‘When I was young, I’d
listened to the radio
Waitin’ for my favourite songs
When they played I’d sing along
It made me smile...’
— The Carpenters, Yesterday Once More
Feeling nostalgic? Yes, the song is indeed a reflection of how FM has revived radio listening in India. After television had entrenched itself firmly in the drawing rooms of the urban elite, transistor sets had almost disappeared. Almost no city household tuned in to All India Radio or Vividh Bharati programmes. However, with the advent of FM radio stations, the radio has again surfaced as a popular mode of communication. In fact, the medium is fast catching up with television.
FM radio is quite popular amongst those who live unobtrusive lifestyles, that is to say, those who do not wish to leave whatever they are doing for the sake of entertainment. The radio is already reaching 500 million households with the result that the radio advertising industry will touch Rs 1800 crore by 2012 from the present figure of Rs 620 crore. In fact, radio advertising was a mere Rs 500 crore industry even four years ago. “Approximately 60 per cent of the revenue of the industry comes from FM broadcasters,” says Saswata Ghoshal, programming head of Big FM. There were certain misconceptions about radio advertising — one being that the radio reached out to a limited audience as compared to the television. Thankfully, those misconceptions are changing. As Ghoshal points out, FM programmes are catchy and fast. The listener segment here can be divided into the categories of housewives, students, business executives, who are again categorised into car and non-car owners. According to a recent survey by Intellect, the research and technologies unit of Initiative Media of the Lowe Group, it is the 45 to 50 age group that forms the largest portion of the listener segment in the east. The research was conducted on 1200 respondents in the cities of Mumbai, Delhi, Kolkata, Bengaluru, and Chennai.
The survey also found that the frequency of listening to the radio as well as the number of radio listeners had increased over the past two years. Delhi registered the highest growth rate in terms of new listeners at 35 per cent. The percentage of heavy listeners also increased from 11 per cent, prior to the entry of private FM players, to 63 per cent after their entry. In Kolkata, the percentage of radio listeners increased from 20 per cent to 75 per cent, and the percentage of heavy listeners increased from 5 per cent to 19 per cent.
It is due to this prolific growth in listening that the radio has acquired a revenue earning profile. Despite the earning potential being far less than television, the radio is fast catching up. There’s another reason for this. Advertising rates in FM radio are significantly lower than those of television. For example, a 30-second prime time slot on Star Plus, a Star TV channel, costs anywhere between Rs 10 to Rs 12 lakh. In contrast, a 30-second slot on an FM station Radiocity, where the content is also provided by Star, costs merely Rs 5000. Rates in some FM stations are even lower — for instance Rs 800 to Rs 1,000 for a 30-second commercial.
The cheap advertising rates have been a blessing for FM stations. They have attracted the attention of small traders and businessmen who were so far unable to advertise on more costly media like television and print. Now of course, FMCG companies are advertising on radio as well. “By opening up an advertising opportunity for small businesses as well, FM has created a win-win situation for everybody,” says Saumya Chattopadhyay, Head, Strategic Planning, Rediffusion Y&R.
The other reason for the growth in radio advertising is the advent of digital radio. “This will mean more selective personalised channels as more data can be compressed and broadcast on the same frequency. Therefore, in the future we will see niche channels as we see on TV,” says Chattopadhyay.
This marked difference in rates and client profiles also ensures that the sources of advertisements for television and radio will always be different. FM stations can cover a radius of up to 120 kilometres, which means an audience comprising millions if the station is based in a metropolitan city like Mumbai or Kolkata. In fact, the government is keen that more FM channels come up across cities. Some FM broadcasters have also started airing news and that has added more depth to programme content. As a senior manager of AC Nielsen ORG-MARG said, “This indicates that the radio is gradually becoming an apt medium for targeting consumers with a greater purchasing power.” That can only spell good news for small advertisers, who can now reach a larger audience at lower costs.
The author is a well-known industry watcher