The Resurgence of Radio in India

Nobody asks for radio and nobody gives a damn. - Prasoon Joshi, Creative Director of leading advertising agency, O&M, in September 2001. Radio wont die; even today, the reach of radio is more than that of television. In rural India, every individual has a transistor. And you can listen to the radio even when you are tilling the soil. You cant do that with TV. - Vinod Sharma, founding member and Ex-President, RAPA [1], September 10, 2001. THE RE-ENTRY OF PRIVATE PLAYERS In July 1999, the Government of India decided to allow private players to enter the FM radiobroadcasting sector. It planned to offer ten-year licenses to private players in 40 cities across India. These private broadcasters would be permitted to offer only music, education and entertainment-based programs, not news or current affairs programs. Hailing the governments decision as a historic one, analysts said this would change the future of Indian radio broadcasting. They added that with this development, private companies would have better control of their respective radio stations, unlike in the mid-1990s, when the private players were allowed to offer only programming content to the FM stations owned by the government operated All India Radio (AIR).

Following the announcement, many companies bid for licenses to operate in various cities. The first private FM radio station Radio City began functioning in July 2001 in Bangalore, Karnataka. By October 2001, sixteen companies were issued licenses to operate private FM radio stations. Some of these were Entertainment Network, India FM Radio, Vertex Broadcasting, Radio Today, Sun TV, Music Broadcast, Millennium Broadcast, Hitz FM Radio India, Udaya TV, Radio Mid-Day West India, Mid-day Broadcasting South, and Mid-Day Radio North. However, many industry observers were skeptical about the survival of all these private players. They said that radio broadcasts were not popular and that industry ad revenues had been very low throughout the 1990s. Advertising revenues were as low as Rs 740 million in the financial year 2000-01, amounting to less than 1% of the total advertising expenditure. According to Prasoon Joshi, The quality of radio advertising here is pathetic. Today, when an agency plans spends, the bulk of the money goes to television. Then come outdoor media, print, and maybe mailers. Radio comes last. BACKGROUND NOTE Radio has had a tremendous impact on society in the 20th century. Though radio was invented during the late 1890s, public radio services offering information and entertainment content started only in the mid 1910s, first in the US and then in European countries (See Exhibit I for a note on how a radio works). World War I hampered public radio services to some extent, but at the end of the war, the business picked up momentum. Advertising on the radio started first in the US in 1920; this marked the beginning of

commercial radio services. Radio broadcasting stations provided scheduled programs of lectures, news bulletins and other recreational and informative material. On account of the growing popularity of such radio programs, the demand for commercial airtime increased heavily by 1923, making radio broadcasting a profitable business. The far-reaching capability and immediacy of radio made it very popular across the world by the late 1920s (Refer Exhibit II for a brief note on the history of radio worldwide). In India, radio broadcasting started in 1927 at Mumbai and Kolkata with two privately owned transmission stations. In 1930, the government acquired these stations and started operating them under the Indian Broadcasting Service. This service was later renamed AIR in 1936 and has since been operated as an independent Government department. From 1957, the radio service also came to be referred to as Akashvani. [2] Vividh Bharati, AIRs main entertainment channel, was started in the 1960s. Commercial broadcasting was first introduced on Indian radio in 1967. In the mid-1970s, AIR started offering sponsored programs. Radios commercials started during the early 1980s on its primary channel Vividh Bharati and were extended to other channels by the mid-1980s. All these initiatives increased the popularity of radio in the country and also generated huge revenues for AIR (from sponsorship fees and commercial advertisements). AIR also operated an External Services Division (ESD) that broadcasted programs in 24 languages (16 foreign and 8 Indian, languages).

RAPA (Radio and TV Advertising Practitioners Association of India Ltd) is a Mumbaibased body that addresses issues related to the fields of radio and television advertising in India. Every year RAPA gives away awards to directors, scriptwriters, artists, technicians, adfilm producers, radio/TV programs, music directors and advertising agencies.
[1] [2]

A Hindi word, literally meaning 'sound from the skies.'

