Radio Waves FM radio industry in India in the form of mergers and consolidations is the only solution, that appears to be playing on the minds of several FM players might just reignite the radio industry by bringing the medium on the national advertising map but opinions are mixed about the effects of this trend on the industry. Marketing alliances between radio stations for monetisation and sustainability has become a
finances for the coming year, are earmarking investments in radio sector. The corporate profiles looking at radio investments include media conglomerates and financial companies. There might be news of flux in ownership of radio stations in 2010 with media ownership gaining ground. The current Information and Broadcast ministry regulations restrict the tradability of radio licenses till the completion of five years of
Merger the only solution for FM industry
standard in the Indian radio industry. But now radio stations are eyeing station acquisitions to increase their footprint and corporate houses are planning investments to break into the Indian radio business. A lot of companies are looking at radio and while planning
existence, which ends in 2010. The Association of Radio Operators of India (AROI) has been lobbying with the government to reduce the restriction of tradability of license from the current five years to three years. Apart from
this, other regulations like nonavailability of multiple frequencies, license term period of ten years also pose a hindrance for the industry. Even big players would not hesitate to give away ownership of their non viable stations in the smaller towns. On the other hand, big conglomerates are on the look out for stations in money making smaller towns to increase their footprints. Many stand alone stations in smaller towns confirm on condition of anonymity that they have been approached and lured with the promise of big m o n e y. T h e s e s t a t i o n s , a r e however still considering these business propositions over giving up their stations to these bigger players. The Phase II policy of limiting ownership of radio broadcasters in a city might pose a hurdle in the proposed acquisitions however. The radio industry is hopeful that if I&B considers allowing multiple frequencies in Phase III, there might be a surge in radio acquisitions next year. Figuring out ways to sustain themselves, there might be an interesting battle if smaller stations plan such consolidations throughout the country. This might encourage more advertisers to invest in the medium if smaller players deliver value for money. There is also a downside to such alliances as it might result in further price wars where players would be forced to sell their inventory at lower costs. In the current scenario, the Indian radio industry comprises a large number of players, making it difficult for advertisers to reach them. Consolidation could enable the radio broadcasters to package radio stations and sell them to a d ve r t i s e r s i n c l u s t e r. T h e consolidated group can also provide the advertiser a national reach and command a higher price for their inventory.
January 2010 | Aavishkar Dish Antenna Programme Guide | 23