Financial Daily from THE HINDU group of publications
Friday, Jun 21, 2002
Industry & Economy - Radio/TV
WorldSpace sees no threat from FM radio
CHENNAI, June 20
THE entry of private companies into FM radio has undoubtedly renewed the interest of advertisers and listeners in the medium but has it stolen the limelight from WorldSpace - the only player in the satellite radio space?
Launched in 2000, WorldSpace was positioned as an audio medium that offers better clarity (digital signal), has greater coverage and offers better choice. The WorldSpace broadcast can be received on portable receivers directly from the satellite and does not depend on any terrestrial or ground infrastructure.
However, analysts believe that private FM radio may be the choice of advertisers (and perhaps even listeners) because of its low-cost and localised reach. So does WorldSpace consider FM radio as a threat to its existence?
"Not at all," says Mr M. Sebastian, Director-Business Development, WorldSpace. "We perceive WorldSpace and FM as two complementary media opportunities, belonging to the same audio category," he says.
Mr Sebastian explains that the uniqueness of WorldSpace is its wide coverage area and its capability to offer a range of channels. "Currently, there are more than 25 channels across the globe, covering almost every genre of music and meaningful to almost everyone in the family," he says.
Though FM may not be able to match WorldSpace in its bouquet of offerings, it does have the advantage of catering to the tastes of local audiences and, of course, low cost. For instance, WorldSpace has a wide range of receivers to choose from, ranging from a minimum cost of Rs 6,390 to Rs 11,990. Compare this the ubiquitous radio which is present in almost all households and comes cheap. Mr Rajeev Karwal, Senior Vice-President, Philips India, confirms that the sales of radio sets have actually gone up after the launch of private FM stations around the country.
From an advertiser's perspective, FM radio offers focussed localised reach at low ad rates. But Mr Sebastian argues that WorldSpace caters to the high and upper end of the society which is spread across the country. "This should be the anticipated reach of any advertiser," he says. However, some FM channels are also targeting the same niche of listeners. Also, till date WorldSpace has not positioned itself as a strong advertising medium.
"This is our first phase. We are looking at further refining our bouquet of channel offerings. Once we have achieved a benchmark in terms of reach we would be aggressively looking at advertising as a revenue stream," admits Mr Sebastian. Till date, around 35,000 receivers have been sold across the country.
An ad agency executive points out that since only 2 per cent of total ad spend goes to radio, the going for WorldSpace will be all the more tougher. "The resurgence of FM radio will definitely have an impact on WorldSpace," he says.
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