Pvt FM radio to generate Rs 1,400 cr revenue in FY13: study

India's private FM radio segment is expected to generate revenue of around Rs 1,400 crore in 2012–13, with 245 private FM stations operating in 86 cities, a latest study by CII and Ernst & Young said today.

According to the study, "Poised for Growth: FM radio in India", the sector has been growing at a Compounded Annual Growth Rate (CAGR) of 14% annually. "Furthermore, the sector is expected to grow to Rs 2,300 crore, at a CAGR of 18%, within three years of Phase III being rolled out," it said.

The sector accounts for around 4% of the country's total advertisement industry. Globally, radio's average share of the total industry is between 5% and 10%, the study said.

According to IRS 2012 second quarter data, radio has an estimated audience of 15.8 crore people (out of which FM radio accounts for 10.6 crore), as compared to 56.3 crore in the TV segment and 35.2 crore in the print sector.

"The report is a compilation of the views of 23 industry stakeholders including radio companies, regulators, music labels, etc. It highlights the need for a speedy implementation of Phase III, which can grow the radio industry from Rs 1,400 crore to Rs 2,300 crore in three years," Ernst & Young Partner Ashish Pherwani said.

According to the study, the key challenges faced by the radio industry today include limited inventory and slow recovery of advertisement effective rates (ERs).

"Therefore, the need of the hour for radio industry is to collaborate and implement a measurement system that supports the growth of the industry," it said.

According to the study, phase III of FM radio licensing promises further growth opportunities for the Indian FM radio industry, since it covers 294 cities and 839 licenses.