PUNE

ALTERNATIVE SOURCES OF REVENUE ON RADIO

@
RADIO CITY 91.1 FM

BY:
BANGALORE ABHIJEET PRASAD
SUMMER TRAINEE
BANGALORE
 SYNOPSIS
OBJECTIVE
 TO UNDERSTAND RADIO AS MEDIUM OF COMMUNICATION.

 TO ASSESS AND UNDERSTAND THE NEEDS OF CLIENT OF RADIO.

 TO EXPLORE AVENUES FOR ALTERNATIVE REVENUE ON RADIO AND ITS GROWTH

 RADIO INDUSTRY

 EMERGENCE OF FM RADIO.

 CURRENT SCENARIO OF RADIO INDUSTRY

 FUTURE GROWHT OPPORTUNITIES AND EVALUATING THEM

FEATURES OF RADIO INDUSTRY
Radio Industry

• Business model is mainly advertising driven

• Impacted by the global recession, growth in the last two quarters of 2008 was slow because
of slowdown in the advertising industry
• A cost effective medium for advertisers as it has more penetration and reach compared to the
traditional print and television
• Controlled by few business groups having sizable stake in different media properties
• Mainly an act of diversification from existing media players as an risk mitigation exercise with
slowdown experienced in traditional media outlets such as print.
• Regulated and recently privatized
• Phase II licensing made the business viable
• Has huge infrastructure setup costs
• Oligopoly and witnesses price wars
• Overall growth rate is impressive

4
CHARACTERISTICS OF FM RADIO INDUSTRY IN INDIA

Key indicators

• Highly fragmented and regulated

• Top 5 players part of large media groups control 63%
radio stations
• Top 5 players earn 40% of total revenue
• More than 240 private radio stations
• Slowdown in promoter’s primary business activity
has resulted in diversification in radio business
• 2004-2008 CAGR ~9% (realized)

Future drivers

• Consolidation in the industry

• News and current affairs broadcast for content
differentiation
• Phase III licensing to ease industry expansion
• New stations to result in more fragmentation
• Advertising revenue generation from national to local
base
• 2009-2013 CAGR ~15.4% (projected)

*CII-KPMG (2005) Indian entertainment industry, Focus 2010: Dreams to Reality.

**KPMG (2009) "In the interval... But ready for the next act." FICCI-KPMG Media & Entertainment Industry Report.`
CURRENT SCENARIO OF RADIO INDUSTRY

The metro market phenomenon

• 18% of all private FM stations in metro markets
• Metro markets contribute maximum revenue to the
industry
• No room for expansion in metro markets – metro
markets already have maximum number of permitted
stations in operation.
• Witness fierce competition

Advertiser driven

• Radio globally is optimized for local advertisers but

Indian Radio industry vies for advertisers with
national presence. The mix currently is in favor of
National advertisers.
• Advertisers who provide big business are largely
based out of metro markets.
• Advertisers give maximum business to market
leaders who have large presence, egg. Radio Mirchi,
Big FM.Radio city
• Radio commands 4% of total advertising revenue.
• Industry expert opine that small players distort
market by virtue of their inability to support large
advertisers.

12/08/2021 Size of Indian Advertising Industry – INR 221 bn (2008) 6

 CURRENT SCENARIO
KEY DEVELOPMENTS

 MERGER AND ACQUISATIONS

 Bennett Coleman & Company acquires Virgin Radio UK for Rs.448 Crores.

 Radio Netherland inks deal with Radio Chaska for music contents.

 INDIAN STATION GOES INTERNATIONAL

 Reliance Anil Dirubhai launches a 24 *7 FM Station Internationally.

Annual marketing budget spent on Radio as an Advertising Media

% of the total budget spent on radio advertising No. %

0-10 36 60

11-20 16 27

20-30 8 13

Total 60 100
 DATA ANALYSIS
SAMPLE SIZE: 60
SAMPLE: Corporate and Retail Clients
Ranking of various advertising medium according to the preference of the sample

Advertising Media No. of sample %

Television 12 20 12
3
16
Print 27 45
Television
Print
Radio 2 3.34 Radio
Outdoor
Internet
Outdoor 16 26.67 2
27

Internet 3 5

Total 60 100
Success ratio of advertising campaigns on radio

Response No. of samples Percentage

Yes 40 66
No 10 17
Can't say 10 17
Total 60 100
Objective of advertising in Radio

