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India expands FM radio

News, 06 November 2015

NEW DELHI: Radio advertising revenues in India are predicted to double over the next five years as FM coverage is expanded across the country.

Analytics company Crisil said that ad volumes would grow as the recent sale of licences could enable FM radio to reach a potential 294 cities, up from the current figure of 86.

This week the minister in charge of information and broadcasting also announced the government's intention to make FM services available across 65% of the country within two years, up from 42% at present. Ultimately, coverage will reach 85% of the population.

This push means that ad revenues could almost double, from Rs 2,000 crore today to Rs 3,900 crore by 2020, according to Crisil.

Separate research from S-Group, part of TAM Media Research, has shown that some categories are already investing significantly more in radio advertising, the Business Standard reported.

In the first nine months of 2015, ad volumes for online retailers on radio were up 126% on the same period in 2014. Comparable figures for television and print were 78% and 62% respectively.

The medium offers the twin attractions of low cost and, eventually, reach. Prime time rates for a ten-second radio jingle in the metros are around Rs 1,900 and in other towns around Rs 660, the Business Standard reported. A ten-second spot on the top general entertainment channels, in contrast, costs up to Rs 150,000.

As the regulations now allow ownership of multiple frequencies or stations in one city and the sharing of network infrastructure, reach will follow in due course as existing players set up new operations.

Local advertisers are an important source of revenue for radio broadcasters, with industry figures putting the split between local and corporate advertising at 60:40.

"It remains the strongest support base for radio," Prashant Panday, MD and CEO of ENIL, told Exchange4Media.

"I see that growing to nearly 80% in the years to come, in line with worldwide patterns," he added.

Data sourced from Business Standard, Economic Times, Exchage4Media; additional content by Warc staff