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Radio makers ride the FM wave

27-July-2004
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Radio makers ride the FM wave

While private FM radio operators may be reeling under huge losses, good times seem to be back for standalone radio manufacturers with the launch of 22 new stations across the metros.

The demand for standalone radios that had reached a historical low with the availability of low cost colour televisions is on a revival mode. The segment saw a growth of 8 per cent in 2003, and is expected to grow at a similar rate this year as well.

According to Ms Richa Singh, Brand Manager, Portable Audios and Philips Nike range, "FM channels have definitely reinvented radios in urban India.''

While the radio market is predominantly grey, FM channels have lent a helping hand to players in the organised sector. In the grey market, the smaller the size of the set, the greater is the demand - especially for pencil or torch shaped ones.

"Prices ranged from Rs 75 to Rs 100 - the sets were primarily Chinese or Korean which looked good but did not last long. The sales panned across various economic groups given the affordability. So, a fruit seller and a college goer owned similar sets," said Ms Gita Ram, General Manager-Qualitative Research, Synovate, a market research company.

The aggressive pricing strategy of the unorganised sector prompted key manufacturers like Philips to launch a model for Rs 250. This became popular and fared well, said Philips' Ms Singh. In fact, the company is contemplating to bring out a new model with a lower price tag soon.

While music and music-based shows form a major part of the content aired on radio channels, as in the colour TV industry, cricket seems to be a major driver for sales of radio sets, followed by news.

"Cricket matches and key cricket events has helped boost sales," said Ms Ram. She added that in this case, there is not much difference in ownership patterns between urban and rural India.

"Percentage ownership in rural India is 54 per cent, 60 per cent in urban India and both together the ownership is 57 per cent. Ownership of radio sets with FM is obviously higher in urban India vis-à-vis rural India," said Ms Ram.

Radio manufacturers expect that the opening up of airwaves to more operators would boost sales of standalone sets.

The second phase of FM radio privatisation has not yet taken off with the Government still working out measures to liberalise the sector.

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