After a sluggish growth in radio advertising in 2001, the radio market has been witnessing steady growth in the last 5 years. The radio market on an aggregate basis has grown consistently by 4.4 per cent in the last 2 years. United States has been leading the growth and has demonstrated growth exceeding the growth in the last year. The global radio industry is projected to increase from $44.6 billion in 2005 to an estimated $58.8 billion in 2010, averaging 5.7 per cent compound annual growth. Slow-growing public radio license fees will hold down increases in EMEA (Europe, Middle East & Africa) and Asia Pacific to 3.3 per cent and 4.2 per cent respectively. Digital broadcasting will play a key role in improving radio advertising but its positive impact will be partially offset by the growing audience fragmentation that will dampen ad rates. Satellite radio is projected to boost spending in the United States and Canada, and provide modest incremental revenue in Asia Pacific.After the second FM radio policy, India is growing towards 300 radio stations as compared to 21 stations earlier. 91 cities will be covered by the new radio stations, compared to 21 cities earlier. Thus, listeners in over 70 cities, largely in the B.C and D categories, will be listening to private FM radio stations, earlier serviced only by the State broadcaster. Over 40 companies will be operating in the industry as compared to 7 earlier.
Of the total advertising spend in India the radio industry’s share is about 2 per cent. This share is expected to rise substantially over the next ten years, going by the explosive growth in the ad inventory and the wide reach, especially the lower segment markets that the radio industry can now offer.
Based on these factors, coupled with other regulatory corrections such as migration to a revenue-share regime and allowing Foreign Direct Investment (FDI) up to 20 per cent, the sector is emerging for tremendous growth over the coming years.COLLECTED BY: RISHI KAPOOR
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