[icernet] War on the airwaves

[Arul Selvan]

  It was the flamboyant launch of Radio Mirchi, the FM channel that 
started belting out nonstop music for Delhi listeners this week. Radio 
Mirchi isn't the only one that has just had a high-decibel launch in 
Delhi. Two other stations have also launched in the last few days and 
they are battling it out over the airwaves -- both for listeners and 
advertisers. It's action time once again for music lovers. One year ago, 
a string of private radio stations went on air in Mumbai, Bangalore and 
smaller cities like Indore and Lucknow. Now the FM radio companies are 
staging a second round of launches and, in the process, transforming 
themselves into pan-India private radio operators. Moving to Delhi is 
only the first step. In the next month, 10 new stations are scheduled to 
launch, doubling the number of private stations dotted around the 
country. The private stations are already pulling in advertisers and 
listeners. A recent IMRB study showed that 62 per cent of Mumbai 
households have FM radios and at least 77 per cent of people who have an 
FM radio had listened to it in the past three months. Most impressively, 
the time spent listening to FM radio has grown dramatically in Mumbai 
from 47 minutes when the private stations launched a year ago, to about 
180 minutes currently according to a Radio City study. 

If advertising doesn't grow swiftly, the FM stations could be in a 
desperate financial bind. The stations are paying crippling licence fees 
to the Government. For example, in Mumbai the five private FM stations 
have spent around Rs 80 crore (Rs 800 million) in the past one year. But 
they made only Rs 26 crore (Rs 260 million) from advertising. The main 
problem is that they paid Rs 48 crore (Rs 480 million) as licence fee, 
which goes up by 15 per cent annually -- a second instalment is due in 
the next week. Other costs include the roughly Rs 660 an hour that is 
needed to buy music rights.

Source:
http://www.rediff.com/money/2003/may/03spec.htm