“But they are back again
 Like a long lost friend
 All the songs that I loved so well……

…Its yesterday once more,
Do we remember”

These nostalgic lines from a famous Carpenters’ song reflect the way FM has revived radio in India. After television had entrenched itself firmly in almost every nook and corner of the country, transistor sets disappeared from the shelves in Indian living rooms, reducing radio to nothing more than a mere symbol of nostalgia. The radio was no longer turned on in the house and the All India radio (AIR) bulletins and popular Vividh Bharati programmes became a thing of the past, only to be replaced by round the clock TV news and music entertainment shows on satellite television.

However, the advent of FM radio seemed like the reappearance of a ‘long lost friend’ to the medium. Today, FM has earned its place in urban India as a fast, catchy medium, not as a competitor to television but as a complimentary medium.

Although FM was first introduced in Chennai in 1977 and in Jalandhar in 1982, it was only in 1993 that FM acquired a media profile synonymous with fast music and youth culture. This was when FM slots began to be leased out to private producers. On 15 August 1993, an FM channel was launched in Mumbai, which leased nine hours of radio time to private producers like Times FM, owned by the Times of India group of newspapers, and to Radio Star and Radio Midday. The AIR charges a fee of Rs 3000 ($63.5) per hour against the lease while the progranmme producers charge a minimum of Rs 250 to Rs 300 ($5.3-$6.4) for a 10-second commercial. The programmes are designed for English/Hindi speaking urban youth and feature musical programmes, radio chats, contests, quizzes and phone-in based interactive programmes. They became instant hits.

FM programmes are catchy, fast and brash and in general carry a mood of casualness and informality. In the metropolitan cities, FM programmes are a craze in paan shops and small retail outlets, snack bars, city buses and taxis. Nobody takes FM seriously and yet almost everyone ends up listening to it. What’s more, thanks to FM, radio has acquired a revenue earning profile. In India, radio advertisements bring in a revenue of Rs 620 crore ($131 million) annually, with 60 per cent of the amount coming from private radio (FM) broadcasters. Industry forecasts indicate that by 2012, the radio advertising industry is likely to be worth Rs 1800 crore ($381.3 million).

As far as programme content of FM radio is concerned, it is 90 per cent music, mostly a cocktail of western and Hindi songs. Radio’s potential revenue earning capabilities were in fact illustrated by FM stations, though FM is way behind television and the print medium in terms of advertising shares. Advertising rates in FM radio are significantly lower than that of television. For example, a 30-second prime time slot on Star Plus, a Star TV channel, costs anywhere between Rs 10 to Rs 12 lakh ($21,181-$25,418). In contrast, a 30-sec slot on FM station Radiocity, where the content is also provided by Star, costs mere Rs 5000 ($106). This of course is the highest rate FM can afford to charge, and rates in some FM stations can be as low as Rs 800 to Rs 1000 ($17-$21) for a 30-sec commercial. However, it costs a great deal less to set up an FM station than a satellite channel!

However, the cheap advertising rate factor has been a boon for FM stations and the reason is quite obvious. The low rates draw a significant number of small traders and businessmen who could never afford to advertise on television or newspapers. Big advertisers such as corporate houses would not have advertised too heavily on FM in any case. By opening up an advertising opportunity for small businesses, FM has created a win-win situation for everybody. What's more, the marked difference in rates and client profile ensures that the sources of advertisements for big media such as television and print, and FM are different, outlining the fact that FM radio does not pose a threat to any of them.

FM stations can cover a radius of up to 120 kilometres, which means an audience comprising millions if the station is based in a metropolitan city like Mumbai and Kolkata.

The government is keen to encourage FM stations mushrooming across small cities and towns in India. In addition, there are moves to do away with the system of fixed license fee, amounting to a minimum of Rs one crore ($211,631) annually, to the revenue sharing model in the phase 2 policy of FM broadcasting. Moves are also afoot to permit FM broadcasters to add news to their programme content, something which FM producers have been demanding for long. These steps could add a fresh impetus to the proliferation of FM stations in the district towns of India and finally complete the revival of radio in the country.

The growing popularity of FM radio following its success in the big cities has resulted in private radio broadcasters moving into small towns. Following the government’s resolve to do away with the hefty annual licence fee, to be replaced by a one time entry fee and an annual payment not more than 4 per cent of the revenue earned, FM stations have become rosy prospects for media investors. In fact, bulk of the applicants for FM broadcasting licences constitutes national and regional newspaper houses.

FM has arrived or is about to arrive in small Indian cities such as Siliguri and Asansol in West Bengal, Raipur in Chattisgarh, and Itanagar in Arunachal Pradesh. The fact that an FM station can be started with a capital of between 2 to 5 crore ($423,531-$1,058,829) has made FM all the more attractive for investors.

In Siliguri for instance, there are already three FM stations with reports of one more getting ready to kick off. In this town and its suburbs with a population of 5 lakh ($10,588), Radio High (92.7), Radio Misti (94.3) and Radio Nine (91.9) have already made a mark among the audience. Radio Nine began broadcasting from 12 March and provides its listeners, programmes of local interest such as music, weather, stock exchange and movie songs.

Bobby Gupta, CEO, Radio 91.9 FM said that as a cheap, accessible and portable medium, radio still has the scope to reach out to a large number of people. Gupta is thrilled with the huge audience response his station has received so far, even though Siliguri is not a big metropolitan city.

About 30 young, smart and dynamic employees full of innovative ideas are working in the station, said Ayon Banerjee, the programme executive of Radio Nine.

FM radio’s success has also shown that radio can be an effective channel for local and regional advertising campaigns. X