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FM Radio Broadcasting Industry - India - Sample


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Radio stations generated revenue of INR 8 bn in 2008; expected to reach INR 18 bn by 2012. Share of Radio advertising was 3.3 % in 2008; expected to reach 4 % in 2012.

The report provides a snapshot of the market. Privatization of Radio discusses phase I and phase II rounds of FM licensing in India. An overview gives a quick picture of the market with estimated advertising revenues and share, and profile of advertisers on radio. An analysis of drivers reveals that increasing radio listener base, favourable demographics, opportunities in Phase III expansion, political advertising, increasing advertising by small local brands and introduction of new performance measurement tool is driving growth in this sector. The key challenges identified include royalty, lack of content differentiation, Government Regulations, low share of ad spend and bargaining tactics used by advertisers.

The report identifies the current market trends including emergence of visual radio, satellite radio, community radio, internet radio, sales alliances and players going niche. The competitive landscape profiles the major players in this sector in terms of business description, number of FM stations and FM frequencies of each player. The report also provides details key developments in this sector.

FM Radio Broadcasting Industry - India - Sample

  1. 1. FM Radio Industry - India December 2009
  2. 2. Executive Summary Radio stations generated a revenue of INR X bn in 2008 ; expected to reach INR Y bn by 2012 Share of radio advertising was x% in 2008; expected to reach y% in 2012 Market Most stations use same level of genre of content with little or no differentiation There are over x radio stations beaming across over y cities in India LE Drivers: Challenges: P – Increasing radio listener base – Royalty – Opportunities in Phase III expansion – Lack of content differentiation Drivers & Challenges – – – – AM Increasing advertising by small local brands Favourable demographics S Political advertising Introduction of new performance measurement tool – – Government regulations Bargaining tactics used by advertisers Emergence of Visual Radio Satellite Radio Community Radio Trends Internet Radio Sales Alliances Players going Niche All India Radio (AIR), covers x% of India's area and reaches y% of India’s population Company A leads the overall market with share in revenue terms in excess of x% Competition Company B leads in terms of highest number of stations Majority of players are backed by media houses with interests in media activities like TV or Print FM RADIO INDUSTRY – INDIA.PPT 2
  3. 3. •Privatization of Radio •Market Overview •Drivers & Challenges •Trends •Competition •Key Developments FM RADIO INDUSTRY – INDIA.PPT 3
  4. 4. Privatization of Radio in India was a lengthy process Time Line Radio Privatization • Private broadcasters sold slots on AIR’s FM channels for certain key cities, the service was later 19-- discontinued in 19-- 19-- PLE • Privatization of FM - Phase I Policy • Bids were invited for allotting licenses for a ten-year period 20-- 20-- SAM • Phase I FM broadcast licensing, auction was conducted • Licenses issued to private radio broadcasters • In February 20-- TRAI was asked to give recommendations for Phase II licensing of FM radio 20-- • In August 20--, TRAI presented its recommendations on the regulatory framework for private FM stations 20-- • Announcement of Phase II Policy of privatization of FM 20-- • Licenses for x cities were auctioned Source: Knowledge@Wharton “Strong Signals: India's FM Radio Stations Brace for New Competition” August 2009 ; “Sector Focus: Resurging FM Radio” ; afaqs “Market Transformation: Radio” October 2009; CII KPMG Report “Indian Entertainment Industry: Focus 2010” ; ENIL “Indian Radio Industry” FM RADIO INDUSTRY – INDIA.PPT 4