BACKGROUND NOTE These programs generally consisted of commentaries on current affairs; review of Indian press coverage; news bulletins; talk shows on socio-economic, cultural, historical and political subjects; and classical, folk and popular music from all corners of the country. The major ESD services included the General Overseas Service, Hindi Service and Urdu Service. Though FM radio had long been popular in Western countries, AIR started offering FM channels only in 1977.

The first FM station was started in Chennai. By the 1980s, radio had become a part of almost every household in India, enjoying the patronage of millions of people across the country. Its programs included situational comedies, suspense thrillers, film music based programs, dramas, and discussions and commentaries on health, cooking, mythology, and beauty tips. AIR also offered current affairs programs and talk shows on current issues covering politics, science, technology, education and social problems. It also conducted general knowledge competitions for students. Radio news broadcasts attracted hordes of listeners across the country. AIR popularized sports (particularly cricket) by broadcasting live commentaries of matches

played in India and abroad. It conducted various music and drama competitions in order to discover and encourage talented artists. Due to its immense popularity, extensive reach, easy accessibility and cost effectiveness, radio became a primary communication and entertainment medium during the 1970s and 1980s attracting listeners as well as advertisers. However, from the mid-1980s, television (TV) began to lure away radio listeners. The success of TV serials like Ramayan, Hum Log, Buniyaad and Mahabharat further contributed to radios downfall. These serials attracted millions of audiences across the country, resulting in a shift of loyalties from radio to television. As TV audiences grew, advertisers began allocating larger sums for TV advertising. Tapan Pal (Pal), President and CEO of ZenithMedia, summed up the issue: In the golden days of radio, clients such as Dunlop assigned as much as 15-20% of its spends on radio. The industry spend was in the vicinity of 7-8%. Today, it is down to less than 1%. By the early 1990s, in most metros, radio existed mostly as a part of two-in-one systems (cassette recorders). Analysts felt that the governments restrictive policies also contributed to radios downfall to some extent. They felt that even with an extensive reach of over 98%, the penetration of the radio network remained stagnant in the 1990s (Refer Exhibit III for the Indian radio market) because the government failed to reform its broadcasting policies. Lack of good scripts and innovation in programming were also affected the quality of radio programs. Unlike a TV program or commercial that depended mainly on technology and special effects such as lighting, cinematography and camera angles, radio programs depended only on writing (script). Analysts also blamed the Indian advertising agencies for the decreasing ad spends on radio. They felt that the advertising agencies failed in exploiting the potential of radio to its fullest and simply treated it as a remainder medium. On the other hand, advertisers blamed the lack of creativity in radio programming as compared to TV. The absence of a monitoring system (to record the level of response to programs) for radio programs that could provide agencies with information to approach clients (to recommend radio) also contributed to radios downfall. In 1993, the government allowed private players in the FM sector by permitting them to take blocks (i.e. time slots to offer their programming content) on AIR, for FM transmissions. The purpose of this move was to earn revenues for AIR (by way of license fees) and provide more variety for listeners. The major players in the private FM market during that period were Times FM (of the media giant Bennett Coleman & Co) and Radio Mid-Day (of the Midday Multimedia group). The programs offered by these private stations were much more listener-friendly and innovative than AIRs programs. As a result, the channels became very successful (in the mid1990s) and attracted high advertising revenues. By 1997-98, the private FM business in India had grown to Rs 930 million. The growing popularity of private FM channels resulted in decreasing revenues for AIR as these FM channels attracted most of the ad revenues. In June 1998, Prasar Bharati [3] stopped the operations of private FM channels, reportedly in an attempt to improve AIRs revenues. But in July 1999, the government again decided to privatize FM broadcasts and came out with a ten-year license deal. The government refused to allow any foreign ownership in the sector. In 2000, the government called for bids for FM licenses. By late 2000, AIR had established a network of 283 broadcasting centers (including over 180

full-fledged stations, four relay centers, three Vividh Bharati commercial centers and one auxiliary center) and 146 medium frequency (MW), 50 high frequency (SW) and 87 FM transmitters. In spite of the advent of new communication media such as satellite and cable TV and the Internet, radio broadcasting sustained its popularity through the years. FM, the most popular channel, had the largest reach of over 60%. With the entry of private players in the mid-1990s, FM radio became more popular, attracting huge ad revenues. According to a survey conducted in February 2000, radio was still popular with over 58% of the rural and 48% of the urban population in India. With such a huge listener base, analysts felt that radio was still one of the primary mass communication mediums in the country.

