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Abstract

Great ideas don’t just pop out from no where, they are built on the key communication

points that motivate sales. Radio is entirely a medium of sound, which evokes smells,

sensations and visual images which brings the listeners imaginations into play.

With the advent of television radio lost its popularity and thus its purpose. This led to

sharp declines in the proportion of advertisement spending on radio as compared to other

media. Then there was government’s order on liberalization and privatization. This

brought about loads of changes in the world of radio broadcasting in India. Prominent and

established companies entered the business of FM Broadcasting.

FM broadcasting has breathed a new life into the medium of Radio in the past few

years. Could radio now think this as a new phase of its life or a re-birth? Of course yes, people are today talking only Radio---- Radio Mirchi, Radio City, Red FM and Big Fm

.One will find people with radio sets of different shapes and sizes listening to their

favourite music on roads, in hotels, at home and public. The radio channels are now vying

against each other to provide their best to the listeners.

However one can see that although radio is an excellent medium it has been used to its full

potential and various efforts should be taken to improve it as with proper direction radio

can reach heights as it is the cheapest and a very good medium.



Introduction

Old media don’t’ die! They just bounce back in new avatars. Not so long ago radio had

been written off as fuddy-duddy, down market and not so cool. Television and later “new

media” were touted to being the media of the future. But thanks to technology radio is

making a comeback. In fact, in its new avatar-fm-radio has made it the hippest, coolest

and most with -it medium.

FM radio is a new entity altogether and has to deal with new market dynamics. Media

owners dealing with new markets will virtually have to draw up their strategies as they go

along, create programming that is new, innovative and grab away eyeballs from TV sets

and make them tune into their radio sets. It’s a whole new challenge and competition is

never far away. Ad revenues will also not be easy to come by, as advertisers will expectmedia players to put their money where their speakers are before they commit large sums

of money towards radio advertising. The other challenge for radio in attracting advertisers

is the nature of the medium- radio has always considered being a reminder medium. The

involvement of listeners to radio is low, Vis a Vis television or print media.

While TV is a family medium, radio is personalized. Also advertising of certain product

seems to work very well while some might not. For example, cellular phone service or

auto related products would have a good impact when advertised on radio is primarily

known as a “drive time” medium most people who turn in are doing so while commuting.

Thus the potential if FM is better is bigger town, as the car population is much bigger.

This would be the key when evaluating the medium. Also one must not forgot that radio

continues to be a medium that has tremendous reach among the poor and marginalized

sections of society.

With the coming of more channels, and the emergence of lifestyle advertising, radio will

become a push and pull medium. As said earlier, is not just making a comeback but is

being reincarnated into a new avatar.



Research Objective

Through this project our objective has been to understand the following :

• To find out about the current scenario of the radio industry.

• The reasons for a stunted growth of the industry.

• To launch a new radio station in Sarita Vihar for youth.

• Realizing the needs and wants of consumers and fulfilling them.

• What our radio stations should offer the youth.

Rationale

Sarita Vihar is a residential colony in South Delhi, situated in Mathura Road. It has

number of residential pockets from A to M each of which has approximately 300 to 500

residences. There are many educational institutes nearby so more than 50% people

residing in Sarita Vihar are students. They live either in hostels, flats or as paying guests.

Thus it has the capability of being an ideal location to launch a new FM radio station for

young people. Recently area specific radio stations have been launched in Delhi. Delhi

University has its own radio station DUCR (Delhi University Community Radio, 90.4)

which operates within the campus only. This station will provide entertainment and will

also have local elements like bringing up social issues in the locality which the young

people can resolve by giving their views and also issues related to today’s youth.

Scope of research

The study has been conducted in Sarita Vihar. The data has been mainly collected from

young people residing in hostels, staying as paying guests, flats and also in their own

houses. Most of the samples were students but data has also been collected from young

employed people.



Research Methodology

Through this project we have made an effort to understand the reasons that will help us to

make the launch of our radio station a success and retain it.

• Primary Research:

The aim of primary research was to understand preference and choices of radio listeners.

To understand this we have surveyed 50 youngsters in Sarita Vihar to find out what they

should be offered by our radio station like the types of songs, programmes and talks they

want to listen.

The mode of survey used was questionnaire that consisted of mostly closed ended

question and some open ended questions. It had 12 multiple choice questions that focused

on the type of music, shows, timings, device and favourite radio station. The questionnaire

also consisted of questions asking their favourite radio jockey and further suggestions.

Also Mr. Debmalya, the junior marketing manager of Radio Mirchi, Kolkata gave me an

interview and helped me in trying to understand as to how the station works and looks

after the needs of its consumers.

• Secondary Research

The aim of secondary research was to understand as to what strategies have been followed

by different radio stations to launch radio stations in Delhi. Also, we tried to find out the

parameters which have helped them to grow at a considerable rate. It was also undertaken

to understand how radio advertising is done and what the current players in the market are.

