All India Radio – Marketing for Revival

AIR: Action Is Required

Late to office, Mr. B.I.Saini (Director General, All India Radio) rushed to the office. He could not catch his usual ‘Breakfast News’ on TV that morning. As he entered the office, he felt a strange silence prevailing.

Entering the cabin he saw a Newspaper (The Strategist) kept half spread on his desk. Taking a closer look, he saw the Newspaper headlines, ‘AIR: May its Soul Rest in Peace...!’

Instantly, he could thus relate to the silence prevailing in the office. Even before settling down in his chair, he read through the article and midway the article he decided some immediate measures had to taken. All appointments were cancelled and an urgent meeting was called with the senior executives of the organization.

Good Morning, Gentlemen. Before I go any further with what I have to say, I would like to ask you all a question. How many of you have NOT read the morning newspaper? No hands sprung up.

OK, so we all know why, and what are we here for, right? Let me begin by taking you to the time when AIR would speak and sign, preach and portray, convey and conduct, and everyone would listen…

RADIO: His story (History)

Genesis of AIR

Although Radio was invented in late 1890s, Public Radio Services, offering information and entertainment to the public started only in mid-1910, in the US and some European countries. Advertising on radio, initiated in US in 1920, marked the beginning of the Commercial Radio Services. By early 1930s, Radio had acquired an ‘Industry’ status in many countries.

However, in 1940s, advent of TV severely eroded the listener-base of radio industry. During the next two decades TV extended its reach to all corners of the Globe. In spite of all this, Radio still remained the Mass-Communication Media up to 1950s, especially with the invention of Transistor.

India, Radio Broadcasting started in 1927 with two Privately-Owned Transmission Stations, one at Mumbai and the other at Kolkata. Soon the Government took over the two stations and started operating them as the Indian Broadcasting Service. This marked the beginning of what we are.

In 1936, we were renamed as All India Radio (AIR), and were made an independent Department of Government.

When India attained Independence in 1947, AIR had a network of six stations and a complement of 18 Transmitters. The coverage was 2.5per cent of the geographical area and just 11per cent of the population.

Popular and Growing

From 1957, our services were referred to as Akashvani (a Sanskrit word, meaning ‘voices from the skies’). AIR’s main entertainment channel, Vivihd Bharti, came into existence in the 1960s. It was aired for more than 14 hours daily now from 36 stations. Almost sixty percent of the time of the broadcast was devoted to Indian film music and the rest was embarked for devotional music, light music, short plays, talklets, interviews, etc. Three short-wave transmitters, each at Mumbai, Chennai and Guwahati, composed
the Vividh Bharti Services.

The Year 1967 marked the beginning of Commercial Broadcasting on AIR from Mumbai, Nagpur and Pune. But in India, advertising on Radio actively started only in early-1980s (almost 60 years after that in US in the year 1920) on its primary channel Vividh Bharti.

Various initiatives by the government led to the popularity of AIR as a mass medium and we started earning huge revenues from program sponsorship fees and commercial advertisements. The total revenue earned, during 1990s, by Vividh Bharti and the Primary Channels, was around Rs 80.97 crores. By starting operating an External Service Division (ESD), we introduced broadcasting of programs on current affairs, news bulletins, talk shows; and cultural, historical and political subjects, in as many as 24 languages (8 national and 16 foreign languages). We aired programs in 146 dialects on our Home Service.

Soon AIR attained got the role of a cultural ambassador of India, projecting and promoting the Indian image at a global level. This marked the ‘Golden Era’ for us., By 2000 AIR had established a network of 283 broadcasting centers, including over 180 full-fledged stations, four Relay centers, three Vividh Bharti commercial centers and one Auxiliary center. It held 146 medium frequency (MW), 50 high frequency (SW) and 87 FM transmitters.

The coverage of AIR by now had increased to 89.51per cent of the area, serving 98.81per cent of the people in the country.

Increased Listenership, Transistor Revolution and Credibility of AIR

The advent of Transistor in India had a major impact in increasing the listener base of radio because of its size and improved quality of broadcasting. Enjoying the patronage of millions of people across the country, by 1980, Air India Radio had become the heart of every household in India. Radio was heard in the cars, homes and all possible places in every nook and corner of India.

In this context Sumeet Vij, Marketing Head, Radio station ‘SONU 94.5’ said that consumer could listen to a Radio almost anytime (Refer Box1); doing some task or even when not doing anything. Radio was referred to as a constant companion of a person.

