall expenditure on radio advertisements is likely to increase giving a further boost to radio industry.

According to TRAI, the revenue of radio broadcasting sector in 2014 was Rs 1,720 crore, with a year-on year increase of 18% from 2013 to 2014, driven by increasing popularity of radio in smaller towns and cities. TRAI estimates that the radio broadcasting sector revenues will grow at a CAGR of 18 % to reach Rs 3,950 crore by 2019.

TRAI has also stated that the total advertisement revenue of Media and Entertainment (M&E) industry was Rs 41,400 crore in 2014, contributing approximately 31% to the total M&E revenues. It estimates the advertisement revenue to grow at a CAGR of 14.5% to reach Rs 81,600 crore by 2019. Presently television and print media sectors corner the maximum advertisement revenue (approximately 80% of the total revenues) spend in India. Though the radio broadcasting sector presently accounted for only 4% of total advertisement revenue in 2014, it is however expected to garner 5% of the total advertisement revenues by 2019.

The consultation paper further suggests that there is a need for radio audience measurement which can give a sense of the popularity of a channel or a program to the advertisers and advertising agencies.  This will assist them in selecting the right channel or program at the right time to reach the target listeners. Further, it will also aid the radio channels in improving their programs for attracting more listeners.

As per TRAI, the task of allocating resources for advertisements by advertisers and advertising agencies has become increasingly challenging with the growth in the number of FM radio channels and vastly increased variety of programs available. Advertising expenditures are typically guided by audience measurement in addition to other factors such as cost of reaching various audience segments, advertisement placements and program schedules.

Advertisement revenues of the radio broadcasting sector are directly linked to listenership of radio channels. In case of newspapers and other print media, audience measurement is based on the number of copies sold. This physical count is however not possible in the case of radio and television sectors, wherein a different form of audience measurement is necessitated.

 In case of television, subsequent to TRAI’s recommendations on guidelines for Television Rating Agencies dated 11th September 2013, MIB issued guidelines for Television Rating Agencies and an industry body --Broadcasting Audience Research Council (BARC) was entrusted with the task of conducting TV audience measurement.

Similarly for the radio broadcasting sector, the Radio Audience Measurement (RAM), which is an indicator of the number of listeners to a radio channels, has become essential.

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