Secondary data collection method was desk research and secondary data collection source

is internet and newspaper articles.



Analysis of primary data

Question: What type of music you prefer?

a. Hindi old Songs

b. Pop songs(hindi)

c. Classical (ghazals etc)

d. Hindi new songs

e. Hip-hop

Type of music

Hindi old songs

26%

Pop

Songs(Hindi)

13%

Classical(ghazals etc)

Hindi new songs

43%

Hip-hop

8%

From our samples, we can clearly see that mostly youngsters prefer to listen to hindi new

songs that is a whooping 43%. This shows that our station should play more of hindi new

songs and release of new albums and bollywood movie songs may be promoted.

Question: At what time you listen to music?

a. Morning

b. Noon

c. Evening

d. Night

e. Anytime



Time preference Morning

5%

Noon

5%

Evening

19%

Night

Anytime

21%

This pie chart clearly states that the maximum listeners enjoy listening to music at night.

So we can focus more on the late evening and night shows. More emphasis should be

given to the type of music, type of shows and radio jockey at this time. We can also earn

maximum revenue through advertisement at this time slot as there are more chances of

high listenership.

Question: What kind of device you prefer to listen to music?

a. Radio

b. Mobile

c. Stereo system

d. Laptop

e. Ipod



DeviceRadio

9%

Mobile

65%

Sterio sstem

4%

Laptop

15%

Ipod

7%

We can see that most youngsters prefer to use mobile as a device to access to FM. Since,

with the advancement in technology almost every individual has a mobile phone, it is easy

to get access to FM. We may position our radio station as the radio station of mobiles.

Quesstion: Which is your favourite FM channel?

a. Big FM

b. Radio Mirchi

c. Red FM

d. Radio City

e. Others

favourite fm channel

Big FM

23%

Radio Mirchi

43%

Red FM

30%

Radio City

2%

Others

2%



Here, we analyse that Radio Mirchi is most preferred radio station followed by Red FM

and then Big FM. So we can research on what strategies these stations have, especially for

the youth and may use this information for forming our strategies.

Question: What type of show you prefer?

a. Chit-chat show with celebrities

b. Count-down show

c. Love-guru (personal suggestion)

d. Review of new movie

e. Traffic update

f. All of the above

show preference

Chit-chat show

18%

Count down

show

23%

Love guru

Review of new

movie

Traffic update

10%

All of the above

23%

It is truly said that variety is the spice of life. The above data shows that youngsters have

different choices in the type of show the prefer. So we will have to structure the schedule

of the programmes such that it’s a perfect blend of all types of shows.

Question: What languages of music you prefer?

a. Hindi

b. Regional



c. English

d. Hindi & regional

e. Hindi & English

f. Regional & English

g. Any of the above

language

Hindi

24%

Regional

5%

English

10%

Hindi and

regional

Hindi & English

44%

Regional &

English

2%

Any of the above

10%

Mainly youngsters prefer hindi and English. So the radio jockes should use these

languages so that there’s better communication and interaction with the listeners.

Question: Do you like News update in between listening to music?

a. Yes

b. No



news update

Yes

60%

No40%

Although, being updated with news is very important for the youngsters. Still, we see that

there are 40% of the youngsters don’t want news update. So our FM radio station should

may have number of news updates, each with short duration so that the listeners don’t

loose interest.

Question: We are targeting management school fest and other college fests to promote

our new FM station. Do you think it can help in increasing number of listeners ?

a. Yes

b. No

c. Can’t say

promotion through fest

Yes

79%

No3%

Can,t say

18%



Most of the youngsters believe that promotion through the college fest will help our radio

station to attract the youth. So we may sponsor Indradhanusha-the fest of Asia pacific

Institute of Management as the college is near Sarita Vihar and has its hostels in Sarita

Vihar.

Question: Besides entertainment, would you like to have programmes like "Jaago Youth

Jaago” and others against corruption, Women empowerment, education and child labour?

a. Yes

b. No

social show

Yes

92%

No

8%

It is interesting to note that most of the youngsters i.e. 93% would prefer social show like

“jaago youth jaago” which would talk about corruption, women environment, education

and child labour. We can create more awareness about the social issues.

Question: Would you like to spend time with celebrities on special days in our FM

channel?

a. Yes



b. No

celebrities

Yes

65%

NO

35%

There are many youngsters who would want to spend time with the celebrities on the radio

station. We can have shows that promote release of music of bollywood movies and have

their celebrities as our guest.

