FM radio’s midlife crisis in India

From expensive frequencies to low ad rates, FM radio's woes don't seem to end

The FM radio business in India is tough, and the Rs 2,800 crore ($415 million) industry seems to be stuck in a rut

There are many challenges, from high frequency prices to low advertising rates, leading to ad clutter

With the advent of digital music streaming services, FM radio is trying to keep pace with the changing times

Faced with all these challenges, FM radio companies are trying their hand at the digital space to remain relevant

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It’s 8:00 PM on a Thursday in Delhi and eight minutes have passed. Sitting in a taxi that’s stuck in Delhi traffic, I wait for the FM station the cabbie has chosen to play some music. Any music. And just then, the first notes of a popular Bollywood song fill the confines of the vehicle, but not before the man on the radio tells me that I can earn thousands of rupees with the new video streaming application Swoo. How I wish!

In the space of just eight minutes, there were 18 ads. Yes, I counted. The obvious choice is to switch to another FM channel, but that won’t help. Every FM station is equally plagued by excessive advertisements.

If you go by data from radio monitoring agency AirCheck, FM radio stations play as much as 20 minutes of advertising per hour during their evening slots. That number can vary considerably depending on the time of day as well as week. If advertisements are aired for less than 15 minutes in an hour, it isn’t for lack of trying; but because FM channels don’t have more ads to run during that hour.

In comparison, on an average, the majority of TV channels keep advertisements to under 12 minutes an hour, while a few push it to 15 minutes.

That’s how FM radio works. If a company goes for even a slight cut in advertisements, the revenue drops, like it did in the case of FM brand Radio Mirchi. The radio station, owned by Entertainment Network India Ltd (ENIL), claims to have cut the number of ads for the year ended March 2018 by 15%, leading to a dip of more than 50% in net profit.

Business is tough, and the Rs 2,800 crore ($415 million) industry may be stuck in a rut. It has been more than 20 years of private FM radio broadcasting in India and radio is pretty much the same as it was then—Bollywood music (except for a couple of stations playing international music), radio jockeys, love gurus and late night romantic music, and, of course, ads.

320

Number of private FM radio channels in India, as of October 2017

The investment that goes into setting up an FM station is high and advertising revenue difficult to earn.

AUTHOR

Harveen Ahluwalia

In her last assignment, Harveen was at Mint, the business daily published by HT Media. At Mint, where she spent about two years, she wrote stories on retail, food and the media business. Harveen is a B.Com (H) graduate from Shri Ram College of Commerce, University of Delhi. She has a diploma in journalism from the Times School of Journalism. Like many folks at The Ken, Harveen talks and tweets a lot. When she isn’t writing or reading, she likes to sketch and doodle. She can be reached at harveen at the-ken dot com.

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