  5. 5. Radio Market has a good growth potential Market Overview Advertising Revenues and Share • There are over x radio stations beaming across ~x Advertising Revenues cities in India INR bn % Share of Radio in Ad Pie % • Radio programming during primetime consists of at 20 4 LE least x minutes of music, y minutes of Ads and z minutes of jockey talk 15 3 • Radio advertising penetration in India is low as compared to other nations MP 10 2 A Demand for radio advertising is expected to increase as 5 1 S the players across industries feel the impact of recession 0 0 • Radio’s national footprint is expected to rise with 2004 2005 2006 2007 2008 2009e 2010e 2011e 2012e phase III round of licensing Radio Advertising Share in Total Ad Spend Advertisers Profile on Radio % Media y Others 10 z x% u% 5 x w v% y% FMCG Telecom w% z% 0 Retail t% India China Singapore World Finance Durables Source: IBEF ”Radio Ga, Ga”; ENIL “Radio Mirchi”; CII KPMG Report “Indian Entertainment Industry: Focus 2010”; “Report on the Indian Private FM Radio Sector” May 2008; Majmudar & Co; ”The Indian media and entertainment industry”; Livemint “Consolidation, greater reach and growth ahead" December 2008 FM RADIO INDUSTRY – INDIA.PPT 5
  6. 6. Drivers & Challenges - Summary Drivers Challenges Increasing radio listener base Royalty Opportunities in Phase III expansion Lack of content differentiation Increasing advertising by small local Government regulations brands Favourable demographics Bargaining tactics used by advertisers Political advertising Introduction of new performance measurement tool FM RADIO INDUSTRY – INDIA.PPT 6
  7. 7. Trends - Summary Emergence of Visual Radio Players going Niche Satellite Radio Trends Sales Alliances Community Radio Internet Radio FM RADIO INDUSTRY – INDIA.PPT 7
  8. 8. Majority of players are backed by media houses with interests in other media activities like television or print Competition Overview Private players – No. of Stations • In terms of reach, All India Radio (AIR), covers x% of A a India's area and reaches y % of India’s population B b • Company A leads the overall market with a share, in C c LE revenue terms, in excess of x% D d E e P • Market comprises of small and large players F f Small players normally have two to four stations G g SAM Large players are present nationally or in multiple regions Majority of players are backed by media houses with interests in other media activities like TV or Print – Such players are in position of providing benefit of cross- advertising to advertisers H J K L I k l h i j • Regulations at present do not permit consolidation of M m business, before five years of operations N n Large players are thus forging strategic sales tie-up with O o the regional or small players P p • Metro cities are over crowded with FM stations Q q x% of all private FM stations are located in metros R r Metro cities have diverse set of people, hence attract S s maximum attention of advertisers T t U u • Radio companies spend a lot of effort on branding V v Companies try to differentiate by building loyalty through W w RJ shows Source: Company Websites; “FICCI-KPMG Media & Entertainment Industry Report”; ENIL Radio Mirchi Annual Report 2008-09 ; “The case of Diversification: Case Study analysis of the nature of competition in emerging markets” October 2009 FM RADIO INDUSTRY – INDIA.PPT 8
  9. 9. Major Players (2/7) Company FM Frequency No. of Stations Business Description Company A 92.7 45 • It is a radio initiative from ABC Ltd • It launched its first Station in September 20-- • A network of x stations including an FM station in Singapore • Major cities covered include Hyderabad, Mumbai, Delhi, Kolkata, Mangalore, Jalandhar, Ajmer, Bhopal and Surat Company B 94.3 4 • Started its service on January 1, 20-- • It is a private FM radio station for the state of Kerala, operated by ABC in Kerala • Services in Cochin, Thiruvanathapuram, Kannur and Thrissur Company C 104 4 • It broadcasts in Mumbai, Bangalore, Delhi and Kolkata • It is operated by ABC Ltd Company D Various 26 • It is an educational FM radio station in several cities of India Frequencies • Operate as ‘media cooperative’ with day-to-day programmes contributed by educational institutions, NGOs, government and semi-government organizations, UN agencies, Ministries • Medium of broadcast is English, Hindi or regional language Note: This list is not exhaustive Source: Company Websites SAMPLE FM RADIO INDUSTRY – INDIA.PPT 9
  10. 10. Thank you for the attention The FM Radio Industry - India report is a part of Research on India’s Media and Entertainment Industry Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Gagan Uppal Phone: +65 8448 0449 Phone: +91 98364 71499 E-Mail: E-Mail: Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. FM RADIO INDUSTRY – INDIA.PPT 10