Digital radio has been seen coming to the fore for reasons ranging from filling the need gap for niche audiences to creating differentiation which is not possible on terrestrial stations in the absence of Phase III. With increasing number of hours spent on the internet and the arrival of smartphones, Indian audiences are seen warming up to radio's online avatar.
With the success of online streaming portals such as Pandora and Streema, one can rely on the fact that online radio shall be one of 'THE' media tools in the near future. However, there might be a few hurdles that need to be crossed first.
The major problems faced by broadcasters that need to be addressed are broadband penetration and cost of broadband, music royalty issue, monetisation, increase smartphone penetration and the competition with music-only websites.
Internet penetration in India is current estimated at 100 million users and broadband penetration at 15 million users. Also, the cost of broadband connection (which is considerably high) becomes a major issue for broadcasters who bank on them to reach out to their listeners through the online portals.
Music royalty on streamed music is another major issue that holds back players from investing in this medium. In the absence of a uniform mechanism, music labels and internet radio operators are still at loggerheads for the amount of royalty to be paid. The operators believe that royalty for liner internet radio should be determined on the basis of the regulations for FM radio as both – the terrestrial and internal portals have the same features, only the platform of distribution is different. On the other hand, respondents hold that statutory should be extended to internet radio and that the Copyright Board should decide the royalty fee for internet radio stations.
Promise of growth
In spite of all the problems, investing in digital radio is a good bet, for marketers have the opportunity to grow with the growing medium. According to a research conducted by Radio Advertising Bureau (in international markets), internet radio use increases ad recall and ad response.
While the situation may not be exactly same in the Indian markets, it is surely reaching there with the increasing consumption of internet through smartphones. A research by Google and IPSOS indicates that Indian smartphone users access internet multiple times a day with 40 per cent users surfing the internet at least once a day. Also, while most of the advertisers focus on social media, banners and video content, online radio can prove to be a unique way to reach out to the target audience.
In spite of all the barriers and competition, the surprise element while listening to online streamed music can be witnessed only on digital radio. Thus, investing in online radio can be very beneficial for marketers to reach out segmented listeners with engagement and measurement.
Compiled by Saloni Surti on the basis of CII-E&Y's report on the Indian radio industry named 'Poised for growth: FM radio in India'