Secondary data



Stations

Last4 Week This Week Gain Loss

Radio Mirchi 98.3 Delhi 24.2 22.2 -1.9

Fever FM 104 Delhi 18.0 19.2 1.2

AIR FM2-Gold 106.4 Delhi 16.9 17.7 0.8

Red FM 93.5 Delhi 10.2 9.9 -0.3

Radio City 91.1 Delhi 8.2 8.6 0.4

Big FM 92.7 Delhi 8.0 7.6 -0.4

Radio One 94.3 Delhi 5.6 5.9 0.3

Oye! 104.8 FM Delhi 2.5 2.9 0.4

AIR FM1-Rainbow 102.6 Delhi 2.2 2.3 0.2

Hit 95 FM Delhi 2.1 1.8 -0.4Vividh Bharati Delhi 1.9 1.5 -0.4

Akashavani Delhi 0.2 0.3 0.0

Others Delhi 0.01 0.01 0.01



TOP FIVE HOURS (AVERAGE AUDIENCE IN 000'S)

Time Period: Current 4 Wks 01'11 to Wk 02'11 (2nd Jan, 2011 - 15th Jan, 2011)

* Average Audience in 000's - Average No. of people present in a station at any given quarter hour

during the time period selected

Stations Radio Mirchi 98.3 Delhi Fever FM 104 Delhi AIR FM2-Gold 106.4 Delhi

Rank Day PartAvg.

Aud(000's)Day Part

Avg.

Aud(000's)Day Part

Avg.

Aud(000's)

1 20:00 - 21:00 612 20:00 - 21:00 505 10:00 - 11:00 711

2 18:00 - 19:00 599 10:00 - 11:00 504 11:00 - 12:00 428

3 10:00 - 11:00 568 14:00 - 15:00 504 07:00 - 08:00 421

4 08:00 - 09:00 568 18:00 - 19:00 419 08:00 - 09:00 412

5 12:00 - 13:00 566 08:00 - 09:00 408 20:00 - 21:00 410

Stations Red FM 93.5 Delhi Radio City 91.1 Delhi Big FM 92.7 Delhi

Rank Day PartAvg.

Aud(000's)Day Part

Avg.

Aud(000's)Day Part

Avg.

Aud(000's)

1 08:00 - 09:00 349 10:00 - 11:00 288 22:00 - 23:00 269

2 10:00 - 11:00 316 21:00 - 22:00 221 08:00 - 09:00 259

3 12:00 - 13:00 285 07:00 - 08:00 201 10:00 - 11:00 205

4 20:00 - 21:00 224 20:00 - 21:00 192 09:00 - 10:00 173

5 11:00 - 12:00 217 22:00 - 23:00 180 20:00 - 21:00 169

Stations Radio One 94.3 Delhi Oye! 104.8 FM DelhiAIR FM1-Rainbow 102.6

Delhi

Rank Day PartAvg.

Aud(000's)Day Part

Avg.

Aud(000's)Day Part

Avg.

Aud(000's)

108:00 -

09:00183

10:00 -

11:00108 22:00 - 23:00 79

220:00 -

21:00164

18:00 -

19:0087 10:00 - 11:00 64

310:00 -

11:00156

08:00 -

09:0087 14:00 - 15:00 61

412:00 -

13:00153

07:00 -

08:0066 12:00 - 13:00 55

5 11:00 -

12:00131 09:00 -

10:0060 20:00 - 21:00 46



Stations Hit 95 FM Delhi Vividh Bharati Delhi Akashavani Delhi

Rank Day Part

Avg.

Aud(000's)Day Part

Avg.

Aud(000's)Day Part

Avg.

Aud(000's)

1 10:00 - 11:00 66 21:00 - 22:00 64 08:00 - 09:00 10

2 20:00 - 21:00 55 11:00 - 12:00 62 16:00 - 17:00 10

3 12:00 - 13:00 53 12:00 - 13:00 60 21:00 - 22:00 9

4 22:00 - 23:00 43 10:00 - 11:00 52 20:00 - 21:00 8

5 21:00 - 22:00 42 13:00 - 14:00 50 22:00 - 23:00 7



About RJ Nitin

Through our primary research, we found that RJ Nitin is the most popular radio jockey

among the youngsters in Sarita Vihar. So we have found out through internet what makes

him that famous. So that we can hire radio jockeys like him. Nitin's affair with Red FM

began in 2006 with Morning No.1 that was fun, witty, and hilarious and reflected his

personality. Popularly known as the man with the Midas touch, he excels at everything he

does and has also won numerous accolades for his work including the prestigious RAPA

for 'Best Male Jockey'.

With a listenership of 1-1.2 million in Delhi alone, Red FM’s morning show hosted by

radio jockey (RJ) Nitin was the channel’s money spinner, before it got embroiled in a

controversy.RJ Nitin of Red FM wins the Media Excellence Award for: Best Infotaining RJ of the

Year. RJ Nitin of Red FM, the voice of Delhi's morning show, was awarded with a Media

Excellence Award for the year 2010 at FICCI's Golden Jubilee Auditorium, New Delhi.

The 4th edition of the Media Excellence Awards 2010, held on Saturday, 27th March

felicitated the best and most deserving in the national and regional media industry.

Jonathan Nitin Brady, well-known as RJ Nitin won the title of 'Best Infotaining RJ of the

year' for excellence in infotainment on radio. This event was organized by 'Media

Federation of India'. Many known faces from the fields of politics and media were present

at the occasion.

