Privatization of FM Radio In India

Harish.K.G - 3511110124 Syed Jaffar - 3511110127 Arun Kumar - 3511110128 Shreeram S - 3511110129 Prasanna T - 3511110130

Summary

AIR began operations in the year 1936, and then after the introduction of LPG which allowed the private players to participate actively.

After reforms in 2001 Government, opened auctions for

Licenses for private players, but ended in unworkable". Even after escalating license fee only 22 out of 108 licenses become operational, but which too didnt made any profits.

 By 2007 there were 280 FM Channels including 160 from AIR

and 120 from private operators.

Maximizing ad revenues became a important issues for private

operators. To be profitable FM operators had to tackle the issues such as demographic profiles, Royalty for music and relaxation policy on airing news.
FM operators followed certain strategies to overcome issues

faced by them such as mix of shows, CSR project and also acted as an solution providers.
FM radio now has reached 200 millions of country population

and has potential to go up to 750 millions if small towns are tapped.

Macro environment of FM radio Pre & Post Privatization

Only few channels were operating before privatization.

By Oct 2007 280 FM channels made operational after privatization.

License fee were made heavy post to privatization. Only certain 4 cities were made operation prior to privatization.

More cities and small towns were covered by FM operators post to

Privatization.
Sound quality was better and reachable only limited homes prior to

privatization. Shows were presented in HD quality made clear audio and were able to cover even the small towns.

Micro environment of FM radio Pre & Post Privatization

Prior to reforms government telecasted for limited hours a

day. Post to privatization FM operators made it functional for 24 hours. Online FM radio Broadcast are done post to privatization only. Joint ventures of local and abroad FM radio were made post to privatization. Targeted audience project benefited the operators which is been done post to privatization .

Strategic Issues Faced by Private FM Operators

While growth of the radio broadcast industry looks

exciting, there are numerous issues facing the radio broadcasters. However, the industry feels that these are mere start-up issues; radio should feature in the media planner's radar as a serious medium.
Because of the new government policies there will be more

number of stations and then competition will also increase. This is one of the biggest threats it faces. With no particular differentiation in the music. So, there is a fear of losing its brand loyalty.

 There were there main issues have to been tackled by Private

operators to be profitable.
Fragmented Audience - the large number of the audience in

India is fragmented in various remote places. And therefore, the percentage of listener tuned to anyone station is likely very small.
Royalties became a big burden for private players, since in

smaller towns the revenue earned was less.

Taking up with the government for relaxation policy of FM

private operators airing news and sports running commentary.

Strategies followed by FM operators

Private players started to concentrate more on metro markets, as

of now 18% of all private players are moving towards metro markets.
Programming was backed by extensive research of audience

demand and mood lifting.

Some channels chose to target particular audience category.

To improve audience loyalty some channels provided

information on traffic in main roads.

 Introduction of HD-Sound in FMs (recently Radio City

introduced this technology)

A mix of music of different types was delivered by skillful

radio jockeys.
FM channels acted as solution providers to advertisers by

understanding advertisers needs and offering advice to tailor make the ad suiting their audience.
Few channel providers had even gone abroad Big FM Media

Corp Singapore joined hands for broadcast Bollywood music.

Comments
It is always good to have both private and public

participation in FM sector.
Privatization of FM radios become more necessity, since

the Govt. was not able to predict the exact target audience.
In the Coming Phase III of auctions, it is been predicted

that more number of licenses will be allowed (Open Bids).

 Allowing FDI is more vital for this sector, since it might bring

in more foreign advertisers and feel them secure.

Since more amount of research are being taken up by private

players which helps AIR to clearly understand the Audience demand, Mood lifting.
The quality of sound had been improved with state of art

technologies which clearly shows that FM players are not technically back.