Box 1

“A consumer will tune in to a Radio only when he thinks he is doing a light task that will become more enjoyable if the Radio is on. For example, while driving, talking or cooking .But he will never switch on the Radio as a ‘break’ from work. Largely, people listen to the Radio when they need a companion – either for themselves or for a task at hand.”
SUMEET VIJ, Marketing Head, Radio station ‘SONU 94.5’

Program Variety

AIR’s programs now included Dramas, Suspense, Thrillers, Situational Comedies, Health and Beauty Tips, Cooking, etc.

AIR took on the responsibility of nurturing the musical wealth and heritage of the nation, and the propagation of music in all forms. Through the broadcast of music programs from all its stations, AIR is credited with bringing about an awareness of Indian music - Classical, Folk, Light and even Tribal. In order to equip the listeners, especially the youth, with a better understanding and appreciation of the awesome musical heritage of the country, AIR regularly broadcasted music lessons and music appreciation programmes from its various stations.

About 39.2 per cent of the total broadcast time on AIR was for music, 27 per cent for news and the rest was divided almost equally amongst programs on health, education and entertainment (except music).

Another event which expanded our listener base further was Cricket. Cricket came as a boon to the organization. We started broadcasting live commentaries of matches played in India and abroad in 1970s. Commentators on radio were professionals and appealed the masses. Up to this day, radio is the source people look up to when it comes to cricket commentaries.

Penetration, Reach, Affordability

Owing to the immense popularity, extensive reach, easy accessibility and cost effectiveness, AIR became the primary source of information, entertainment and education during the 1980s, attracting listeners and advertisers. There were by now over 100 million radio-sets in India. The reach and penetration of AIR was (and is still) considered to be the best amongst various media (Refer Table 1). Radio also reached the remotest of the villages and was considered the best source of entertainment in the villages. AIR had also started generating huge revenues and was turning out to be a profitable business. Within two decades, its revenue had increased by almost fifteen folds.


Table 1


Radio Sets
(in mn.)

(Rs. in mn)

Radio Penetration
(in % of population)



























Talking about the affordability factor, Radio was economical when it came to both time and money. In India, where almost 40 per cent of the population is illiterate, Radio is more acceptable, especially in the rural areas, than the Newspaper. Radio could cut through the barriers of illiteracy. Another aspect which AIR was able to leverage on was Radio’s portability, which made it convenient to carry it anywhere. Radio being mobile, it could be with the people all the time and the message could be conveyed time and again.


Time to Watch Television!!

Advent of Television (TV) in the mid 1940s in some countries severely eroded the listener base of the Radio Industry. It began to lure away Radio listeners. Especially post Second World-War, TV industry grew at an incredible pace. Earlier on, TV shows were merely an adaptation of the existing Radio shows. But it did not take much time in building up a format and identity of its own in the field of entertainment and communication. And in the two decades that followed, TV was almost pervasive.

This marked the entry of another, and that too more effective and impressive, source of information entertainment and education.

People soon started realizing that they were less dependent on the blind medium (Refer Exhibit 1).

From mid-80s, the doors of the Indian markets went wide open for TV. The success of TV serials like Ramayana, Mahabharata, Hum Log and Buniyaad subsequently contributed further to Radio’s downfall.

Exhibit 1






Good local market coverage;
Flexibility; Timeliness;
High believability.

Short life;
Poor reproductive quality;
Small ‘pass-along’ audience.


Mass use; Low cost;
High geographic and
demographic selectivity;
High reach.

Blind medium; Non-standardized
rate structure; Lower attention
value than TV.


Combines sight, sound and
motion; High attention value;
Appealing to the senses.

High absolute cost; High clutter;
Less audience selectivity

Source Marketing Management, Philip Kotler (10th Edition).


TV entered the Indian markets in the mid-1980s, at the time which was tagged as the ‘Golden Era’ for Radio Industry as well as for us – AIR. TV’s launch into the Indian Bazaar had the following impact on us.

Reduced Listenership and Loyalty

AIR, now could not cope up with the changing consumer preference. With our mundane programs and almost no focus on the youth, we lacked an upstream image and were often not in sync with the changing lifestyles of the Indian audience. Lack of creative and lively programs made AIR loose its charm and thus proving unattractive to the big corporate houses to advertise on it. Bad sound quality, poor reception, week Radio Jockeys (RJs) and less interactive programs pushed the listeners further away from AIR and onto TV.