Royalties

FM is primarily a music channel, so the question of royalties is relevant. The Indian

Protographic Record Society (IPRS) and Phonographic Performance (P) Ltd. (PPL) are

supposed to hold all the rights of royalties. They are demanding Rs. 1,500 per hour (as

against Rs. 100 per hour, at which they are supplying music to AIR), PPL is demanding a

royalty of Rs. 250 per hour of needle time, the actual duration of a piece of music. The

IPRS is demanding Rs. 100 per hour. The IPRS claims royalty for the original composers

and authors of music.



Cost - Aspect

A Licencee pays Rs. 6000/- per hour.

Add Rs. 1,500/- for the music.

Add Rs. 3,000/- for the technology, salaries and other expenses. An hour long show thus

costs Rs. 10,500.

10 - Minutes have been set aside for advertising. One minute is reserved out of 10 -

minutes for social awareness advertising. Thus, advertising time available for sale is 9 -

minutes.

In other words, 18 advertisements each of 30 seconds can be accommodate in an hour.

This is the high target. Besides the tariff card should be modest, considering the limited

range and listenership supposing a 30 - seconder costs Rs. 500 at prime time for 18 suchspots, the total revenue generated is Rs. 9000/- . Another estimate puts the production cost

of an hour long programme around Rs. 6,000/-. Add Rs. 6,000/- of the licensee fee to AIR.

Studio hiring costs are between Rs. 500 - Rs. 1000 an hour. The total expenses are thus

Rs. 12,500 to Rs. 13,000 per hour.

Some Basic Technical Knowledge

Any radio setup has two parts:

• The transmitter

• The receiver

The transmitter takes some sort of message (it could be the sound of someone's voice,

pictures for a TV set, data for a radio modem or whatever), encodes it onto a sine wave

and transmits it with radio waves. The receiver receives the radio waves and decodes the

message from the sine wave it receives. Both the transmitter and receiver use antennas to

radiate and capture the radio signal.

When you listen to a radio station and the announcer says, "you are listening to 91.5 fm

“what the announcer means is that you are listening to a radio station broadcasting an fm

radio signal at a frequency of 91.5 megahertz. Megahertz means "millions of cycles per

second," so "91.5 megahertz" means that the transmitter at the radio station is operating at

a frequency of 91,500,000 cycles per second. Your fm (frequency modulated) radio can

tune in to that specific frequency and give you clear reception of that station. All fm radio

stations transmit in a band of frequencies between 88 megahertz and 108 megahertz. This

band of the radio spectrum is used for no other purpose but fm radio broadcasts.



Common frequency band includes the following…

1. DU FM 90.40

DU FM 90.40 is a Community Radio Station. It is a Delhi University effort and was

started on 2007. It is situated in the school of Open Learning at the university. Widely

known as DUCR, it was made popular by the praiseworthy works of the students and

faculty.

2. Radio City 91.1

Delhi is a hub of music aficionados. Radio City 91.1 claims to satiate them by providing

the most amazing music. It is very popular among people from all walks of life. Music is

omnipresent. All you need to do is tune in to 91.1 and listen.

3. Big FM 92.7

BIG FM 92.7 is a private FM radio station in India. It is owned by the renowned Indian

businessman Anil Ambani. It covers up to 45 cities in India and is in the process of

stretching to more cities. It is also widening its network outside India having started with

Singapore.

4. Red FM 93.5

93.5 Red FM which was established in the year of 2003 has made its way to the top class

in a short span of time. It is so popular due to the variety of programs and the radio

jockeys are accepted by the entire youth of Delhi. The office is situated in Jhandewalan.

5. Radio One 94.3

Radio scene in Delhi has found a new dimension with the advent of Radio One 94.3. It

provides a new experience for the listeners every time. It takes care to broadcast old and

new songs without annoying repetitions. RJs with young mind and ideas have captured a

huge audience by now.

6. Hit FM 95



Hit 95 FM is one of its kinds for it is the only complete English radio channel in Delhi. It

has a huge mass of followers who love western classical, rock, hip hop and others. It is an

amazing music station supported by good coverage, quality and equally talented RJs.

7. Radio Mirchi 98.3

Radio Mirchi 98.3, formerly called as Times FM, has network all over India and it is

private owned by the Entertainment Network India Ltd (ENIL). Mirchi in national

language means chilli. This channel with the tagline, ‘it’s hot!’ has managed to attract

countless listeners with its unique programs and outlook.

8. AIR FM Rainbow 102.6

AIR FM Rainbow which runs on 102.6 in Delhi operates in 10 cities. It is a nationwide

network of FM channels managed by the All India Radio. Since it is state run, it features

English, Hindi as well as regional language songs. It also broadcasts news for an hour.

9. Fever 104

Fever 104 FM has been in the air in Delhi since October 2006. It is owned by the private

sector HT Media Ltd which runs newspapers and social networking site. It certainly is a

channel that helps you to unwind with its intoxicating music, audio effects and cool RJs.

