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WorldSpace to break even by 2006

01-January-2004
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WorldSpace to break even by 2006

Having moved from its introductory free service to the subscription-based model, WorldSpace, India’s first and only direct satellite-to-receiver digital radio broadcaster, is well into its investment phase. While strengthening its national presence and forming tie-ups with Indian channels are on the agenda for the coming year, the company is aiming to break-even by 2006.

“Though we entered India on a no pay model, it was not our final business structure. This transition from free to paid has been carried out gradually and only after several market testing exercises. The reaction has been very encouraging. In fact, several customers were worried that if the free service continued, maybe our standards would drop,” says Bharath Chari, Head – Consumer Audio Business at WorldSpace.

The company currently offers 32 channels, eight of which are in Hindi, two in Tamil and one in Malayalam. New channels to be added in 2004 will include Telegu and Kannada, besides a possible link up with Aaj Tak or NDTV to offer national current affairs content.

WorldSpace, which is currently in the investment phase, has sold 50,000 receivers until date. The coming year will be a crucial one, both in terms of expanding subscriber base and establishing a national presence. Dismissing any competition the company may be facing from FM stations, Chari says, “WorldSpace and FM stations are two different entities. We differ not only in our content, but also its treatment. While FM stations offer a very local flavour, we cater to very specific genres and tastes. Our businesses don’t overlap and there is no question of any FM station being our competitor.”

The company has devised a marketing strategy to achieve its expansion plans. According to Chari, advertising a product like WorldSpace is tricky, as it is difficult to describe. The company has thus ruled out conventional mediums like television. Though its print campaigns will continue to boost the sales of its receivers, it is planning to explore new avenues by going online. Chari believes that experiential advertising works best in such a situation and the company is planning to enter cross promos with organizations and restaurants that are already playing WorldSpace.

With a separate channel for almost every genre of music, WorldSpace is targeted at the young working adult with distinct music preferences. With plans to break even by 2006, the company is hoping to add 150-200,000 new customers by end 2004.

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