The Prasar Bharati Act, which came into existence in September 1990, was implemented in September 1997. The Act aimed at freeing AIR and the state-owned TV entity Doordarshan from the immediate control of the Government of India and provided for the establishment of the 'Broadcasting Corporation of India' (BCI), an autonomous body for regulating electronic media.
[3]

RADIOS UNTAPPED POTENTIAL The low advertisement costs and extensive reach of radio help advertisers quickly reach and appeal to their target customers. For advertisers targeting a small/niche audiences, radio worked out to be much more beneficial (Refer Exhibit IV for a summary of the advantages and disadvantages of major media types). Gopinath Menon, Executive Director of the advertising agency, TBWA Anthem, said, Radio advertising is aptly suited for local promotions, and once audiences can be targeted, it has tremendous potential to eat into local mediums.

Reportedly, there are more than 150 million radio sets in India three times more than the number of TV sets in the country. On the basis of this data, private radio broadcasters claimed that radio had vast potential just waiting to be exploited. They aimed at duplicating the success of satellite television (which transformed the television industry in the 1990s) in the radio sector, with the help of latest digital technologies and innovative programming. According to estimates, radios share in the total advertising budgets of corporates was likely to grow to 5% by 2007 as against less than 1% in 2001 (Refer Table I).

TABLE I RADIO ADVERTISNG STATISTICS (2001-2007)

Radio advertising as percentage of total Indian advertising market 1.1

Year

Radio Advertising (in Rs billion)

2001

2002 2003 2004 2005 2006 2007

1.2 2.3 3.2 5.1 8.4 11.6

1 2.1 2.8 3.9 4.6 5.2

Source: www.exchange4media Thus, radio ad spend was expected to grow by an estimated CAGR of 45% between 20022007 as compared to an estimated 15% growth for total ad spend. Analysts claimed that the radio industry would follow the path of the television industry, which grew rapidly during the 1990s, with the entry of private players (TV ad spend grew at a CAGR of 30% during 19932001 and TV penetration doubled during 1996-2001). Industry observers remarked that the greatest challenge before private FM channels was persuading the urban consumer to regard radio as a source of entertainment. To get the attention of the urban consumer, private players started developing programs tailored to meet the tastes of local listeners, with the help of advanced digital technologies and superior programming. As part of these efforts, private channels conducted intensive research to ascertain the demographic profiles of radio listeners in order to provide more targeted programming. Identification of demographic profiles was also expected to help private players to attract more advertising revenues, as it would enable them to offer advertisers access their target audiences. AIR also revamped its programming during the late 1990s. As a result, it was able to increase its listener base and its advertising revenues by 2000 [4]. In 2000, AIR reported Rs 740 million as advertising revenues as against Rs 393 million in 1990. The restructuring efforts at AIR and the marketing strategies of private players raised the expectations of analysts about radios growth. Pal endorsed this belief saying, Radio is a far more intrusive medium compared to television. There is great future for radio. Even worldwide, radio is becoming a very important medium. In the US, some $ 19 billion are spent on radio advertising (Indias entire advertising market is worth $ 2.2 billion). I am certain that in a few years time, here too radio will make a comeback. Now you have players like STAR, the Times Group, Mid-Day etc moving into the arena. Things will become more professional, monitoring will get better and advertising will increase.

As a part of its restructuring program AIR launched an Internet site, which offered news, music, current affairs and links to other Indian sites. The site recorded 9 million hits by late 2000.
[4]

FM RADIOS SUCCESS STORY

Though the governments invitation to private players resulted in an initial rush for licenses, many companies decided to stay away from the sector because of the high license fees demanded by Prasar Bharati and the risk involved in investing heavily (licensees were required to invest a minimum of $ 690,000 as capital and $ 460,000 as working capital for every station). Prasar Bharati had also imposed certain strict conditions that created resentment among the private players. These players were not allowed to offer news or current affair programs, and they were given only a fixed number of slots per city. As a result, only a few players remained in the race. They were given licenses to set up 37 stations that would operate across 19 cities in India (Refer Table II for the key private players in the Indian radio industry).

