She’s without doubt one of India’s smartest, most successful Radio leaders who brings to the table of one of India’s largest FM Radio networks a rare understanding of the intricacies of the creative, marketing and monetizing parts of the radio business. Meet Nisha Narayanan, COO – Red FM. Excellent professional, business head and, I’m privileged to say, a good friend for years now. Here’s what she’s written and shared with us — her views and recommendations on the opportunities and challenges for FM Radio in the Digital Age in India.
By Nisha Narayanan
The radio industry is a very small part of the broadcasting universe. At 2300 odd crores of rupees, we comprise of about 5% of the broadcasting sector in India.
Although the reach and impact of radio in India includes the public service broadcaster and community radio when I say ‘radio’; it is considerably greater than its rupee value. Its modest market share is probably the reason why the path to digitization of radio is so poorly defined. Radio should be as much a part of our master plan for the ‘Digital India Vision 2020’.
Radio is a medium that is portable, effortless, affordable, wide-spread yet influential and engaging. India has successfully implemented digital migration for television. It’s now the radio industry’s turn
It talks about digital infrastructure as a must-have utility for every citizen. If we go by available research data on media habits it is alarming to note that the consumption habits of audiences are changing almost every quarter. Once Digital India is implemented, there is no doubt that media consumption patterns in the country will go through a huge, dramatic change.
FM Radio’s current situation
As a media market, we have the best of both worlds: multiplicity of genres as well as diversity of languages. Radio is a powerful medium that gains from these advantages. It is not only interactive, but is also very local in nature and is free of costs, unlike C&S television. There are many technologies we need to experiment with to realize the vision of Digital Radio in India, while remaining true to radio’s fundamental character as an interactive, free-of-cost, local medium.
FM Radio – India’s second fastest growing medium
Radio is growing at steady speed. Today it is the second fastest growing sector after internet in India. While Digital is growing exponentially, private FM radio in India is growing at a formidable 14.5%, and that is primarily because of FM expansion in Tier 2 and Tier 3 cities, although the ad-pie continues to be only 4%. This is not very encouraging as internationally, in countries like US, the radio ad pie is about 14 %. However, we hope to see it grow to 7% in India by 2020.
FM Radio – what it is up against in India
The unfortunate thing is that the world has gone digital while we are still talking analogue FM technology with a horizon spanning over 15 years. What I mean is, in this digital age, one of the biggest drivers for broadcast media is technological advancement, which could drive both content and revenue.
AIR on DRM
For instance, the public service broadcaster, All India Radio, has introduced Digital Radio Mondiale (DRM) transmitters. These are now capable of transmitting signals in analogue, digital or even simulcast mode (that is, a mix of both analogue and digital). This progressive technology has replaced 37 obsolete Medium Wave and Short Wave transmitters of AIR. However, private FM broadcasters are still operating on analogue FM technology and paying a huge license fee for it.
The streaming and mobile challenge
Though the trend of AIR shifting to DRM is encouraging, the challenges faced by terrestrial radio from streaming platforms (web and mobile) cannot be ignored. The digital audio entertainment sector is fast changing. The likes of Saavn and Gaana are establishing themselves and have become a major competitor to the radio industry today. While they are seamlessly interactive, they also offer on demand services etc. They are luring audiences away from broadcast radio, just as Netflix and its competitors are taking away mass audiences from television and cinema.
The challenge – not rival platforms, but changing tech
In a nutshell, listeners want to take control of their music, and thus the penetration of broadband internet makes it easier for them. Consumers have become platform agnostic; content is king and customer convenience is paramount.
So, the challenge is not one Private FM player competing with another player; the challenge is the battle of FM players against the ever-changing technology around it. The listeners here have far more options to listen to their kind of music rather than FM radio – there are web radio, podcasts, audio-on-demand etc.
iHeartRadio is another such global example that provides an all-in-one listening experience, bringing a variety of content to the listener, be it music, news, talk radio, sports or comedy. Along with aggregating most US radio stations, iHeartRadio then distributes this content over the internet through web or mobile, whichever medium is desired by the digitized listener. Now this is something we need to experiment with in India, and adapt to our conditions.
No FM tuners on high-end smartphones
In India, another challenge is that highend smart phones have done away with FM tuners altogether. Decision makers in the mobile industry view internet radio as the way forward. Their logic is simple: data brings in money while FM radio is free. This is an area of concern. The importance of terrestrial radio has to be properly understood beyond its INR value.