In addition to add to this, Radio, on the whole, started being considered as a boring, unimpressive and an unnecessary medium which was opted for only when TV was not present. Losing listenership lead to a big loss to AIR in terms of revenue when advertising agencies and advertisers decreased their ad spends on Radio.
In the so called ‘Golden Days’ of Radio, clients assigned as much as 15-20 per cent of their spend on Radio. But today it has come down to less than 1 per cent. Advertisers blamed lack of creativity in radio to this shift. They also felt that even with its extensive reach of over 98per cent, the penetration of Radio network has remained stagnant in the 1990s.

According to a recent study conducted by ORG-MARG Nielsen, India’s leading market research company, it is estimated that the future spend on the Radio advertising as a percent of the total Indian advertising is expected to increase to as much as 5 per cent in years to come (Refer Table 2).

Also the Radio ad spend is expected to grow by an estimated of 45% during 2002-2007 as compared to an estimated 15% growth of spend in India.

Table 2


Radio Advertising
(in Rs. bn)

Radio advertising as per cent of total Indian Advertising























Santosh Desai, Executive Vice-President, McCann Erickson, feels that the advertising on Radio was becoming a less and less attractive (Refer Box 2). He feels advertising on TV is the way to get the message through to the maximum number.

Box 2

“Radio may not be as crowded as TV…but how do you attract consumers to Radio? As an advertiser, I need to have a reason to choose Radio as a medium to advertise, because if all the consumers are glued to TV, how can I talk on Radio? But look at how I choose my TV channel; I know X% of my target group watches TV from 7:30 p.m. to 10:00 p.m. So an ad for ‘suiting’ even at 8:30 p.m. drives the message home. But at 7:15 a.m., can a Radio ad for suiting register in his mind? In this situation, what product is likely to register?”

Santosh Desai, Executive Vice-President, McCann Erickson

Another reason which analysts have figured out for AIR being in the present (poor) state was the Government’s failure in reforming the broadcasting policies. They also feel that government’s restrictive policies contributed to Radio’s downfall to some extent. Hence, AIR today is branded as the ‘Age old, Countrywide Radio Network.’

More competition for Radio
Radio as an industry, and AIR, both faced another setback with the advent of Satellite Broadcasting Technology sometime mid-1970s. The technology enabled TV networks to show their programs all over the world. By the 80s, the satellite TV industry had established itself firmly, reaching out to millions of subscribers all over the world, and generating huge revenues throughout in advertising that went on AIR.

Another threat to the Indian Radio Broadcasting seemed to be the advent of Satellite Radio. In light of this, the future of AIR seemed to be. The world’s first Satellite Radio service, WorldSpace, had started its operations by the mid-90s, and has been gaining acceptance rapidly. However, to be able to access Satellite Radio, listeners had to buy special ‘Satellite Radio’ sets, which were priced very high. And analysts felt that the Indian consumers would not willing to pay huge amounts when small Radio sets and Transistors are available at very cheap prices thus reducing some of the impact of this new competition.

But, for Radio, the worst was still to be witnessed. In the early-90s came the Internet. This ‘network of networks’ was a major communication channel linking people across the globe through computers. In not much time, Internet became a craze across the world and was very popular with the younger generation. It became an information hub and an inexhaustible source of entertainment. With its tools like E-mail and Search Engines, it has very soon gained its place in the sun.

In light of these developments, analysts forecasted the end of Radio broadcasting. However, many of them contended that radio broadcasting had successfully withstood competition from TV and Satellite Broadcasting, and would remain as one of the major sources of mass communication across the world. This is indeed good news for us at AIR!

Entry of Private Radio Players – Radio’s Second Innings

One word that caused the maximum damage to AIR and that was ‘Privatization’. It all started when our country waved a green signal to the Private players in the Frequency Modulated Segment to air their services in certain time slots on AIR.

To add to it, in July 1999, the Government of India decided to allow private players to enter the FM Radio-broadcasting sector and they were granted the permission to launch a channel of their own. Government offered a 10-year license to private players in 40 cities across India.

FM Radio: From Birth to Growth
Taking you back to 1937 when Edwin Armstrong invented the Frequency Modulated Radio. The first commercial Frequency Modulated (or FM, as everyone calls it) Radio broadcast was made on December, 1941 at Nashville. The advent of FM had certainly affected, for good, the listener base of Radio as a medium of education and entertainment in a positive sense.

