MUMBAI: Radio companies are evolving a new product noted the FICCI EY report. Radio needs a new product – and a new story as well – for marketers to invest their media spend in it. Radio management teams we met indicated several areas of focus, including:
Hyperlocal connect: Stations are increasingly using regional languages and focusing on cityspecific storytelling to maintain community interest
Community leadership: Taking up causes pertaining to communities and focusing on purpose and measurable outcomes
Exclusive content: Providing access to some community leaders, influencers, and content not available anywhere else
Bundling with other media: Integrating radio inventory with print and/ or Out-of-home inventory can add significant value for marketers
Digital co-existence: Determining a simple online radio model, with non-skippable content and stationality across large OTT streaming, e-commerce and other apps, and the fast-growing CTV and IPTV markets, with music licenses at radio or radio++ rates
Brand extensions: Radio companies have built powerful brands that can be leveraged across new media and community-building initiative
The radio segment revenues will be stagnant. The report expects segment revenues to diversify further as systemic issues remain unresolved. Total revenues may decline to Rs. 22 billion by 2028 on the back of the following factors:
– FM receivers have not been mandated to be installed in mobile phones and in cars as yet.
– Continued growth of audio streaming services and YouTube
– Diversion of traditional media spend to performance marketing.
– Increased mix of lower-yield inventory away from declining metro markets toward regional hubs
Included above are increasing amounts of non FCT revenues being earned by radio companies to diversify revenues, which the report expects will grow at a CAGR of 14% until 2028
Non-FCT revenues will continue to drive growth: The importance of non-FCT revenues will continue to grow. We expect them to contribute around 39% of total revenues by 2028, as radio brands become 360-degree media and experience providers.
Radio’s operating model needs to optimise dramatically: The current cost model, developed in the 2000s, is no longer viable for radio companies given the changing revenue composition and falling ad revenue There is a need to re-look at operating costs and work towards significant efficiencies.
Examples include:
– Centralisation of planning, scheduling, ad sales, marketing, content and RJ operations
– Organisational restructuring into audience focussed mini enterprises
– AI-powered stationality generation at scale, including AI RJs to replace expensive talent or during periods of lower listenership
– Increased repurposing of marquee shows
– Automation or outsourcing of support functions
– Rationalisation of office space and administrative expense
Radio’s core competency can pay dividends: Radio’s core competency is its arsenal of feet-onstreet ad sales teams. Such teams are needed by print, TV and even digital natives trying to reach retail and SME advertisers— a role radio can play efficiently by training its teams to sell multi-media solutions.
Digital radio can play an important role if…: As the government pushes for digitization across India, there is a need for radio digitisation. This has several benefits such as the availability of more frequencies that can create increased variety, no data consumption for consumers, improved ad targeting, better customer analytics, and freeing up valuable spectrum for other uses.
However, for digital radio to be successful, it must be part of broader infrastructure creation (such as DTT) so that capital investment is not large. Radio companies must be permitted to continue analogue operations until digital radio gains relevant scale, the license fee should ideally be revenue share-based, and the government would need to mandate digital radio receivers in cars and phones.
Regulatory breakthroughs will impact the segment:
Significant policy changes recommended in late 2025 can reshape the landscape:
Radio news broadcasting: For the first time, India is set to allow private FM radio stations to broadcast independent news and current affairs programming—capped at up to 10 minutes per clock hour—subject to adherence to the government’s program code.
If implemented, this change could help FM radio broaden its appeal beyond music-led audiences and potentially drive higher listenership and advertiser interest
Licensing reform: TRAI’s move from a licensing-led regime to a structured authorization framework under the Telecommunications Act, 2023, is designed to streamline compliance, reduce procedural friction and improving ease of entry for broadcasters.
A critical change finalized by the TRAI and the MIB is the de-linking of the license fee from the Non-Refundable One-Time Entry Fee (NOTEF). For new authorisations and the proposed Digital Radio policy, the fee is a flat 4% of Adjusted Gross Revenue (AGR). This ensures broadcasters pay only based on what they earn, rather than being locked into high fee tied to historical auction prices.