10. Meow FM 104.8

Meow FM is established by India Today Group. It is basically a talk-based radio channel

and is accessible in metro cities such as Mumbai, Kolkata and Delhi. You can catch the

meow programs in Delhi by tuning into 104.8. It has advertisements that makes people

smile. It has started a social networking site called Meri Meow recently.

11. AIR FM Gold 106.4

AIR FM Gold in Delhi was started on Independence Day in 2001 and is aired in 3 other

cities in India. It is owned by Government and is a branch of Prasar Bharati. Its former

name was FM-2. Due to the eclectic nature of the programs aired in this channel, it

quickly grabbed attention.



Advent of FM Radio

The arrival of 'Moving Pictures' with sound and then 'Television' were expected to be the

death knell for 'Radio'. However Radio has not just survived repeated predictions of its

demise but grown tremendously. It has benefited listeners and advertisers alike and earned

the status of a 'Constant Companion'... What allowed Radio to accomplish this feat? Read

on for the long journey the Radio industry has covered thus far.

It was way back in 1895, that Guglielmo Marconi invented an antenna to send and receive

radio signals. It took quite a while before Reginald Fessenden developed the first radio

receiver in 1913. However, experts give a lot of credit to David Sarnoff who actually

conceived what is called as the "radio music box". It was Sarnoff who suggested that radio

should be mass- produced for public consumption. His persistence paid off in 1919 whensuch sets were available for general purchase. This saw the beginning of what was later

looked on as the 'Golden Age of Radio'.

Early 1920s saw the launch of commercial radio. People in households would gather

around the radio to listen to their favorite programs much as they do today with TV. Radio

became the first medium delivering entertainment to the masses in their homes. The 1st

paid announcement on radio was a 10-minute capsule from Howthorne Court; a Queens

based Real Estate Company. This era was characterized with 'block programming' wherein

radio offered something to everyone. News, drama, sports; live musical recordings would

be presented in 30 or 60-minute programs. A network soap opera could be followed by a

15-minute newscast followed by one hour of a concert.

Then in the 1950s TV began to catch the public's attention. Audiences were charmed by

the audiovisual experience of TV. A large number of popular shows moved from radio to

TV. That was not all, as the radio industry was also losing a large number of talented staff

to TV.

At this point in time, radio experts discovered an opportunity that only radio could

provide. They realized that radio was the only medium that could be used while doing

other things, like getting dressed for work, cooking a meal, traveling to office, studying

and more.

Radio turned 'local' and moved to what is known in the industry as 'Format' programming.

This era also spawned two of radio's greatest strengths: immediacy and local service.



Format radio strategy was based on providing the same kind of entertainment to a selected

audience, throughout the day, seven days a week.

As the story goes, Storz and McClendon used to frequent a local malt shop, which had a

jukebox. They observed that the customers would usually come and play the same songs

that they liked, over and over again. In fact, the staff serving these people would end up

playing just the same songs even when the shop was closed.From this insight emerged the

"Top 40" format or the "Contemporary Hit Radio (CHR)" format were the most popular

hits would be played on a higher rotation.

This led to a change in the way radio time was being sold. Sales people shifted from

selling programs to selling commercials. It also led to a shift in the way radio programs

were scheduled. As radio was being used as a background medium of entertainment, it had

to be relevant to the listener at every point of time in the day. The shows therefore had to

be reflective of various day parts in the life of the listener.

Irrespective of the form it came in, format radio definitely made radio not just survive the

onslaught of TV but also made it grow tremendously. Being the only medium that could

be carried and used wherever you are, it could update you about your world throughout

the day while providing you with the entertainment you like all the time. Radio became

"The Constant Companion".

The total number of radio sets at the time of independence in 1947 was a mere 275000.at

that time a radio receiver used to be a status symbol in this country. But today its

possession is taken for granted. According to estimates, there are radio sets in about 105

million households in the country.

History of Indian Radio

For more than 4 decades, the Government of India did not permit private radio stations to

broadcast in India. Then history changed its course. In 1993, the Government allowed

private FM operators to 'buy' blocks (chunks) on All India Radio, prepare programming

content, book commercials from advertisers and broadcast the whole lot. Within 4 years,

(1997-98), the FM Radio advertising and sponsorship business grew to Rs. 93 crores with

Times of India's Times FM & Mid-Day Group's Radio Mid-Day becoming the main

players.

Then, in June 1998 the Government, through its electronic media regulatory body Prasar

Bharti, decided not to renew contracts of private FM operators. Not surprisingly, the

advertising revenue fell by 50% within a year!



This time, the Government gave the green light to privatize radio in India. July 6, 1999

was the historic day when the Government announced that 150 new FM channels would

be licensed across 40 cities.

