Financial Daily from THE HINDU group of publications
Wednesday, Nov 27, 2002
Marketing - Market Shares
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Private FM radios hit AIR pocket
Shyam G. Menon
MUMBAI, Nov. 26
SEVEN months after private FM radio went on air in Mumbai, it is yet to significantly challenge the dominance of the Government-owned All India Radio (AIR) in the segment.
The city has the highest number of private FM players in India - Millennium Broadcast, Entertainment Network India Ltd (ENIL), Mid-Day Multimedia, Music Broadcast India Pvt Ltd (MBIL) and Living Media.
They seem to have got themselves into a bind, there being little difference in content between one station and the next. With no discernible audio signatures of stations tuned into, sizable public loyalty towards the new entrants is missing. For the moment, therefore, those in high spirits don't hail from the swanky offices of private players, but the comparatively staid premises of AIR.
An AIR survey in August 2002 showed that of 4,000 households enumerated in Mumbai, Thane and Raigad, 81 per cent listened to AIR Metro, 65 per cent to AIR Gold and 41 per cent to private FM stations. Thirty-five per cent were unaware of private stations.
"This is the first market where there is more than a single private player in competition with the state radio offerings, and it is only natural that it should take a while for the public to sort out what is being offered to them by each of us," Mr John Catlett, CEO (Radio), Star India Pvt Ltd, said on the subject, last month.
"If I were to hazard a guess, I would be surprised indeed if more than a tiny handful of radio's most fanatical fans could tell you the names and associated frequencies of all five of the new private stations," he said.
The culprit is private FM radio's operating economics.
The licence fees agreed to has influenced the audience profile. "It might have been easier to differentiate among us if we were individually pursuing more tightly-defined specialised audiences. But since we all have to meet the extremely high licence fees, no station can afford to aim for any smaller share of audience than will be attracted to the most widely acceptable programming," Mr Catlett, associated with Radio City, pointed out.
In the short term, that means advantage AIR and its two existing channels here - FM Metro and FM Gold. AIR has a tradition of in-house studies, the August 2002 regional survey being one such.
It showed that among FM stations, AIR's Metro led in listenership followed by AIR's Gold and ENIL's Radio Mirchi. Regular listeners of FM Metro amounted to 33 per cent while those for FM Gold were 20 per cent. AIR's Metro has a reach of 18 million people while FM Gold has a reach of 16 million people. "There is no dilution in the listenership of FM Metro," an AIR official said. According to the survey, FM Radio is available to 62 per cent of urban households and 39 per cent of rural households. More importantly, a large number of households enumerated could not identify private channels. What is the way out for private players ?
"It is certainly possible to create distinctions between radio stations, but it is a process that will take time," Mr Catlett said.
But the pressure to think creatively and get ahead at the earliest will be there, for in theory multiplicity of FM stations means lower advertising costs.
"It could be said that the sudden availability of perhaps 8,000 or more new advertising slots per week would dampen the prices we can demand. But as local, national and international advertisers here learn the effectiveness and efficiency of radio advertising, I have no doubt at all that five stations can succeed and thrive in a city as big as Mumbai," he said.
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