Radio stations generated revenue of INR 8 bn in 2008; expected to reach INR 18 bn by 2012. Share of Radio advertising was 3.3 % in 2008; expected to reach 4 % in 2012. The report provides a snapshot of the market. Privatization of Radio discusses phase I and phase II rounds of FM licensing in India. An overview gives a quick picture of the market with estimated advertising revenues and share, and profile of advertisers on radio. An analysis of drivers reveals that increasing radio listener base, favourable demographics, opportunities in Phase III expansion, political advertising, increasing advertising by small local brands and introduction of new performance measurement tool is driving growth in this sector. The key challenges identified include royalty, lack of content differentiation, Government Regulations, low share of ad spend and bargaining tactics used by advertisers. The report identifies the current market trends including emergence of visual radio, satellite radio, community radio, internet radio, sales alliances and players going niche. The competitive landscape profiles the major players in this sector in terms of business description, number of FM stations and FM frequencies of each player. The report also provides details key developments in this sector.

1. FM Radio Industry - India
December 2009

2. Executive Summary
Radio stations generated a revenue of INR X bn in 2008 ; expected to reach INR Y bn by 2012
Share of radio advertising was x% in 2008; expected to reach y% in 2012
Market Most stations use same level of genre of content with little or no differentiation
There are over x radio stations beaming across over y cities in India
LE
Drivers: Challenges:
P
– Increasing radio listener base – Royalty
– Opportunities in Phase III expansion – Lack of content differentiation
Drivers &
Challenges
–
–
–
– AM
Increasing advertising by small local brands
Favourable demographics
S
Political advertising
Introduction of new performance measurement tool
–
–
Government regulations
Bargaining tactics used by advertisers
Emergence of Visual Radio
Satellite Radio
Community Radio
Trends Internet Radio
Sales Alliances
Players going Niche
All India Radio (AIR), covers x% of India's area and reaches y% of India’s population
Company A leads the overall market with share in revenue terms in excess of x%
Competition
Company B leads in terms of highest number of stations
Majority of players are backed by media houses with interests in media activities like TV or Print
FM RADIO INDUSTRY – INDIA.PPT 2

3. •Privatization of Radio
•Market Overview
•Drivers & Challenges
•Trends
•Competition
•Key Developments
FM RADIO INDUSTRY – INDIA.PPT 3

4. Privatization of Radio in India was a lengthy process
Time Line Radio Privatization
• Private broadcasters sold slots on AIR’s FM channels for certain key cities, the service was later
19--
discontinued in 19--
19--
PLE
• Privatization of FM - Phase I Policy
• Bids were invited for allotting licenses for a ten-year period
20--
20--
SAM
• Phase I FM broadcast licensing, auction was conducted
• Licenses issued to private radio broadcasters
• In February 20-- TRAI was asked to give recommendations for Phase II licensing of FM radio
20-- • In August 20--, TRAI presented its recommendations on the regulatory framework for private FM
stations
20-- • Announcement of Phase II Policy of privatization of FM
20-- • Licenses for x cities were auctioned
Source: Knowledge@Wharton “Strong Signals: India's FM Radio Stations Brace for New Competition” August 2009 ; “Sector Focus: Resurging FM Radio” ; afaqs “Market
Transformation: Radio” October 2009; CII KPMG Report “Indian Entertainment Industry: Focus 2010” ; ENIL “Indian Radio Industry”
FM RADIO INDUSTRY – INDIA.PPT 4