And in 2000, the Government auctioned licenses for private FM channels to bolster the

revenue. And the focus on metros was evident in the bidding. Expecting to collect Rs 800

million from auctioning 108 licenses, the government had to actually face mass

withdrawal of bidders because of the huge license fee. A handful of serious bidders chose

to remain.

In response to the Government's offer, many companies bid for the licenses to operate in

key markets. But the going was not so easy. Many gave up, unable to shell out the high

license fee. For instance, the bidding price for the Mumbai license was reportedly to the

tune of Rs 9.75 crore. Others dropped out saying the business was not viable. So, in effect,

the competition shrank, players consolidated and the Government extended its deadline.

Today, there are roughly 10 players who will operate approximately in 37 cities across the

country.

The government collected close to Rs 4.6 billion as license fee for the privately run FM

radio channels in 40 cities. New Media Broadcasting, a Zee Group company, which

focused mainly on the smaller towns, won the largest number of bids.

The first round of bidding - for 76 channels in 26 cities, garnered close to Rs 3.5 billion.

The government got the highest bids - Rs 97.5 million from each of 10 broadcast

companies - for stations in Mumbai. Interestingly, the bids for Hyderabad and Nagpur

came next, each for Rs 77.2 million and Rs 74 million, respectively, while the bids for

Delhi were Rs 71.2 million each



Licence Fee and revenue sharing model

Currently, FM players pay annual licence fees, which go up by 15 per cent every year.

Private FM radio sector would shift to a revenue-sharing model from the existing licence

fee regime. However, revenue-sharing also exists in the media sector. The objective is to

“make FM radio a success story”. It’s better to keep the revenue-sharing figure low than to



have a failed project. There has been debate on whether to recommend a revenue-sharing

structure or a fixed amount for a period of 10 years; it is firm on revenue-sharing now.

Revenue-sharing will follow payment of a one-time entry fee through a process of

bidding. Revenue-sharing figure is quite low at around 4 %.

While the private FM players had sought revenue-sharing in the band of 2-2.5 per cent, the

panel has fixed it at 4 per cent.

Setting up new radio stations

After the second round of privatization, the number of FM radio stations targeted is

around 300 to 400. The panel also suggested that players wanting to enter the sector in the

second round of licensing need to have a technical viability clearance by a financialinstitution on the financial viability of the project. It has also recommended to the

government to release additional spectrum for the use of FM radio companies so that the

number of companies operating in one centre can go up.

Future of Radio Industry

FM Radio can play its part in building a stronger business future for India. Providing free-

to-air local broadcasts of music and entertainment, helpful information - traffic advisories,

community announcements and public service messages provide a real value-added

service. But at current levels of advertising support, each radio station is reeling under the

brutal financial impact of high costs. With more players in the fray the FM radio industry

would grow and also enhance the government’s yield from licensing radio naturally.

The new India deserves an active private FM radio sector. It can provide a level playing

field with benefits for listeners, for advertisers, employment & career options. Spearhead

the government objective of growing the FM radio business in India.

With the government ready to reduce the license fees it will help in attractingnew palyers

like reliance which had earlier backed out only due to the entry fees.also government

allowing foreign players to enter he Indian market it will help the industry grow. Virgin

group has already started exploring the Indian market for suitable partners. various radio

stations are coming up with IPO for example Radio Mirchi thus helping them expand.

The future looks bright as the reach of radio is expected to raise post the increase in the

number and quality of players in the industry. It is on the basis of these key drivers of



growth, it is being predicted that radio's share in the total advertising pie will see an

increase in the medium term.

SWOT Analysis

Strengths:

• Recently, the government has agreed upon revenue-sharing model, which is 4 % for the

growth of the radio stations. So that they can develop themselves well because this

industry is still in an introduction stage.

• The success of private FM stations, and reveals that radio listenership habits have

changed considerably; not only are listeners tuning into it more often but also sticking to

radio for longer hours everyday.

• The advertisers, who would depend on word-of-mouth, pamphlets, brochures or ads in

local supplements of newspapers, are welcoming the opportunity.

• Radio is considered as a background medium, because people can listen to radio anytime

and anywhere they want. It is also a free medium.

• 90% of India has access to radio which is unmatched by any other media.

• Radio also reaches to uneducated village folk who do not read print publications. At the

places where the literacy rates are low where people hardly read newspapers and radio is

the only medium that they can understand. They can’t afford a TV set. Therefore radio is

more popular.

• Radio is the least cost medium and it helps to reach mass audience with various

backgrounds. Radio offers its reach frequency and selectivity at one of the lowest costs per

thousand and radio production is relatively inexpensive.

• Radio is considered as a medium where the “Proximity to purchase” is very high.

• Radio is a complement to another media. Therefore, other media or the advertisers or

agency can use this medium for brand recall.

Weakness:

• One of the major weaknesses of Radio is that there is very less differentiation in the

programmes that are aired. Most of the stations plays much of the music that is played

consist of Hindi Film songs, and therefore it is difficult to differentiate between the

programmes of the different channels.



• 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.

