The Resurgence of Radio in India

BACKGROUND NOTE

These programs generally consisted of commentaries on current affairs; review of Indian press coverage; news bulletins; talk shows on socio-economic, cultural, historical and political subjects; and classical, folk and popular music from all corners of the country. The major ESD services included the General Overseas Service, Hindi Service and Urdu Service. Though FM radio had long been popular in Western countries, AIR started offering FM channels only in 1977.

It conducted various music and drama competitions in order to discover and encourage talented artists. Due to its immense popularity, extensive reach, easy accessibility and cost effectiveness, radio became a primary communication and entertainment medium during the 1970s and 1980s attracting listeners as well as advertisers.

However, from the mid-1980s, television (TV) began to lure away radio listeners. The success of TV serials like Ramayan, Hum Log, Buniyaad and Mahabharat further contributed to radio's downfall. These serials attracted millions of audiences across the country, resulting in a shift of loyalties from radio to television.

As TV audiences grew, advertisers began allocating larger sums for TV advertising. Tapan Pal (Pal), President and CEO of ZenithMedia, summed up the issue: “In the golden days of radio, clients such as Dunlop assigned as much as 15-20% of its spends on radio. The industry spend was in the vicinity of 7-8%. Today, it is down to less than 1%.” By the early 1990s, in most metros, radio existed mostly as a part of two-in-one systems (cassette recorders).

Analysts felt that the government's restrictive policies also contributed to radio's downfall to some extent. They felt that even with an extensive reach of over 98%, the penetration of the radio network remained stagnant in the 1990s (Refer Exhibit III for the Indian radio market) because the government failed to reform its broadcasting policies. Lack of good scripts and innovation in programming were also affected the quality of radio programs.

Unlike a TV program or commercial that depended mainly on technology and special effects such as lighting, cinematography and camera angles, radio programs depended only on writing (script).

Analysts also blamed the Indian advertising agencies for the decreasing ad spends on radio. They felt that the advertising agencies failed in exploiting the potential of radio to its fullest and simply treated it as a remainder medium. On the other hand, advertisers blamed the lack of creativity in radio programming as compared to TV.

The absence of a monitoring system (to record the level of response to programs) for radio programs that could provide agencies with information to approach clients (to recommend radio) also contributed to radio's downfall. In 1993, the government allowed private players in the FM sector by permitting them to take blocks (i.e. time slots to offer their programming content) on AIR, for FM transmissions.

The purpose of this move was to earn revenues for AIR (by way of license fees) and provide more variety for listeners. The major players in the private FM market during that period were Times FM (of the media giant Bennett Coleman & Co) and Radio Mid-Day (of the Midday Multimedia group).

The programs offered by these private stations were much more listener-friendly and innovative than AIR's programs. As a result, the channels became very successful (in the mid-1990s) and attracted high advertising revenues. By 1997-98, the private FM business in India had grown to Rs 930 million.

The growing popularity of private FM channels resulted in decreasing revenues for AIR as these FM channels attracted most of the ad revenues. In June 1998, Prasar Bharati^[3] stopped the operations of private FM channels, reportedly in an attempt to improve AIR's revenues. But in July 1999, the government again decided to privatize FM broadcasts and came out with a ten-year license deal. The government refused to allow any foreign ownership in the sector. In 2000, the government called for bids for FM licenses.

By late 2000, AIR had established a network of 283 broadcasting centers (including over 180 full-fledged stations, four relay centers, three Vividh Bharati commercial centers and one auxiliary center) and 146 medium frequency (MW), 50 high frequency (SW) and 87 FM transmitters. In spite of the advent of new communication media such as satellite and cable TV and the Internet, radio broadcasting sustained its popularity through the years.

FM, the most popular channel, had the largest reach of over 60%. With the entry of private players in the mid-1990s, FM radio became more popular, attracting huge ad revenues.
According to a survey conducted in February 2000, radio was still popular with over 58% of the rural and 48% of the urban population in India. With such a huge listener base, analysts felt that radio was still one of the primary mass communication mediums in the country.

^[3] The Prasar Bharati Act, which came into existence in September 1990, was implemented in September 1997. The Act aimed at freeing AIR and the state-owned TV entity Doordarshan from the immediate control of the Government of India and provided for the establishment of the 'Broadcasting Corporation of India' (BCI), an autonomous body for regulating electronic media.

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