Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Radio industry: An overview - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Dec 17, 2007

    Radio industry: An overview

    In this article, we shall provide an overview of the radio industry in India. We shall look at the key characteristics of this media segment and the factors that differentiate it from the other media segments such as television and print media.

    In India radio broadcasting began in 1935 by AIR. In 1999, the privatization of FM through the Phase I policy was undertaken. However, the phase I policy failed due to a high license fee structure. Of the 108 licenses issued, only 22 operated and one was closed down.

    Phase II policy
    The Phase II Policy enabled the industry to enter a high growth trajectory. Before the Phase II policy, there were 22 stations and by the end of 2007, 266 stations are expected to go on air.

    This was possible due to a more favorable fee structure. In the phase II policy, annual license fees are 4% of gross revenues or 10% of reserve OTEF (One time Entry Fee) whichever is higher.

    Key players
    The key players operating the FM radio stations in India are Adlabs, South Asia, ENIL, Radio city and Dainik Bhaskar.

    Share of radio in the total ad spends
    The share of radio in the overall advertising pie at approximately 3% is much lower than various developed and developing countries worldwide. Globally, the share of radio in the advertising pie is around 5% in countries where the medium is still in a growth phase and around 10-12% of the advertising pie when the medium reaches a mature phase.

    Source: ENIL IPO prospectus

    Characteristics of the radio industry

    Low advertisement rates
    Radio is a cost effective medium for the advertisers. Radio advertising rates are low on cost-per-thousand basis as compared to other media.

    Low content costs
    Radio does not require any commissioned original content unlike other media such as print and television. Royalty fees have to be paid for the music content to Phonographic Performance Limited (PPL) and Indian Performing Rights Society (IPRS) and certain music companies.

    Prime time differs from television
    The prime time for radio listenership differs from prime time television viewing. Radio listenership peaks in the morning, afternoon and late nighttime slots, while for television the prime time is the night slot.

    Reaches the required audience
    Listenership of radio as indicated by the Indian Listenership Track (ILT) survey is the highest among the younger audiences (15-29) and the SEC A audiences. The research indicates that almost 70% of SEC A (higher socio economic class) audiences listens to radio everyday. This is the audience most sought by advertisers.

    Audio medium
    Radio is not a visual medium like television and thus people prefer television to radio. Besides this, the only source of revenue for the FM radio operators is advertisement revenues and they do not receive any subscription revenues from the listeners.

    Thus, radio has its advantages as well as disadvantages. In the next article, we shall outline the growth drivers for the radio industry.



    Equitymaster requests your view! Post a comment on "Radio industry: An overview". Click here!


    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 22, 2017 (Close)


    • Track your investment in ENTERTAINMENT NETWORK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Compare Company With Charts