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Digital radio technology can double broadcasters’ revenue to Rs 123 billion in next five years: ICEA-EY report

According to the report, digital radio technology would lead to more advertising inventory to sell with the ability to charge higher rates based on segmented audiences

The adoption of digital radio technology with simulcast can help double the revenues of the broadcast sector to Rs 123 billion in the next three-five years, according to a report by the India Cellular and Electronics Association (ICEA) and EY.

The ICEA and EY report also highlights that digital radio broadcasting can be beneficial for all stakeholders, be it broadcasters, listeners, advertisers, or regulators. The report also points out that with the digital radio broadcast, the authorities will also be able to use the digital radio infrastructure for emergency warnings and traffic information.

Speaking at the launch of the report, Apurva Chandra, Secretary, Ministry of Information and Broadcasting, said, “While the world is moving towards digital, India has not yet picked pace on digital radio broadcast. In fact, radio in India has continued largely in the analogue mode despite the presence of 33 stations which have started transmitting in the digital mode on a trial basis. This is due to the lack of receivers and the incompatibility of FM in the high-end smartphones in India.”

“FM is largely used in Indian automobiles, but there also it is subjected to a lot of competition from free-to-air music apps. Due to the pandemic, the revenue of the FM sector has declined by almost 50% but now, the radio sector is reviving and coming back to the pre-pandemic level in the new normal,” added Chandra.

Highlighting the importance of digital radio in India, Chandra also went ahead and said, “The digital radio will lead to multiplication of channels using the same bandwidth and will provide newer avenues to the listeners and to the broadcasters as well. The broadcasters will be able to segregate what they are offering, be it sports, health, local events, music, etc. and the quality will also improve substantially within the same bandwidth.”

As per the report, the complete transition from analogue to digital radio infrastructure would take three to five years as radio broadcasters are dependent on the linear FM reach for their revenues. Thus, analogue and digital broadcasting will need to co-exist in a simulcast till an adequate reach is achieved. Consequently, for some years there would be no spectrum saving, the report stated.

The report further recommended that the innovation around cost-effective chipsets, antennas, and software to drive quicker adoption of digital radio requires capital investment and a robust mobile phone ecosystem.

As per Sanjiv Sankar, Joint Secretary, I&B Ministry, “The digital radio adds a new dimension to radio technology. Since radio is still a very powerful tool and medium for media, industry, and the government. The government intends to not only promote radio but has plans to promote digital radio especially.”

“From the government’s perspective, we are not focusing only on revenues, but on the reach, employment potential and the improvement in the quality of content on digital radio. It can increase the number of stations by at least four-times,” added Shankar.

The report highlights some of the major issues which need to be addressed in order to have digital radio broadcast in India- competing products using low bandwidth data and consensus on music royalties.

According to Pankaj Mohindroo, Chairman, ICEA, “India is a heterogeneous market and provides audience segments with differing tastes as well as payment capabilities. Digital broadcast radio can cater to segments of entry-level smartphones and several hundred million feature phone users to receive enhanced services in areas of health, education, emergency, and weather which by complementing data networks decongest them. Communication usage with IOT devices are next steps envisaged in the pipeline too.”

Citing the report, Mohindroo also went ahead to state that digital technologies would go a long way in widening the network of broadcast infrastructure in the country and that the number of radio stations would grow multi-fold, from less than the existing 300 to over 1,100 in numbers without any additional spectrum.

As per the report, digital radio broadcast can also lead to an increased ad inventory with the ability to charge higher rates based on segmented audiences to the broadcasters, given that the digital radio system provides listenership data. It can also help in cost optimisation on the broadcasters’ end as the digital transmitters use significantly less power as compared to analogue radio transmitters.

Commenting on the report, Ashish Pherwani, Partner, EY India, said, “Digital radio can provide a much-needed boost to the Indian radio segment. As a free-to-air medium, radio plays a very vital role in India, informing and educating its people. Systemic issues around measurement, reach, operating models, competing products, and Covid-19 impacted the segment with failing revenues and shrinking opportunities. Digital radio can help grow the radio segment in India by three times over the next five years, if implemented, keeping in mind the requirements of various stakeholders and with the correct policy support.”

From the perspective of the listeners, the report showed that the options of channels would grow significantly within the same frequency and the consumers would not have to pay any data charges for digital broadcast.

At the moment, India has tested two technologies – HD Radio and Digital Radio Mondiale (DRM) for digital broadcasting in FM band, as per the report.

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