In the year 1993 in India, the Government allowed the private players in the Frequency Modulated sector by permitting them to take blocks (time slots to offer their programming content) on AIR, for FM transmissions. The major players in the private FM market during that period were Times FM of Bennett Coleman & Co. and Mid-Day of the Mid-Day multimedia group. The purpose of this move was to earn revenues for us by the way of license fees, and provide more variety for listeners.

Programs offered by these private stations, however, were more listener-friendly and innovative than our programs. As a result, these channels became very successful in a short span of time (mid-90s) and thus attracted high advertising revenues.

By 1997-98, private FM business had grown to Rs. 930 million. The growing popularity of private FM channels resulted in erosion of revenues for AIR. Thus, in June 1998, Prasar Bharti stopped the operations of the private FM channels with the Prasar Bharti Act, in an attempt to help improve AIR’s revenues. But this move was not of much good to AIR. The Government, therefore, decided to privatize FM broadcasts (July 1999), and came up with the 10-year license deal. However, Government refused to allow any foreign ownership in the sector.

In 2000, Government then called for bids for FM license. The government issued license to broadcast in a city. Historically, bids were thrown open for a variety of frequencies in different cities. Consequently, the bidding went quite high. Some of the people who bid high were not even interested in the business, but they bid all the same so as to create some sort of an entry barrier in order to make the business unviable for their competitors. There were cities where the license had gone for as much as Rs. 6 to 8 crores a year.

Though the government’s invitation to private players resulted in an initial rush, many companies stayed away due to the high license fees demanded by Prasar Bharti, and also because of some strict conditions imposed by it. Licenses were required to invest a minimum of over three crores of rupees as capital and two crore as working capital for every station. The private players were given license to set up 37 stations that would operate across 19 cities in India. Some of the private channels are mentioned in Table 3.


Table 3

Company (Promoter)

Stations Acquired

Times FM Radio Mirchi (Bennett Coleman & Company)


HITZ FM Radio India (Siddhartha Bahadur)


India FM Radio (Aamir Raza Hussain)


Millennium Broadcast (Gautam Radia)


Music Broadcast (Ispat/STAR)


Sumangli Publication (Sun TV)


Vertex Broadcasting (Dabur India)




Source www.exchange4


The first private FM Radio station ‘RADIO CITY FM91’ by STAR and Music Broadcast Pvt. Ltd. (MBPL), began functioning in July, 2001 in Bangalore, Karnataka. MBPL’s Mumbai and Lucknow stations were next in line of their operations. Radio City very soon achieved success in these cities and, registered high listeners ratings Sumantra Dutta, COO, Radio Division, STAR, appreciated his organization for being the first in the market (Refer Box 3). By October 2001, 16 companies were issued license to operate private FM Radio stations increased by 56% while time spent on listening to Radio tripled from one hour of viewership to three. Home listening increased to 85%, with listening at the workplace also growing at a rapid pace. Seeing the growing listener base of FM Radio, many companies increased the share of Radio budget in their total advertising expenditure. Leading brands such as Kwality-Walls, Spice, Tanishq and Airtel advertised heavily.

By late 2001, private FM transmission reached 21% of Indian population and covered over 17% of the country’s area.


Box 3

“What we are looking at is the first mover advantage. We are the first private FM Radio station in India, and we plan to cash on this .Radio City’s launch marks the introduction of a new age for Radio in India .Through our participation in this emerging sector, STAR will be able to extend it relationship with audience in India by connecting them in more ways than Television. ”
Sumantra Dutta, COO, Radio Division, STAR.


Another FM Radio channel which gained popularity at that time was ‘RADIO MID-DAY’. The target audience for this channel was, however, the car owners. The channel’s programs targeted the car owners, who had to spend hours in the traffic. The afternoon slots were focused on offering programs that appealed to housewives.
With the launch of these two and other private Radio players, overall FM listenership.

However, many people were doubtful about the survival of these private players. One of the reasons for this was, as according to Prasoon Joshi Creative Director, O&M “Given the huge amount of money spent on acquiring licenses and setting up stations, which it would take four to five years for the companies just to break-even. Also the quality of advertising in Radio Industry is pathetic. Today, in agencies spend, the bulk of the money goes into Television. Then come Outdoor Media, Print, and maybe Mailers. Radio comes the last.

