Year 2015 in review

2015 started with healthy ad spends. The completion of the Stage I of Phase III auctions, migration of existing operators from Phase II to Phase III and the announcement of the hike in the foreign direct investment (FDI) cap for FM radio brought much cheer to the industry.

Companies spent approximately INR10.56 billion to acquire 91 new stations and will spend INR39.33 billion as they migrate their existing 243 stations to Phase III in 2015¹. The high prices paid by companies clearly indicate that investors are bullish on radio. India is expected to see 839 additional radio channels in 227 new cities, most of them being tier-II aer-III cities². Despite some key contentious issues of high reserve prices for the auctions, high license fees, the 15 per cent limit on the total number of frequencies, etc., continue – the industry is resilient.

Last year also saw two deals namely Jagran Prakashan’s acquisition of Radio City (Music Broadcast Privand tite Limited)³ and Entertainment Network India Limited acquisition of TV Today Group’s Oye FM⁴.

The radio industry is enjoying a steady CAGR (2011-2015) of 14.5 per cent and grew by an estimated 15.1 per cent in 2015 - to reach revenue of INR 19.8 billion⁵. Radio’s share in the overall media and entertainment industry pie continues at approximately 4 per cent of the total advertisement market size.

Key trends

India’s radio stations continue to focus on Film based music for the most part in order to appeal to the broadest possible audience. The key trends for the year are:

Industry challenges

Future outlook – Tuned In

There’s plenty of scope for a greater reach for FM radio. With the commencement of Phase III, we expect the radio industry to grow robustly and outpace the growth of the overall advertising industry in the coming years.  With a forecasted CAGR of 17.1 per cent till 2020, industry revenues are expected to double to INR 43.6 billion by 2020⁵