• No proper research available - research is very important for any advertising segment.

Research is the main base to attract client and get more revenue. But, in India there is no

proper research is available. Many stations are conducting their own research which can

be biased.

• Radio-only nature of radio communication is a tremendous creative compromise. An

advertiser whose product depends on demonstration or visual impact is at a loss when it

comes to radio. And like its radio message creates a fleeting impression that is often gone

in an instant. Many advertisers think that without strong visual brand identification the

medium can play little or no role in their advertising plans.

• Increase in listenership numbers but no increase in ad revenue. This is the situation that

every radio channel is facing.

• Short commercials

Opportunities:

• Getting copyright licenses from the government for running mega events which are aired

on the AIR radio station and have been restricted to be aired on other private stations.

• Launching a radio station with 24-hour news channel

• Tie-ups with BEST or railway authority for playing the FM in train and in bus.

• The launch of Private Radio FM has managed to create a set of ‘New Listeners’ for the

medium

• The new radio stations which will come in future they can have venture with the college

or university campuses. And can play their station which will exclusively provide with the

information relating to that university/college campus.

• With the coming of the many more new players in the radio industry each channels can

position themselves quite different from others, like, if some station is targeting the health

conscious people then their programming strategy will vary accordingly. And then it is

easier for the advertisers also to decide on which channel to advertise.

• Allowing private FM players to start news and current affairs programmes.



• One has to constantly innovate, and that is the challenge. Brand building is thus much

more difficult. At the same time, we are very bullish, and gung-ho about this whole

enterprise.

• Leaves huge scope for innovation in local market

Threats:

• The biggest threat to private radio industry players is ALL INDIA RADIO. AIR is the

biggest player in India because of its reach, low charges, government channel etc…

• 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.

Advantages of Radio

1. Largest Reach and Frequency

Radio offers an excellent combination of reach and frequency. The average adult listens

more than 3 hours a day, radio builds a large audience quickly and a normal advertising

schedule easily allows repeated impact on listener. 90% of India has access to radio which

is unmatched by any other media. Radio is not only the medium of hearing news but also

is a source of entertainment and advertising for the rural masses. Radio also reaches to

uneducated village folk who do not read print publications. At the places where the

literacy rates are low where people hardly read newspapers and radio is the only medium

that they can understand. They can’t afford a TV set. Therefore radio is more popular.

2. Broadly Selectivity

Specialized radio formats with prescribed audiences and coverage areas enable advertisers

to select the market they want to reach. From a marketing perspective, radio has the ability

to reach prospects by sex, age group, ethnic or religious background, income group,

employment category, educational level or special interest with a format that adds even

greater dimensions to its already strong personal communication environment.

Radio’s high overall reach and its ability to provide numerous formats make it a

multifaceted medium. Because of the relatively low cost of production, advertisers are

able to adapt commercials to the various stations then buy, a strategy that would normally be prohibitively in television.



3. Cost –Efficiency

Radio is the least cost medium and it helps to reach mass audience with various

backgrounds. Radio offers its reach frequency and selectivity at one of the lowest costs per thousand and radio production is relatively inexpensive. National spots can be produced

for about one tenth the cost of a TV commercial, and local stations often produce local

spots for free. Also, radio ads can be produced very quickly.

4. Creativity and Flexibility

Radio is the most flexible medium because of very short closing periods for submitting an

ad. This means an advertiser can wait until close to an air date before submitting an ad.

With this flexibility of simple formats such as voice only can be created almostimmediately to reflect changing market conditions or advertisers can take advantage of

special events or unique competitive opportunities in a timely fashion.

Radio also offers timeless, immediacy, local relevance and creative flexibility. The

personal nature of radio, combined with its flexibility and creativity, makes radio the

choice for numerous product categories. Copy changes can also be made very quickly.

While radio may be one-dimensional in sensory stimulation, it can still have powerful

creative impact. Radio has been described as the theatre of the mind. The musical formats

that attract audiences to radio stations can also attract attention to radio ads. Audiences

that favor certain music may be more prone to an ad that uses recognizable, popular songs.

5. Proximity to Purchase

The mobility of radio and its huge out - of - home audience gives the medium an

advantage enjoyed by few other advertising vehicles. In the competitive environmentfacing most companies, it is imperative that brands achieve consumer reinforcement as

near as possible to the purchase decision. Radio’s daily frequency offers scope for

continued messages and hence the consumers are more likely to remember that product

and consumer lend up buying that product.

6. As a Complement to Another Media

In some cases, radio is the primary medium for local advertisers. However for national

advertisers and most large local and regional firms, radio is most often used as



complementary medium to extend the reach and frequency of primary vehicles in their

advertising schedule.

A fundamental marketing strategy for radio has been its ability to successfully work with

other media to increase reach and frequency or to reach non-users and light users of other

media. The radio industry realizes that the bulk of its revenue comes from advertisers who

use radio as a secondary medium.