‘MIRCHI’ begins to hot up the scene
October 2001 witnessed the launch of the private FM channel Radio Mirchi of Bennett Coleman & Co.’s Times FM, which soon became the most popular Radio channel.

Radio Mirchi was initially launched in Ahmedabad and Indore and soon gained an edge over the other private FM Radio players due to its excellent program initiated right from the beginning through its strong advertising and aggressive promotional campaign as being ‘hot and upbeat though desi’.

From the very launch, they believed in adopting a creative and interactive program portfolio. They have frequently updated their programs to the changing consumer preference. By recruiting young and dynamic Radio Jockeys, they were able to align themselves with the youth. On the technical front, they made sure that they provide, to their listeners, a superior reception and good sound quality.

Radio Mirchi has researched and knows its audience well. They are sure and clear about that target population. They provided the right kind of music, keeping school and college youth in mind, substituting for CDs, audio cassettes, and TV to some extent, among them.

For professionals and business executives (educated and high income group, in the age group 25-45 years), who listen to Radio while traveling or tune in for a particular program of their choice, the channel had a range of programs from news, share market updates, movie reviews, to trivia, etc. Catering to housewives, Radio Mirchi scored high on the aspect that the housewives could work simultaneously while listening to Radio. Herein, music has formed an integral offering from them. Also, broadcasts related to cooking, interior designing, beauty tips, gardening, fashion for housewives has been a useful offering in the mix.

Radio Mirchi has started organizing various contests and competitions. It organized parties for days like Valentine’s Day, Friendship’s Day. By sponsoring events when they made their presence felt .Radio Mirchi has also gone for celebrity endorsement. It used celebrities for its own advertising.

Radio Mirchi has a website of its own, which has latest news about music, music charts, lyrics of latest songs, photographs of celebrities, wallpapers, happenings in the city, contest results, etc. All this has made Radio Mirchi the talk of the town in almost all the city it was launched. It had proved itself to be the ‘latest, hottest, trendiest thing in town’.

A survey was conducted by ORG-MARG Nielsen in Mumbai in June, 2003 sample about 930 Radio listeners above the age group of 15. It revealed that the average time spent by an individual listening to Radio has increased from almost 64 minutes to 92 minutes on weekdays and to 112 minutes on Sundays. The survey also reviewed six Radio stations in Mumbai, including Vividh Bharti, to gauge listenership figures. Findings revealed that Radio Mirchi topped the survey in terms of listenership shares in Sec A, Sec A+B and Sec A+B+C, recording a whopping 8.3 lac listeners in three SECs.

Also the total daily listenreship of Radio Mirchi was up to 11.8 lac. Significantly, Radio Mirchi’s listenership was found out to be more than three times the listenership of other private FM stations in the Sec A+B+C bracket, and four times the listenership of other private players in the 15-24 and 15-34 age bracket (Refer Chart 1).

This research by ORG-MARG indicates that Radio Mirchi has managed to go past Vividh Bharti in terms of ‘Top of the Mind’ recall in SEC A listeners. Radio Mirchi recorded the highest (37 per cent) ‘Top of the Mind’ recall, followed by other private FM Radio with 23 per cent and Vividh Bharti recorded a recall of 18 per cent.

Someone Please Help…

After talking to you about all this, I know you all may be having in mind a lot of suggestions and strategies on what shall we do. Well, over the years I have realized that our image is fading and that we need to revamp our program and our organization. It is time that we work on our program portfolio to make it more dynamic and try and aligning it with the business today.

Another thing that comes to my mind is that we should have more direct interactions with our audience to gauge the changing preferences and then build relationship with them through means such as contests, talk shows, message routing programs. We also need to infuse som fresh blood in our Radio Jockeys to install energy, exuberance and enthusiasm in AIR broadcasts

Further let us publicize our self as YOUTHS-ers and by sponsoring campus events, Carnivals, Valentines’ Day, etc. Its time that we talk the language of the youngsters. Keeping in line with the famous marketing adage ‘what is visible, sells’, we should increase our visibility.

Well friends, that was all from my side now it’s your turn to say and plan to do something to help AIR get back to ‘the king of all media…!’

Case study developed in March 2003 for in-class discussion by Ms. Falguni Mehta and Gaurav Khanna, under the guidance of Prof. Sushil Bahl, Faculty (Marketing) at NIRMA Institute of Management, Ahmedabad.