Private radio FM players on a song

Private FM players are expecting dramatic changes in the domestic radio industry close on the heels of the government's announcement to liberalise the FM sector.

A P Parigi, chief executive officer, Entertainment Network said: "Radio Mirchi will definitely expand its reach to other cities and will endeavour to retain its premier position in India. Substantial investment will have to be made to expand the network of Radio Mirchi in India."

Abraham Thomas, chief operating officer, Red FM, said: "While we are awaiting details on the government's announcement, one would now see significant changes in content, genre and demographics."

According to Thomas, private radio stations will now begin to play music for target audience and one can expect several new formats to be launched in the coming months.

Ambar Basu, vice president, finance, Radio City, said multiple stations in cities would certainly help towards delivering more segment relevant programming to targeted audiences in a local area. Radiocity has already stated its desire to expand to 25 cities.

KPMG, a management consultancy firm, in a recent report on the Indian media had stated that radio industry in India generated revenues of around Rs 220 crore annually and would grow to Rs 800 crore by 2010.

The report states that India has an estimated 180 million radio sets and commercial radio has the potential to account for 8 per cent of the media spends in the short and medium term to 10-12 per cent in the long run.

Adds Rajesh Jain, entertainment business head and executive director: " With this announcement, we expect the revenues to go up even more."

According to radio players, the ad pie for radio will be impacted dramatically.

Manajit Ghoshal, chief financial officer of Mid Day Multimedia, said 2 per cent of the total advertising pie flowed into radio in India compared with 8-16 per cent in developed countries such as the US and UK.

Ghoshal felt this sector would attract foreign investment. The company which operates Go 92.5 FM is looking at strategic partners to expand ationally.