The amount of media being consumed by the average urban Indian is growing rapidly. As of 2015, according to a research by Zenith Optimedia, the amount of time per day that we are exposed to media is at 490 minutes, i.e. over eight hours! And that number is expected to grow over the next few years as more people get online. This has led to a vibrant & creative business environment for most of the media industry. The audio business in India is the one area where we fall short. Let's examine the structural reasons for that.

Types of Content

We can broadly divide the audio business into music and long form talk. Music is being created in various forms whether it's popular (mostly film), experimental (the indie music scene) or classical music. Each of these areas has its challenges, but as a whole, the music industry is doing well. What is missing in India is Long Form Talk, i.e. Talk Radio or Podcasting. In the parts of the world where the radio market is lightly regulated, we will generally see a 70-30 split between audiences who listen to music and audience who listen to talk.

Why don’t we have News or Political Talk Radio in India?

The terms of Spectrum licensing from the government are very restrictive in terms of the kinds of content you can put out. News and Current Affairs are not permitted; but politics is just one possible subject for Talk Radio. But compelling content can be created across a variety of genres – Sports, Culture, Mental Health, News, Science, or Education.

Long form talk is an important form of mass media, as it can inform the cultural conversation in ways other media forms cannot. Whatever one thinks of Donald Trump, what can’t be denied is that a big reason why he won the U.S. Presidential election is because of the conservative talk radio movement. Conservative Talk Radio had been around forever, but was mostly local. It really took off in the early 1990's with the advent of figures like Rush Limbaugh who were able to give voice to a segment of the population who felt (justifiably or not) their views were side-lined.

Means of Distribution

As consumption patterns shift, the music industry is turning towards digital downloads and streaming apps, as the costs of distributing physical media and piracy take its toll on their profit margins. At this time, though currently in flux, a point of equilibrium between the artists, labels and distribution channels is coming into focus with power shifting slightly from distributor to the label to the artist. However, the outlook for radio is much less sanguine, mostly because of the convoluted and frankly elitist rules put in place to protect media incumbents, both private and governmental.

The licensing for an FM station in India is a complicated process and expensive. This has led to a situation which is frankly baffling. A city the size of Mumbai has 11 FM radio stations. By comparison (according to the website asiawaves.net), Bangkok has over 70 and New York has 45+ radio stations with many of the suburbs having their own stations.

The process locks out anyone from participating in the space unless you have deep pockets. The prices in auction for Delhi, Mumbai and Bangalore in the Phase-III auctions last year averaged over Rs.130 crore per license. The result of which is that most FM stations in large cities are controlled by large media houses.

With the supply constrained by these factors, radio stations that do exist have no incentive to differentiate their content in any way but in the broadest brush strokes – Hindi vs. English vs. regional or modern film music vs. nostalgic film music. This has led to stagnation in the kind of content being broadcast over radio. The people who make radio in India are some of the smartest and most creative people we have, but they are stifled in this environment. Also adding to this, streaming apps like Saavn, Hungama, Gaana, and Apple Music are eating into the audience that radio does have, especially the high value audience.

The Way Forward

I think we will see two major factors play out in the audio industry over the next few years. The first is the rise of podcasts. Podcasts can be incredibly niche or incredibly broad. They can be talk or music. Given that they exist on the internet, they don’t have the same constraints in terms of types of content. As data caps grow and people get more comfortable with consuming digital content on the go, this will take over a significant portion of audio listening.

I also believe that Indian radio stations will start experimenting with syndicated content. It will be a way for them to experiment with high quality content at a relatively low cost. It will be a way for relatively small stations with very low content budgets to increase the quality of their offerings.

Rush Limbaugh became one of the first national talk radio stars in the U.S. by having his show syndicated all over the U.S. Who is going to be the Indian Rush Limbaugh?

The music industry is turning towards digital downloads and streaming apps, as the costs of distributing physical media and piracy take its toll on their profit margins