FM Radio rocks in South India… and how!

27 Jan,2012

By Robin Thomas


The FICCI-Deloitte report on Media and Entertainment in South India says that radio in South India will grow with a CAGR (Compounded Annual Growth Rate) of 20 per cent by 2015. The reach of FM radio is said to be far higher in South India than its counterparts in other parts of the Country. According to Ms Nisha Narayanan, Senior VP Projects and Programming Red FM, South India has 28 per cent share of existing radio channels and it will have 28 per cent representation in FM phase III as well.


Besides the larger FM stations like Red FM, Big FM, Radio Mirchi and Radio City, there are many local or smaller FM stations as well, such as Radio Hello, Club FM, Best FM, Suryan FM and Radio Mango, to name a few. Unlike the North, FM radio stations in the South play music in multiple languages as prominence is given to the local language. Big FM for instance plays only Kannada music in Bengaluru whereas in Hyderabad it plays Telugu and Hindi music. Club FM, a Kerala-based FM station, plays mainly Malayalam music with a mix of Tamil and Hindi music whereas Red FM in Andhra Pradesh mainly plays Telugu.


Rabe T Iyer
Nisha Narayanan

Rabe T Iyer, Business Head, Big FM, the radio arm of Reliance Broadcast Network was of the opinion that compared to the rest of the country, the reach of radio in south India is much higher. Mr Iyer was also quick to point out that in some key markets like Bengaluru, Chennai and Hyderabad the reach of radio is significant, higher than most news channels, and is on comparable terms with leading GECs.


“Given the inherent strengths of the region backed by a strong film and music Industry, added to its rich cultural diversity, it is not surprising that radio in South India has relatively higher penetration than other regions. The south of India has done some innovative radio over the years. It continues to be a huge focus area for all players given that it has three big metros which are important from both listenership ratings and revenue perspective,” he added.


Nisha Narayanan of Red FM said, “South has been an integral part of radio and its growth in India. Radio is more close to people’s lifestyle here than any other part of India. Radio Ceylon had created a strong base for radio even before the advent of FM radio in India. FM radio penetration is the highest in South India, particularly in Tamil Nadu. In the long term, obviously there is tremendous growth and we are in the early stage of that growth.”


Shaan Menon, Manager Content, Club FM noted, “FM in South India is going to take a huge leap as it is waiting for the next bidding. Even the smaller cities and small townships in Kerala will get a chance to taste the feel and warmth of FM culture. South Indian film music is the strongest music industry in terms of production. Although CD sales are deeply affected due to rapid downloads, FM industry is full of the new genre of music and music directors.”


Challenges and Opportunities

Some of the key advertisers in the south are retail, textile, jewellery, real estate, hospitality, FMCG, consumer durables etc. Big FM claims its advertising and content ratio to be 1:4, while Red FM says it plays 45 minutes of music and 15 minutes of ads every hour during off peak season whereas in peak season the inventory time is slightly more. One of the reasons why radio is said to be doing well in the south is because of its strong regional film and music industry. “Given the diversity, there is tremendous potential for localization which radio can capitalize on and deliver. The opportunities to create a unique brand identity in this market are immense,” explained Mr Iyer.


He further said, “A challenge any product faces in its life cycle is finding the ‘differentiating quality’ after the market matures. The same applies to the radio industry and its many players. With a market that has matured and grown manifold and poised to grow further, novelty and innovation in content will be a key component for success and will decide further growth of the category.”


Ms Narayanan on the other hand observed that time has come for radio to look for new revenue streams. She was also of the view that radio stations must experiment beyond the traditional programming formats, and that music royalty still remains a challenge. “Content has to evolve a lot as most of the programming strategies are music based. We are still into traditional programming formats and the time has come to take it to the next level. The ability to create new revenue streams is ideally needed at this hour, as the only source of revenue for radio stations has been advertising sales. Music royalty is another area of concern as we pay needle per hour, whereas the international markets follow the revenue sharing model. These are the challenges faced nationally too.”


The road ahead

The much awaited FM Phase III policy seeks to extend FM radio services to about 227 new cities. Phase III will cover all cities with a population of one lakh and above, simultaneously there will be a total of 839 new FM radio channels in 294 cities. The local players in particular expect to further expand their radio station into the southern markets. However, one of the possible challenges after FM phase III is launched could be to attract listeners to the medium and then to sustain its listenership.


Mr Iyer of Big FM observed, “We foresee huge growth in the radio industry in the coming years. There will be more stations leading to more innovation in content and communication. This will result in more revenues and hence more profitability for all players.”


Ms Narayanan remarked, “South India has 28 per cent share of existing radio channels and it will have 28 per cent representation in phase III as well. Radio will be a national medium and the true mass medium with the number of channels coming in Phase III. In the south 75 to 80 per cent of the licenses are for the ‘D’ and ‘C’ cities which will be a great boost for advertisers as a medium breaking across demography.”


Mr Menon stated, “The challenge during FM Phase III is to convince the small town public that FM radio is equally or more entertaining than TV. It will be difficult to make them taste the sample, but the current popularity of FM industry in the main towns will definitely help to fight the difficulty of convincing the new public.”


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2 responses to “FM Radio rocks in South India… and how!”

  1. andhow.FM says:

    No, we are AND HOW!

  2. Anonymous says:

    Great news for all my friends who stays in Chennai.

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