TABLE II KEY PRIVATE PLAYERS IN THE INDIAN RADIO INDUSTRY

COMPANY (PROMOTERS) STATIONS ACQUIRED 12

Bennett Coleman & Co

HITZ FM Radio India 1 (Siddhartha Bahadur) India FM radio (Aamir Raza 1 Hussain) Living Media India Mid-Day Millennium (Gautam Radia) Music (Ispat/STAR) Broadcast 3 3

Broadcast

Sumangli Publication (Sun 3 TV) Vertex Broadcasting (Dabur 4 India) Udaya TV TOTAL 1 37

Source: www.exchnage4media.com

With the launch of Radio City FM91 in July 2001, in Bangalore, by STAR [5] and Music Broadcast Private Ltd. (MBPL), the industry began its second innings. Besides Bangalore, MBPL had FM radio licenses for five other cities: Delhi, Mumbai, Patna, Nagpur and Lucknow. The Lucknow and Mumbai stations began operations in the next few months. The other three stations were yet to become operational. STAR functioned as a content supplier and provided sales and marketing support to Radio City. Commenting on the rationale behind Radio Citys launch, Peter Mukerjea, CEO, STAR, said, Radios strength is its immense flexibility, adaptability and suitability for a modern and active life. Radio Citys launch marks the introduction of a new age for radio in India. Through our participation in this emerging sector, STAR will be able to extend its relationship with audiences in India by connecting them in more ways than television. The next player to launch its FM channel was Bennett Coleman & Co. Its Radio Mirchi was launched in October 2001 in Ahmedabad and Indore [6]. Radio City achieved significant success in Bangalore and Lucknow, registering high listenership ratings. With the launch of Radio City, overall FM radio listenership increased by 56% while the time spent on listening to radio tripled (from 1 hour to 3 hours). Home listening increased to 85%, with listenership at the workplace also growing at a rapid pace. Similar trends were observed after the launch of Radio City in Lucknow. By late 2001, FM transmission reached 21% of Indias population and covered over 17% of the countrys area.

A leading multi-platform content and service provider in Asia, STAR is a wholly owned subsidiary of Newscorp. The US-based Newscorp is one of the world's largest media companies involved in the motion pictures, television programming and broadcasting, publication and various other related businesses.
5]

Over the next few months, Radio Mirchi entered the Pune and Mumbai markets. Mumbai seemed to have become the hottest FM radio market with Living Media's 'Go' and 'Red' channels and Millennium Broadcast's 'Win' channel also entered the city by June 2002.
[6]

The strategies followed by the players varied from one radio channel to another. Radio Citys market strategy was developed after six months of intensive research conducted in Bangalore. As part of this strategy, the company focused on creating brand name and brand awareness, before moving on to specific target programming. Sumantra Dutta, COO, Radio Division, STAR, said, What we are looking at is the first mover advantage. We are the first private FM radio station in India, and we plan to cash in on this. The company identified music as a universal theme appealing to all sectors of the community. It therefore offered music-based programs in both English and local languages.

In order to broaden its appeal, the channel also offered programs such as the 11 o Clock Show on beauty tips and the Breakfast Show offering the days horoscopes. Apart from these, the channel offered a range of entertainment programs 24 hours a day. These programs were customized to the needs and tastes of local listeners on the basis of customer research. Radio City also signed a contract with Newscorp to leverage the best international talent in the fields of technology, research, engineering, sales, marketing and programming. The target audience for Radio Mid-Day was however, car owners. The channels programs targeted car owners, who had to spend hours stuck in the traffic. For