5. Radio Market has a good growth potential
Market Overview Advertising Revenues and Share
• There are over x radio stations beaming across ~x Advertising Revenues
cities in India INR bn % Share of Radio in Ad Pie %
• Radio programming during primetime consists of at 20 4
LE
least x minutes of music, y minutes of Ads and z
minutes of jockey talk 15 3
• Radio advertising penetration in India is low as
compared to other nations
MP 10 2
A
Demand for radio advertising is expected to increase as 5 1
S
the players across industries feel the impact of recession
0 0
• Radio’s national footprint is expected to rise with
2004 2005 2006 2007 2008 2009e 2010e 2011e 2012e
phase III round of licensing
Radio Advertising Share in Total Ad Spend Advertisers Profile on Radio
% Media
y Others
10 z x%
u%
5 x
w v% y% FMCG
Telecom
w%
z%
0 Retail t%
India China Singapore World Finance Durables
Source: IBEF ”Radio Ga, Ga”; ENIL “Radio Mirchi”; CII KPMG Report “Indian Entertainment Industry: Focus 2010”; “Report on the Indian Private FM Radio Sector” May 2008;
Majmudar & Co; ”The Indian media and entertainment industry”; Livemint “Consolidation, greater reach and growth ahead" December 2008
FM RADIO INDUSTRY – INDIA.PPT 5

6. Drivers & Challenges - Summary
Drivers Challenges
Increasing radio listener base Royalty
Opportunities in Phase III expansion Lack of content differentiation
Increasing advertising by small local
Government regulations
brands
Favourable demographics Bargaining tactics used by advertisers
Political advertising
Introduction of new performance
measurement tool
FM RADIO INDUSTRY – INDIA.PPT 6

7. Trends - Summary
Emergence of
Visual Radio
Players going
Niche Satellite Radio
Trends
Sales Alliances Community Radio
Internet Radio
FM RADIO INDUSTRY – INDIA.PPT 7

8. Majority of players are backed by media houses with
interests in other media activities like television or print
Competition Overview Private players – No. of Stations
• In terms of reach, All India Radio (AIR), covers x% of A a
India's area and reaches y % of India’s population B b
• Company A leads the overall market with a share, in C c
LE
revenue terms, in excess of x% D d
E e
P
• Market comprises of small and large players
F f
Small players normally have two to four stations
G g
SAM
Large players are present nationally or in multiple regions
Majority of players are backed by media houses with
interests in other media activities like TV or Print
– Such players are in position of providing benefit of cross-
advertising to advertisers
H
J
K
L
I
k
l
h
i
j
• Regulations at present do not permit consolidation of M m
business, before five years of operations N n
Large players are thus forging strategic sales tie-up with O o
the regional or small players P p
• Metro cities are over crowded with FM stations Q q
x% of all private FM stations are located in metros R r
Metro cities have diverse set of people, hence attract S s
maximum attention of advertisers T t
U u
• Radio companies spend a lot of effort on branding
V v
Companies try to differentiate by building loyalty through W w
RJ shows
Source: Company Websites; “FICCI-KPMG Media & Entertainment Industry Report”; ENIL Radio Mirchi Annual Report 2008-09 ; “The case of Diversification: Case Study
analysis of the nature of competition in emerging markets” October 2009
FM RADIO INDUSTRY – INDIA.PPT 8

9. Major Players (2/7)
Company FM Frequency No. of Stations Business Description
Company A 92.7 45 • It is a radio initiative from ABC Ltd
• It launched its first Station in September 20--
• A network of x stations including an FM station in Singapore
• Major cities covered include Hyderabad, Mumbai, Delhi,
Kolkata, Mangalore, Jalandhar, Ajmer, Bhopal and Surat
Company B 94.3 4 • Started its service on January 1, 20--
• It is a private FM radio station for the state of Kerala,
operated by ABC in Kerala
• Services in Cochin, Thiruvanathapuram, Kannur and Thrissur
Company C 104 4
• It broadcasts in Mumbai, Bangalore, Delhi and Kolkata
• It is operated by ABC Ltd
Company D Various 26 • It is an educational FM radio station in several cities of India
Frequencies • Operate as ‘media cooperative’ with day-to-day programmes
contributed by educational institutions, NGOs, government
and semi-government organizations, UN agencies, Ministries
• Medium of broadcast is English, Hindi or regional language
Note: This list is not exhaustive
Source: Company Websites SAMPLE FM RADIO INDUSTRY – INDIA.PPT 9

10. Thank you for the attention
The FM Radio Industry - India report is a part of Research on India’s Media and Entertainment
Industry Series.
For more detailed information or customized research requirements please contact:
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FM RADIO INDUSTRY – INDIA.PPT 10