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Competition catches up with AIR FM, private players eat into ad bookings

30-October-2002
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Competition catches up with AIR FM, private players eat into ad bookings

In the past six months or so since private FM radio players began their operations in Mumbai, All India Radio (AIR) FM has been feeling the heat. According to official estimates, advertisement bookings on AIR FM in Mumbai are down by 50 per cent as private players have started eating into the pie.

AIR FM stations in other metros are yet to experience the competition, as private FM broadcasting has not taken off there. In April 2002, private FM broadcasting started in Mumbai with five players in the market. Although private FM radio licensees in Delhi, Chennai and Kolkata were scheduled to start operations by August 29, 2002, the proposed launch in these circles did not take off as scheduled.

Even as AIR is aware of the competition in the FM sphere, it cannot follow the footsteps of the private players. While private FM players in Mumbai and other cities including Bangalore, Lucknow and Indore are offering dime a dozen reward schemes to their listeners, AIR is not willing to do the same.

Negotiation of rates is another reason why private FM stations are more successful in attracting ads, says AIR source. The ad card of a private FM player may show Rs 3,000 per 10 seconds as the official rate, but the rate can eventually come down drastically to even a few hundred rupees, following haggling with advertisers. In contrast, AIR has fixed rate cards and is not in a position to negotiate with advertisers.

The steps being planned by AIR to brush away the private FM blues include advertisement barter with newspapers and new marketing strategy. But, there won’t be any super prizes at AIR FM for its listeners.

While private FM is a fairly new phenomenon, television has for several years been cutting into the revenues of AIR. In Mumbai and Delhi, for instance, which have two AIR FM stations each, FM 2 does not manage to get many ads. Delhi AIR FM 1 revenues were put at Rs 10 crore last year, while Bangalore garnered only about Rs 5-6 lakh. Total revenues from AIR FM and Vividh Bharati stood at Rs 42 crore last year.

As far as attractive time band or primetime on radio is concerned, it is 8 to 10 a.m. and then 5.30 p.m. to 8.30 p.m. People travelling by car form the main chunk of listeners in this band. And, 8.30 p.m. onwards, TV soaps take over, both in terms of viewership and ad pull.

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