the afternoon slot, focused on offering programs that appealed to housewives. Rajesh Tahil, Head of Radio Mid-Day, said, In the afternoon slot, we will have to compete with television for the attention of housewives. What we are aiming at is the top 20% of the radio audience. Thus we have decided to choose an audience, and go with it. The increasing popularity of FM resulted in considerable growth in the advertising revenues earned by radio companies. Seeing the growing listener base of FM radio, many companies increased the share of radio in their total advertising budgets. Many leading brands such as Kwality-Walls, Spice, Tanishq and Airtel advertised heavily. Private players and analysts were optimistic regarding the future of the radio industry in India. In the words of Nirvik Singh, M.D., Grey Worldwide, India, The share of radio is limited by the mediums current delivery. Given a free hand and the competition, there is no reason to believe that the medium which delivers in every other country will not perform well in India. Analysts pointed out the success of radio (increase in number of radio stations, ad spends and market) in developed and developing nations in the 1990s. In the US, there were more than 11,400 radio stations that served nearly 240 million people and attracted over 13% of the total ad spend. In Australia, there were over 850 radio stations, with ad revenues increasing by an estimated 7% annually. In UK, ad spend on radio amounted to an estimated 6% of total ad spend in the country. Even in developing nation like Sri Lanka, the radio industry was reportedly attracting 14% of total ad spend. In light of these facts, analysts remarked that, given appropriate marketing strategies and awareness, radio had the potential to capture the publics attention in both rural and urban areas. A BRIGHT FUTURE? Though private companies obtained licenses to set up 37 FM stations in 19 cities by December 2001, only a few channels became operational. This was due to difficulties in setting up radio towers and the lack of basic infrastructure facilities. As a result, in December 2001, Prasar Bharati extended the deadline to April 30, 2002, and signed a memorandum of understanding (MoU) for a period of 10 years. This MoU allowed private FM operators in five cities to use AIR resources against payment. In spite of these developments and the bright future predictions for radio broadcasting, there were some doubts regarding the industrys future. Given the huge amount of money spent on acquiring licenses and setting up stations, analysts pointed that it would take four to five years for the companies just to break even. Moreover, radio was not very popular in the media market and its revenues accounted for a negligible percentage of total media revenues (Refer Exhibit V For Projected Media Revenues). Thus, it seemed rather difficult for all the players to sustain the competition for long without earning any profits.

Added to this, the restrictions imposed by Prasar Bharati on the programming content (exclusion of news and current affairs programs, the core of broadcasting industry) of private players were expected to severely limit the success of these players. With the kind of programs the private players were allowed to provide, they could target only a few selected sections of the audience. This kind of programming was bound to restrict their growth. And with more

than 24 languages spoken in the country, the radio networks need to develop multilingual programs to attract a nationwide audience. Developing such programs would demand heavy investments. As all the players were focusing only on the urban areas, severe competition between the channels operating in the same city was expected to result in the survival of only two or three dominant players. To increase the audience base, private players would have to spread to rural areas. But the paucity of hardware and advanced infrastructure in rural India was a major hindrance to such expansion. However, the greatest threat to Indian radio broadcasting seemed to be the advent of satellite radio[7]. In light of this, the future of private channels and AIR, with their huge infrastructure costs and limited reach, appeared to be bleak. The worlds first satellite radio service, WorldSpace [8], had already started operations in India and was gaining acceptance rapidly. However, to be able to access satellite radio, listeners had to buy special satellite radio sets, which were priced very high. Analysts felt that Indian consumers would not be willing to pay huge amounts when small radio sets and transistors were available at very cheap prices. Thus, it remained to be seen whether the aggressive efforts of private FM radio players to rejuvenate the Indian radio industry would succeed and help radio regain its position as an integral part of the communication and entertainment business in India. QUESTIONS FOR DISCUSSION: 1. Discuss the growth and decline of radio broadcasting in India and examine the reasons for the fall in the mediums popularity during the 1990s. 2. Analyze the changes in the Indian radio market with the entry of private players into the FM sector. Critically evaluate the private players efforts (strategies) to leverage the potential of radio. Do you suggest the new entrants might follow similar strategies to expand the market and ensure success? 3. Discuss the future of radio broadcasting players in India, in of radios relatively small share in the communication and entertainment market, government restrictions on private players, intense competition in the FM broadcasting market, and threat from satellite radio companies.

