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By Rosemary Arackaparambil

BOMBAY, July 9 (Reuters)

"I'm turned on, are you?"

The sticker in the back of a car stuck in a Bombay traffic jam advertises a commercial radio station. The driver shakes his head in time to the music coming from his radio.

Radio is not a novelty in India -- the sobering state-run All India Radio has been around for nearly seven decades. But lively, attention-grabbing radio is new.

India auctioned off FM radio licenses for 37 stations in 19 cities two years ago and the commercial stations are grabbing audiences and making broadcasters lick their lips in anticipation of growing advertising revenues.

In the last few months, four private FM stations began broadcasting in Bombay, India's financial capital, providing a medium for people to request songs, pass endearing messages to sweethearts and express opinions about society and life.

Private FM radio is also on the air waves in Bangalore, Lucknow and Ahmedabad, and more cities are waiting to go live.

"I've stopped listening to my CDs and cassettes over the past few months...It's an automatic reflex to switch on the radio these days," said Rajini Nair, who tunes in for about three hours daily at home or while driving to and from work in Bangalore.

Sales of FM radios in urban areas rose 11 percent in January-April, market researcher ORG-GFK said. Sales growth is believed to be higher because the data don't account for hot-selling pocket radios costing less than 100 rupees ($2). Until recently, the only radio choice was the 209 stations operated by All India Radio. By contrast there are an estimated 14,000 radio stations in the United States and 1,000 in Italy.

India is not expected to match the U.S. anytime soon, but with privatisation the amount of time spent listening to the radio could rise from a countrywide average of about 30 minutes a day to nearer the world average of three hours a day.

THEY'RE PLAYING OUR SONG

All India Radio reaches practically the whole nation, but its hold on urban listeners lasted only as long as they had no other option to its generally staid programming.

Until cable television arrived about 10 years ago, city dwellers tuned in to All India Radio's commercial station Vividh Bharti, mainly to listen to its impressive collection of Hindi film music.

Once satellite TV beamed from overseas were available, Indians turned off the radio and tuned into the likes of cable music channel MTV. Indians have access to more than 100 TV channels because that industry, unlike radio, is unregulated.

Now private FM radio channels compete for attention, mainly by broadcasting Hindi film music and Western and Indian pop music. Enthusiastic young disc jockeys host the shows peppered with small talk, traffic and weather updates. However, political news and current affairs are not allowed on private FM stations.

ADVERTISING VEHICLE

Radio in India attracts 2-2.5 percent of total advertising spending, much less than 14-15 percent in neighbouring Sri Lanka and 12-13 percent in the United States.

Radio industry revenue could grow to 4.9 billion rupees in five years from 1.9 billion now, the Federation of Indian Chambers of Commerce and Industry estimates.

Advertisers are attracted by captive audiences like the rising number of Indians who drive to and from work in cities, said Andrey Purushottam, head of ad agency Starcom Worldwide.

Auto sales have surged 54 percent in the past five years, largely due to an increasing number of well-paid young professionals.

But broadcasters are worried hefty license fees could stifle growth and expansion. After an initial fee for a licence, FM stations must pay the government 15 percent more each year for 10 years on a compounded basis.

"I don't see radio stations paying that kind of fee will be able to make much money over 10 years," John Catlett, chief executive of Radio City, said.

"It is our intention to continue, but our interest in the medium and the industry will slacken if there is no change in the license fee structure over the next year or so."

Catlett is in favour of making the fees proportional to the population of the city served, like in the United Kingdom.

"People like us who can run the last mile can wait for 3-4 years to break even," said Parigi of Radio Mirchi, which is backed by the Bennett, Coleman & Co media group.

"But unless you have deep pockets, it will be tough." 

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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