The radio industry is a very small part of the broadcasting universe. At Rs 2,300 Crore, we comprise about 5% of the broadcasting sector in India. Its modest market share is probably the reason why the path to digitization of radio is so poorly defined. Radio should be as much a part of our master plan for the ‘Digital India Vision 2020’.
Previous month, the Telecom Regulatory Authority of India (TRAI) floated a consultation paper on issues related to digital radio broadcasting in India, inviting comments from stakeholders that can be submitted by 4 September. Currently, terrestrial radio broadcast is available in the Frequency Modulation (FM) and Amplitude Modulation (AM) mode with All India Radio (AIR) running 420 stations (AM and FM) that cover almost 92% of the country by area and 99.20% of the country by population. Meanwhile, private sector radio broadcasters transmit programmes in FM mode only.
The consultation paper seeks comments from the industry on various aspects of digital radio broadcasts. All India Radio, the state-owned broadcaster that operates 420 AM and FM stations, is currently the only radio broadcaster in the country making moves toward digital radio. There are approximately 293 radio stations in the country that are owned by private radio broadcasters in the FM frequency band. TRAI highlights that digital radio is more efficient and offers fewer operational restrictions than analog, including the ability to air three to four programs on a single frequency, compared to one on analog. TRAI asks for suggestions and comments on things like whether there is a need to encourage or facilitate the introduction of digital radio? Is there a need to create a roadmap for migration to digital radio? Should a transition date be declared? And should single digital radio technology be adopted for the entire country or should broadcasters have a choice?
In contrast, it lists the advantages that digital radio technologies have over analogue, including better signal quality and clear reception, efficient use of allocated frequency as multiple radio channels can be broadcast on a single frequency and efficient reception of radio channels in static, portable and mobile environments (such as moving vehicles, mobile phones etc.). Digitization of radio will also allow the government to retrieve spectrum and re-allocate it for more efficient use. While AIR is active in implementation of digital radio in MW (medium wave) and SW (short wave) bands, there appears to be no initiative in the FM radio space either by public or private FM radio broadcasters, Trai said in the consultation paper.
On the face of it, a proposed switch to digital radio seems like a progressive move. Or at least Trai sees it that way. In fact there are some advantages to the government as well, should it choose to exploit them. A lot more channels can be accommodated in a given spectrum band than is possible with FM. As a result, more programming variety can be offered. The government can also potentially earn a lot more in the form of auction fees. There are also transmission quality advantages. If the topography of a city is made up of mountains or high-rises, then digital transmission is better than FM. There are other advantages too. Digital audio broadcast (DAB) makes a range of value-added services possible. Some additional information (song name, singer name) can be transmitted in textual form along with the radio signal. According to TRAI, the DAB receiver displays can provide not only information about the music being played but weather reports, traffic advisory, stock market prices and much else.
Radio industry not interested
But broadcast experts and radio industry executives are less than enthused about TRAI’s consultation paper. They do not see any real benefit in the move. The biggest disadvantage is that listeners need to buy special radio receivers. “I can’t imagine anyone buying special radio sets in today’s day and age. These receivers are fairly expensive, costing between Rs2,000 and Rs10,000. Most radio is consumed on phones or in cars or via music systems. Unfortunately, none of these devices supports digital transmission. This is the single biggest disadvantage of digital radio,” says Prashant Panday, chief executive officer at Radio Mirchi, the FM radio brand of the Times Group.
Besides, radio firms cannot give up on FM transmission after investing so much in it. Radio firms have not only paid huge license fees to the government (in advance for 15 years), they have invested in setting up the facilities. Digital radio is still in a very nascent stage, even in Europe. For FM broadcasters, digital transmission represents additional costs with no matching revenue. “For revenues to come, there needs to be a well-developed ecosystem of radio receivers. That’s going to be very difficult in India,” says Panday.
