Radio City plans to bid for 20-25 more radio stations in second phase

By , agencyfaqs! | In Media Publishing | May 18, 2005
The bidding is expected to start in a few months after the government announces the second phase of licensing

Radio City will bid for the licence of 20-25 stations in the second phase of privatisation.

In an exclusive interview with agencyfaqs!, Amber Basu, vice-president, finance and marketing, Music Broadcast Pvt Ltd., which runs Radio City, says, "We are waiting for the second phase of privatisation, which will open up around 300 more markets for radio channels."

The second phase of licensing will probably happen by end-September 2005, Basu says. For Radio City, the metros will be the priority. As Basu says, "We plan to expand to other cities such as Kolkata, Chennai, Ahmedabad and Hyderabad." At present, Radio City has stations in four cities - Mumbai, Delhi, Bangalore and Lucknow.

In the second phase of privatisation, the industry is looking forward to a revenue sharing model and not a fixed license fees. He says, "Depending on the government's decision on license fees, we will have to look at the viability of the business model. One also needs to look at the investment required for the infrastructure. After considering all these aspects, we will decide on the markets and the number of cities."

For a small town, the radio station may need a 5 KW transmitter. For the bigger cities, a 20 kw transmitter may be needed. For instance, the Mumbai station of Radio City has a 22 KW transmitter, while in Bangalore it has a 10 KW transmitter. As per the present market price, a 10 KW transmitter costs around $10,000-$12,000 (Rs 4.4 lakh - Rs 5.5 lakh), excluding the import duties.

Basu also says that despite the slower growth rate in the industry, Radio City has grown at rate of 20-25 per cent in fiscal 2003-04. In fiscal 2004-05, the radio channel grew by 15 per cent. But by the end of this fiscal, the radio channel is looking forward to a revenue growth of 20 per cent.

"The rate of growth is obviously higher in the first few years as the market is expanding. But after a couple of years, the market gets saturated and so the growth rate gets slower," Basu says.

He adds, "For the entire industry to grow, the number of stations and markets also need to increase very soon. This is when radio will play an important role as print and television does in every advertiser's media plan."

Recently, STAR India has shelved the programming deal with Radio City. STAR's role is now restricted to advertising sales only. At present, Sandeep Sharma is looking after the corporate sales, while Jayant Bhokare is responsible for retail sales. As Basu says, "Radio City will soon decide on the new COO. The position has been vacant after Sumantra Dutta moved back to STAR."

In its new avatar, Radio City has planned several on-ground activities for marketing and promotions. After completing three years in Mumbai, the radio channel is organising diverse activities at multiplexes across the city. For instance, Radio City jockeys will interact with the crowd, make them play games, record testimonials for the next day's programming, throw several questions around Radio City programmes, and finally give away freebies.

Basu Says, "We are specifically targeting at young adults around 18-35 years from the upper socio-economic groups."

For its Delhi-based listeners, Radio City has launched a contest - 'City Bajao Bike Le Jao' - through which, it will give away one bike every day as a prize for the next 15 days. 2005 agencyfaqs!

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