Satellite radio stations broadcast their signals from their earth stations to the satellites positioned in geo-stationary orbits above the earth, which covered the whole earth, while remaining stationary with respect to the land below. This enabled the satellite radio's signal to reach to all corners of the world as compared to the limited area access of AM/FM stations. Thus, satellite radio companies operate throughout the world from a single radio station. This resulted in huge cost advantages.
[7]

WorldSpace digital radio is aired worldwide with the help of three satellite beams including AfriStar, AsiaStar and AmeriStar. WorldSpace India, a wholly owned subsidiary of WorldSpace, manages the Indian operations of the company.
[8]

EXHIBIT I WORKING OF A RADIO

A radio wave is an electromagnetic wave propagated by an antenna. Radio waves have different frequencies. The listener can tune the radio receiver to a specific frequency to catch a specific radio signal. For example, all FM radio stations transmit in a band of frequencies between 88 megahertz (millions of cycles per second) and 108 megahertz, and any listener who tunes his radio receiver to a frequency falling in this range would have access to that specific FM radio stations programs. Common radio frequency bands include FM AM Citizen Short 88 535 Band (CB) Radio Wave Radio MHz to 108 KHz to 1.7 26.96 MHz to 27.41 5.9 MHz to 26.1 MHz MHz MHz MHz.

Every radio setup consists of two parts, the Transmitter and the Receiver. The transmitter receives the message, encodes it onto a sine wave (a continuously varying electromagnetic wave) and transmits it with radio waves. The receiver receives the radio waves and decodes the message from the sine wave it received. The transmitter and the receiver use antennas to radiate and capture radio signals. The function of the antenna in a radio transmitter is to send radio waves into space, and in a radio receiver, it is to capture the transmitters power to the maximum extent and route it to the tuner. The size of the antenna depends on the frequency of the signal to be transmitted or received. A radio station transmits the sine waves, with information (programs) encoded on them, into space with help of an antenna. These sine waves are captured by antenna at the receiving station (radio set). The sine waves themselves do not contain any information and are modulated so as to hold information. Normally, sine waves are modulated in three ways: Pulse Modulation (PM): In PM, the sine wave is turned on and off at specific intervals. This is an easy way of sending coded messages. Usage of PM is comparatively less. Amplitude Modulation (AM): In AM, the amplitude of the sine waves (its peak to peak voltage) differs. AM is the most commonly used mode across the world. Frequency Modulation: In FM, the transmitters sine wave frequency changes very slightly, based on the information signal. FM is largely immune to static (not useful or empty transmissions), which enhances the effectiveness of transmissions. The sine waves with encoded messages are captured by antenna and sent to the tuner in the receiving station. The tuners function is to separate one from the other, the thousands of sine waves received by the antenna. Tuners use the resonance principle, i.e. they resonate and amplify at one sine wave frequency, ignoring all other sine wave frequencies. They thus enable radio to receive only one sine wave frequency. The decoding of the information on sine waves in that particular frequency is done with the help of a demodulator or detector in the radio (detector defers from one radio type to the another). The radio amplifies this decoded information and sends it to the speakers (or headphone), from where the listener listens to the information (program). Source: www.howstuffworks.com