Sunil Kumar, managing partner, Blue Broadcast Systems, a media infrastructure firm, also fails to understand why TRAI is keen on a move to digital radio. “They are talking about a technology which the world is not too sure of. The reason they have given in the consultation paper is to increase radio’s audience size by offering wider choice of content. And to counter the competition analogue FM radio is facing from emerging technologies such as webcasting, podcasting, music streaming sites/apps. It may be a noble thought but wouldn’t work in the absence of radio receivers,” he argues.
Jehil Thakkar, partner, consulting at Deloitte, also feels that the real challenge will be to have consumers make the switch to digital radios and receivers—“and this is a slow and gradual process unless the government mandates a switch over”. Frankly, even globally, not too many countries have adopted DAB. Norway is probably one example where radio has gone digital.
Besides, Kumar says that a new radio receiver is required each time there’s an upgrade in the DAB version. And India is too large a country to be covered by DAB. “Size is the reason why large countries such as the US or Canada or China or Russia have not taken to it,” he says.
As a media market, we have the best of both worlds: multiplicity of genres as well as diversity of languages. Radio is a powerful medium that gains from these advantages. It is not only interactive, but is also very local in nature and is free of costs, unlike cable and satellite television. There are many technologies we need to experiment with to realise the vision of digital radio in India, while remaining true to radio’s fundamental character as an interactive, free-of-cost, local medium.
All said and done, radio is growing at a steady speed. While digital is growing exponentially, private FM radio in India is growing at a formidable 14.5%, and that is primarily because of FM expansion in tier 2 and 3 cities although the ad pie continues to be only 4%. This is not very encouraging; as internationally, in countries like the US, the radio ad pie is about 14%. However, we hope to see it grow to 7% in India by 2020. The unfortunate thing is that the world has gone digital while we are still talking analog FM technology with a horizon spanning over 15 years. What we mean are, in this digital age, one of the biggest drivers for broadcast media is technological advancement, which could drive both content and revenue.
For instance, the public service broadcaster, All India Radio, has introduced digital radio mondiale (DRM) transmitters. These are now capable of transmitting signals in analog, digital or even simulcast mode (that is, a mix of both analog and digital). This progressive technology has replaced 37 obsolete medium wave and short wave transmitters of AIR. However, private FM broadcasters are still operating on an analog FM technology and paying a huge license fee for it.
Though the trend of AIR shifting to DRM is encouraging, the challenges faced by terrestrial radio from streaming platforms (web and mobile) cannot be ignored. The digital audio entertainment sector is fast changing. The likes of Saavn and Gaana are establishing themselves, and have become a major competitor to the radio industry today. While they are seamlessly interactive, they also offer on-demand services, etc.
So, the challenge is not about one private FM player competing with another player; the challenge is the battle of FM players against the ever-changing technology around them. Listeners here have far more options to listen to their kind of music rather than FM radio through web radios, podcasts, audio-on-demand, etc.
iHeartRadio is another such global example that provides an all-in-one listening experience, bringing a variety of content to its listeners, be it music, news, talk radio, sports or comedy. Along with aggregating most US radio stations, iHeartRadio then distributes this content over the internet through web or mobile, whichever medium is desired by the digitized listener. Now this is something we need to experiment with in India and adapt to our conditions.
In India, another challenge is that high-end smartphones have done away with FM tuners altogether. Decision makers in the mobile industry view internet radio as the way forward. Their logic is simple: data brings in money while FM radio is free. This is an area of concern. The importance of terrestrial radio has to be properly understood beyond its rupee value. Besides regular programming and the entertainment that it provides, it has always played the age-old role in disaster management. I should point out here that India is one of the very few countries in the world wherein news is not allowed on private radio stations.
This has had a very damaging effect both on the growth of radio as well as its impact. Local news is the lifeline of radio broadcasting. In an ideal scenario, all strata of society should consume digital radio as a mass medium. However, in the current situation, the cost of digital receivers (upward of `13,000 per receiver) becomes an entry barrier for most listeners. In this context, the DAB transition in Norway is worth citing. Norway has switched from FM to DAB radio, through the ‘pop-your-phone’ route; with a simple dongle, every smartphone becomes a digital radio! I think we should consider learning from its experiment.