Besides regular programming and the entertainment that it provides, it has always played the age-old role in disaster management. When the telephone system is down and neither the television nor the internet works, FM radio is usually the only medium of communication available during emergencies, broadcasting useful news and information. We have seen this during the Chennai floods; during cyclones in Orissa; the Mumbai floods of 2005: all again.
No news is bad news
I should point out here that India is one of the very few countries in the world wherein news is not allowed on private radio stations. This has had a very damaging effect both on the growth of radio as well as its impact. Local news is the lifeline of radio broadcasting. The government expects us to use FM radio for disseminating information during emergencies. I want to stress on the point that, in the absence of any kind of news-gathering experience, the ability of private and community radio broadcasters to disseminate news during disasters would be limited.
Inadequate measurement hurts monetization
Another challenge for us is the ability of digital media – and social media – to reach out to the retail market to generate revenue, much more efficiently than the traditional radio industry. The bottleneck here is the lack of proper measurement systems in terrestrial radio. There is no proper data available on the radio industry, especially when compared to digital, and that makes the business self-limiting.
Consider ‘pop-your-phone’ DAB Radio
In an ideal scenario, all strata of society should consume digital radio as a mass medium. However, in the current situation, the cost of digital receivers (upward of Rs. 13,000 per receiver) becomes an entry barrier for most listeners. In this context, the DAB transition in Norway is worth citing. Norway has switched from FM to DAB radio, through the ‘pop-your-phone’ route. With a simple dongle, every smart phone becomes a digital radio! I think we should consider learning from their experiment.
It’s not just the cost of digital receivers: the switchover cost to digital broadcast technologies like DRM is exorbitant for broadcasters as well. I doubt if radio operators can support such investments at present. The issues therefore are clearly about availability, access, and the cost of digital radio for both listeners and broadcasters. Because of this, the progress of DAB is quite sluggish in India.
No real digital radio in India, unfortunately
Consumer electronics companies have been reluctant from the beginning to invest in this technology. This does not help matters, as they refuse to mass-produce compatible receivers. This unfortunately makes the term ‘digital radio’ in India mean radio-like services such as audio streaming via wireless broadband, rather than digital terrestrial radio.
The way forward
One can’t rule out the potential of digital audio streaming and aggregators like iHeartradio, NPR, BBC, and other podcast platforms. It is mainly through this yardstick that we can suggest some measures for the radio landscape in this country to be ready for the future.
Give us the DRM and DAB lowdown
First and foremost, we need relevant information on radio digitization from the Ministry of Information and Broadcasting. Though All India Radio has been experimenting with DRM for quite some time, we know next to nothing about the impact of DRM implementation and its implications.
This should be followed by a study on the current scenario of DAB receivers in India. And, further to that, a roadmap to expand the availability of cheaper digital radio sets in the country. This should include digital car receivers as well.
The current cost of digital receivers is a huge concern. We have the classic example of the high cost of World Space receivers, which was too big a challenge for a price-sensitive market like India. The DAB platform today needs to advance beyond the clock-plus-radio image and continue to provide solutions such as dongles and adapters. We now need to explore compatibility of DAB with other devices like Apple TV, Amazon Fire TV, Google Chromecast etc.
FM Radio needs support
The long journey could even begin with bringing DAB in tune with DTH Set Top Boxes, and providing sops to manufacturers of mobile phones to enable handsets with DAB receivers. We should, in fact, look at a phased transition to DAB, with internet radio as an add-on digital feed for existing FM radio operators.
The advantage of radio is that it is free. Data costs money. In the interest of reaching out to a larger audience, perhaps TRAI should ask mobile operators to allow radio streaming for free. This will mean larger coverage and higher acceptance of the medium.
The music royalties issue
Of course, this would also mean that the government should step in and give us clarity on music royalties on digital audio. As FM broadcasters pay huge royalties to audio music companies, the government should intervene to allow non-interactive digital music rights to FM operators at a nominal add-on cost. That is the only way to make the business viable. This will ensure that radio transmission in the country is seamless, uninterrupted, and thus dependable.
The crux of the matter is that the internet has grown by leaps and bounds while FM radio in India has been the last among broadcasters to “negotiate” digitization. It has become a chicken and egg situation now. Will broadcasters invest in digital technology before we have widespread availability of digital receivers, or vice versa? That clarity can only come from the government.
Radio is a medium that is portable, effortless, affordable, wide-spread yet influential and engaging. India has successfully implemented digital migration for television. It’s now the radio industry’s turn.