EXHIBIT II HISTORY OF RADIO WORLDWIDE

By the early 1930s, radio had acquired an industry status in many countries. Amplitude Modulated (AM) frequency was used for radio broadcasting prior to FM frequency. In 1937, Edwin Armstrong invented the Frequency Modulated (FM) radio that used FM frequency. The first commercial FM radio broadcast was made in December 1941 at Nashville. The advent of FM radio further increased the listener base on account of the level of clarity in the broadcast. However, the advent of TV during the 1940s severely eroded the listener base of the radio industry. The ban exerted on media during World War II (1942-45) added to the industrys woes. Post war, the TV industry grew at an incredible pace. During its initial years, TV shows were primarily adaptations of existing radio shows. However, in the mid-1950s, TV shows created a distinctive identity for themselves in the field of entertainment and communication. In the next two decades TV media extended its roots to all corners of the world and became an inseparable part of almost every household. As a result radio programming experienced a decline in popularity. Many of the leading radio broadcasting companies shifted their focus to TV programming on account of the shift in the audience preferences. Consequently the radio industry suffered from inadequate funding. In spite of all these, in the 1950s, radio still remained one of the major mass communication media. In 1954, the number of radios in the world (257 million) exceeded, for the first time, the number of newspapers printed daily (256) million. The advent of the transistor and FM stereo [9], in the 1950s and 1960s respectively, also contributed to the increase in the listener base because of its size, style, and portability and improved quality of broadcasting. By the early 1970s, the FM band overtook the AM band across the world and gained popularity among the young listeners. The industry faced another setback with the advent of satellite broadcasting technology during the mid- 1970s. This technology enabled TV networks to show their programs all over the world. In the 1980s, the satellite TV industry established itself firmly, reaching out to millions of subscribers all over the world, generating huge revenues through advertisements. And in the 1990s, the Internet evolved as a major communication channel, linking people across the world via computers. The Internet soon became a craze across the world and was very popular with the younger generation during the late 1990s. In light of these developments, many analysts forecasted the end of radio broadcasting. However, many of them commented that radio broadcasting had successfully withstood competition from TV and satellite broadcasting, and would remain one of the major sources of mass communication across the world, despite the Internet. Portability and free accessibility of radio indoors and outdoors mainly contributed to the success of radio broadcasting worldwide. In small and developing countries radio broadcasting remains a major means of communication. Some analysts also were also of the opinion that radio broadcasting would retain its popularity in future on account of recent technological developments in field like digital radio and satellite radio, which would allow it to survive and progress alongside with other advanced media.

Source:

ICMR

FM stereo uses two speakers instead of one.

EXHIBIT III INDIAN RADIO MARKET (1975-1998) (in million)

RADIO RADIO REVENUES PENETRATION [10] SETS (Rs ) (%) 62.6 100.1 201.9 627.3 813 934.4 2.7 3 9.7 10.9 11.9 11.7

YEAR

1975 16.77 1979 20.67 1985 75 1991 95 1995 111 1998 115

Source: www.exchange4media.com

EXHIBIT IV ADVANTAGES AND DISADVANTAGES OF MAJOR MEDIA TYPES

MEDIUM ADVANTAGES DISADVANTAGES

Flexibility; timeliness; good Short life; poor reproduction Newspapers local market coverage; broadquality; small pass-along acceptance; high believability audience Combines sight, sound, and High absolute cost; high motion; appealing to the clutter; fleeting exposure; less senses; high attention; high audience selectivity reach

Television

Audience selectivity; flexibility; Relatively high cost; junk mail Direct Mail no ad competition within the image same medium; personalization Audio presentation only; lower Mass use; high geographic and attention than television; nondemographic selectivity; low standardized rate structures; cost fleeting exposure

Radio

Magazines

High geographic and demographic selectivity; Long ad purchase lead time; credibility and prestige; high-some waste circulation; no quality reproduction; long life; guarantee of its position good pass-along readership Flexibility; high repeat Limited audience selectivity: exposure; low cost; low creativity limitations competition Excellent local coverage; high High competition; long ad believability; wide reach; lowpurchase lead time; creativity cost limitations

Outdoor

Yellow Pages

Very high selectivity; full control; interactive Newsletters Costs could be very high opportunities; relative low costs Flexibility; full control; dramatize messages Many users; opportunity give a personal touch can Overproduction could lead to run-away costs to Relative high cost volunteers are used unless

Brochures

Telephone

Internet

Relatively new media with a High selectivity; interactive low number of users in some possibilities; relatively low cost countries

Source: Marketing Management, Philip Kotler (10th Edition).

EXHIBIT V PROJECTED MEDIA REVENUES (in Rs million)

2000 Press TV Radio Outdoor Cinema 2001 2002 2003 2004 2005

46,064 47,739 50,974 55,307 32,586 34,325 37,416 40,971 1,564 4,600 156 1,775 5,005 137 2,081 5,395 147 2,456 5,773 150

59,842 45,395 2,947 6,350 153

64,629 50,389 3,536 6,985 156

Internet Total

250

355

475

709

1,004

1,565

85,302 89,336 96,488 1,05,365 1,15,691 1,27,260 Source: Initiative Media India.