A New Tune

If there's anything that AIR has learnt over the past years it is that the future of radio may well be in narrowcasting. Hence, the emphasis on fm. Eighteen months ago, AIR wanted to launch a 24-hour fm news channel, but realising that such a station won't be commercially viable, it tweaked its plans and in September came up with FM2-a news (a third of the content) and classic entertainment channel for Delhi, Mumbai, Chennai, and Kolkata. But why is fm so critical to Baijal's gameplan? Here's the reason: fm is the money spinner. Just the four fm stations of Delhi, Mumbai, Chennai, and Kolkata raked in a fifth of AIR's revenues last year. And that when the broadcaster does no selling to speak of. The money from fm is also important to keep alive AIR's public services. Take a look at these numbers: AIR's annual expenditure this year will run into Rs 785 crore, while its revenues will be no more than a tenth of that. The shortfall is made up by way of grants from the government. But here's the problem: of the Rs 567 crore grants given to AIR this year, only Rs 56 crore (planned grants) were earmarked for capital investments. The rest went into paying bills.

FM2, then, is an attempt to grow the fm pie, and at the same time ensure that AIR gets its due share of the growing market. While fm listenership is still small and restricted to metros, there is no denying that growing commuting time and changing aspirations in rural India are creating a new market for fm. FM2, in particular, seeks to deepen the listener base. Way back in 1977, when FM1 was launched, starting with Chennai (it's now in nine cities), its predominantly music content became popular with young listeners. The listener profile is more or less the same today.

With FM2, AIR is trying to rope in a different segment of the population-the older audience, in the 25-45 age group. Accordingly, the channel's focus is on infotainment, where a third of it is news (private fm stations cannot broadcast news) and the rest music and current affairs programmes. ''AIR should not, like DD, abdicate markets where there is sizeable audience,'' says Meenakshi Madhwani, CEO, Carat India. Even the broadcaster's rivals agree that dislodging it won't be easy. ''We factor AIR into our business plans because it is an operating channel and commands revenues,'' explains Nishchint Chawla, CEO, Radio Mid-Day.

Managing the content on FM2 might prove tricky, though. Baijal talks of fulfilling the need for local news in fm. Its critics, however, see implementation of that plan to be a problem. On the entertainment front, FM2 is getting on by playing old Hindi songs. Fine, its audience is middle-aged, but FM2 would still need a rich library to keep them tuned. ''News is not a big unique selling proposition for fm radio,'' says G. Krishnan, Executive Director, Radio Today Broadcast Limited, which holds fm licences for three cities Delhi, Mumbai, and Kolkata. AIR, on its part, admits that it is testing the waters as far as FM2 is concerned, even as it goes ahead with its plans of taking the channel to seven more cities.

Not getting FM2's positioning right could cost AIR dearly, especially since its competitors are savvy marketers. For instance, Star TV's Radio City, launched in Bangalore in July 2001, with a specific focus on in-house, young, and working audience, has grown its listenership by 50 per cent. ''We hope to raise the bar of radio programming, sales and marketing, and become the benchmark for other radio stations to follow,'' says Sumantra Dutta, CEO, Star's Radio Division. In August, AIR launched its FM1 in Bangalore in a bid to grab share-of-ear away from Radio City. But it is not clear who it is trying to address.

In the coming months, FM1 is to be revamped, starting with downsizing the number of programme anchors (80 of them), and including more liberal advertising and sponsorship rules. Since August this year, AIR has been allowing producers who buy a 30-minute sponsored slot on FM1 hawk 180-seconds of commercial time to advertisers at flexible rates. More such time-window opportunities are being opened at 121 other non-metro fm stations. Why, Baijal is even putting a number of AIR channels on the WorldSpace satellite platform and getting the broadcaster to be convergence ready, and focus on going digital. ''We are working with AIR to offer them a unique national channel, which they can leverage to promote a national flavour,'' says M. Sebastian, Director (Business Development) WorldSpace India. ''Their programming strength in terms of archives is humongous,'' he adds.

Scratchy Record

With 10 per cent of its budget going into content, AIR may be hard-pressed to upset competition, which seems clear of what it wants to do. ''Unlike in TV, 'day-part' programming won't happen because radio is a personal medium,'' argues Chawla of Radio Mid-Day referring to the fact that most channels tweak their afternoon-time programming for the essentially female audience at that time. ''You have to start with a sharply defined target audience and, then, your content has to reflect the target's mood across the day.''

AIR is also coming out with a new, listenership-driven, market-friendly ad rate card. The existing tariff structure is out-of-sync with market realities, with ad rates for all cities, and for FM1 & 2 being the same-Rs 800 for a 10 second spot. Radio City, in contrast, charges Rs 1,600 for a 10-second spot in a smaller market like Bangalore. The point: revamping the card is one thing, following up with a sales blitz is another. ''AIR never chases media planners,'' says Satyajit Sen, Associate Vice President, Grey Worldwide, who only advertises on AIR's primary channel in media-dark states such as Bihar. Baijal is hoping that roping in Doordarshan's sales team will change things. But unless both broadcasters are able to bundle advertising packages, nothing significant may be achieved by this move.

''There is no synergy in air-time sales between television and radio,'' notes an exec at a Delhi-based rival to AIR. So, Baijal's plans of setting up common marketing offices through re-deployment for both DD and AIR, major ad-originating markets like Bangalore, Hyderabad, Kolkata, and Delhi, may end up adding little to the broadcaster's sagging sales. And AIR's new song could turn out to be its swansong.

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