7. A personal medium

The human voice is the most personal means of communication. Radio gives the

advertisers the opportunity to take advantage of the right combination of words, voices,

music, and sound effects to establish a unique “one-on-one” connection with prospectsthat lets you grab their attention, evoke their emotions, and persuade them to respond.

Radio can be targeted by lifestyle formats and is more efficient than other media from a

cost and production standpoint. As a result many advertising agencies will move their

budgets into radio.

Disadvantages of Radio

1. Misunderstanding

Sometimes there might be a misconception regarding the radio ad as it is only heard. In

television the chances of such misconception is less, as it is audio as well as visual.

2. Poor Radio Attentiveness

Just because radio reaches audiences almost everywhere does not mean that everyone is

paying attention. When a consumer is listening while doing some work or traveling in a

car, he or she often switches stations when an ad comes and divides his or her attention

between the radio and road.

3. Fragmented Audiences

The large number of stations that try to attract the same audience in a market has created

tremendous fragmentation. If a large number of radio stations compete for the same

audience, advertisers who want to blanket the market have to buy multiple stations, which



may not be cost effective. However, in radio’s quest to continue to fine tune its reach,

some advertisers wonder if radio is offering too many narrowly defined options. For those

product categories with broad appeal, it is difficult to gain effective reach and frequency

without buying several radio stations and networks.

4. Chaotic buying procedures

For an advertiser who wants to include radio as a part of national advertising program, the

buying process can be sheer chaos. Since national networks and syndicated broad cast do

not reach every geographic market, an advertiser has to buy time in individual markets on

a station- by-station basis. This could involve dozens of different negotiations and

individual contracts.

5. Short Lived and Halfhearted Commercials

Radio commercials are brief and fleeting. They can’t keep like a newspaper or a magazine

ad. Radio must compete with other activities for attentions, and it does not always

succeed. Only 20 % of time availability restricts the frequency of message exposure.

6. Creative Limitations

The audio-only nature of radio communication is a tremendous creative compromise. An

advertiser whose product depends on demonstration or visual impact is at a loss when it

comes to radio. Many advertisers think that without strong visual brand identification the

medium can play little or no role in their advertising plans.

7. Limitations of Sound

Radio is heard but not seen, a drawback if the product must be seen to be understood.

Some agencies think radio restricts their creative options.

8. RJ needs training

It is very important that the Radio Jockey is trained enough to deliver the ad. Sometimes

the voice really matters. If the voice is irritating then there is a chance that the campaign

may flop.

9. No proper research available



In India, there is no proper research has been available on the area of radio listening,

which will be very helpful for the advertisers to decide them on advertising plan and

budget and other matter. Therefore, there could be a problem for the marketers in the

sense that they might advertise on wrong channel at a wrong time.

Radio Stations Divide Their Days And Their Rates.

Radio stations divide their rate cards intodayparts .The exact divisions vary from station to

station.

6 am -10 am

Morning drive

10 am – 3 pmDaytime

3pm – 7pm

Afternoon drive

7pm- 12am

Nighttime

12am – 6 am

All night

Rating services measures audiences for only the first four day parts because all night

listening is very limited and not highly competitive. Heaviest radio use occurs during

drive times (6-10 am and 3-7pm) during the week (Monday- Friday).

This information is important to advertisers because usage and consumption vary for

different products. For example, radios morning drive time coincides with most peoples

desire for a steaming, fresh cup of coffee, so its great time for advertising coffee brands.

For the lowest rate , an advertiser orders spots on a run of station (ROS) basis, similar to

the ROP in newspaper advertising .However, this leaves total control of the spot

placement up to the station. So most stations offer a total audience plan (TAP) package

rate, which guarantees a certain percentage of spots in the better day parts if the advertiser

buys a total package of time.

Limitation:



• Sample size is too small i.e 40.If we would have taken large sample i.e more than

100,we could have studied in more detail.

• Time whatever we got for our research was too less which can be constraint for our

study.

• We did our research in sarita vihar, New delhi only. Though we want to launch

our FM station for Sarita Vihar only but this can be one of the limitation.

• Since RJ Nitin is the most popular among the youngsters in Sarita Vihar, we

should hire radio jockeys with similar personality traits.

Recommendations:• The launch of radio station for youth in sarita vihar is feasible for us.

• More of the shows should be playing new hindi songs.

• There should be news updates and shows concerning social issues

• There may be shows with celebrities.

• There should be a perfect blend of different types of shows including chit chat

show, count down, love guru, new movie review and traffic updates.

Conclusion:

After studying about the current scenario of the radio industry and analysis of primary

data about the needs and wants of youngsters residing in Sarita Vihar, we have concluded

that launching of radio station ‘Spicy Fm’ for youth is feasible in Sarita Vihar. We have

analysed the strength, weaknesses, threats and opportunities of some radio stations in

Delhi. This research should be of great use in the launch of Spicy FM with the tagline

‘MasaledaaRrrr Zzindagi!!’

fm station1

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