Objective of Advertising Campaigns done on Radio No. of sample Percentage

Brand Recall 30 50

Promtion of new schemes and offers 20 33

Launch of new Store or Product 10 17

Total 60 100
 Preference of Radio Station

Preference of Radio Station

FM channels No. of samples Percentage

Radio City 10 17
Radio Mirchi 18 30
Radio One 20 33

Big Fm 6 10

Fever 2 3
Radio Indigo 4 7

Total 60 100
Innovative programme preferred by clients

Objective of Advertising Campaigns done on Radio No. of sample Percentage

LIVE CHAT SHOW FOR LISTENERS 15 40

LIVE BIDDING SHOW 2 3.33

REALTY SHOW OR TALENT HUNT SHOW 15 40

ON THE MOVE SHOW 28 46.66

TOTAL 60 100
Key findings:
Out of the sixty clients survey only a small percentage i.e 3.33 %
consider radio as primary or number one medium for
communication.

 The total percentage of Advertising budget allocated to radio is

very small compare to other medias vis- a- vis and even the that
also is comparatively less compared to international industry
standards.

 The clients are not happy Radio stations converting them to

100% Kannada, as they consider Radio as a cosmopolitan medium
and their TG is a mixture of people living in Bangalore and
Karnataka which is supposed to be a cosmopolitan region.
Clients are unable to measure the reach the Radio is fetching
them, compare to other forms of media like print or television.

Radio stations should be making more interactive and customer

oriented programs and should be judicious in playing what type of
music should be played when. A special attention should be given to
this feature as music is the connecting link between listeners and
station and its success depends on the music specially.

 Clients want stations to constantly innovate the programme so

that there is no repetition & listener interest is not lost over the
period of time.
KEY RECOMMENDATIONS :
Radio should reposition itself as a medium of Communication by
promoting itself robustly as primary media of communication.

Radio should work out special Packages for its regular clients, in
terms of value addition provided to them.

Radio should develop some sort of yardstick which should help

Clients to measure the reach of a campaign on Radio. Radio as an
industry should work on it and develop a solution for it. For example
any customer coming through the channel of radio station
Radio should focus n all those sectors which are
still not approached by radio and are focused on
other media,

As it is one of the cost effective medium and mass

media, it should also play an important role in the
society as any other media, it will improve the point
of view of companies and listeners towards medium.

Radio is considered a part of cosmopolitan life, so

the programming should be catering to their needs
and not specific language people. It should rework
 on its programming in a way that satisfies every one As
because it may fetch you the listener ship but they won’t
fetch advertisers because of demographics.
 AVENUES OF ALTERNATE REVENUE
 Alternative Revenue is non-traditional, significant
and sustainable revenue streams for business, via the
creation of commercially sponsored networks.

 In the Radio industry which is still at a development

stage, and where there advertisement is the main
source of revenue with stiff competition between
players to increase their market share it’s important to
look for an alternative way for revenue generation to
stay ahead in the competitive industry
 In Radio Industry, one of the alternative way of
revenue generation is doing the BTL (below the line)
activities. This stream of revenue generation is non –
traditional and innovative. The idea is to find similar
non traditional source of revenue generation.

TWO PATHS FOR ALTERNATIVE REVENUE GENERATION:

DIVERSIFICATION OF BUSINESS

INNOVATING THE PRESENT FORMAT

DIVERSIFICATIN OF BUSINESS :

ONLINE RADIO - INTERNET RADIO

 COMMUNITY RADIO

 INDIA’S FIRST INTERNATIONAL STATION

SUGGESTED IDEAS FOR FORMAT CHANGE :
 LIVE CHAT SHOWS

 LIVE BIDDING SHOWS

 REALTY SHOW OR TALENT HUNT SHOWS

i. Voice of Radio or Band of Radio

ii. Star on Radio

iii. RJ in you
 ON THE MOVE SHOW

 PROMOTING EXHIBITION SHOW FOR DIFFERNET INDUSTRY

 PROVIDING ONLINE CONTENT TO CLUB MEMBERS

 ESTABLISHING A NETWORK OF STATION INTERNATIONALLY

 FOCUSSING ON GROWING SECTORS

 INTERNET & WEBSITES FULLL UTILISATION

CONCLUSION
Thank you