The Indian commercial FM radio industry’s growth continues, with dozens more stations set to open in the next few months and many successful networks already on air in major markets. Radio is a particular focus in this year’s FICCI international entertainment business conference being held in Mumbai this week.

Hot radio topics include competition and sustainability in the rapidly expanding industry, format differentiation and audience research. A large contingent of Australians attended the conference as part of an entertainment industry trade delegation.

338 new commercial FM licences have been auctioned, covering 91 cities in this round of licencing. A total of 247 licences have so far been won by 37 different companies and a third round of licence releases also on the Horizon.

The Federation on Indian Chambers of Commerce and Industry (FICCI) has been running the conference for eight years, growing it into Asia’s largest convention on the business of entertainment. As well as radio, India’s booming Bollywood film industry is a dominant presence, with tv and multi-media broadcasters also included in the program.

Opening the conference, Indian Broadcasting Minister Dasmunsi told delegates that all the radio licences which have been auctioned so far will all be on air soon, then a second round of auctions will take place. The new commercial FM stations have created an instant commercial radio industry in a country that was previously monopolised by the government owned All India Radio network.

Community Radio licences will also expand, with the Minister announcing at the conference that licence ownership will no longer be confined only to educational institutions, but expanded to Non-Government Organisations (NGOs) of all types working with community groups. 100 applications for community licences have been received so far. Until now the licencing of community stations has been a controversial topic, with commercial stations worried about competition and the government worried about politicization of the airwaves by community groups.

The Minister also foreshadowed lifting the ban on FM commercial radio news bulletins, opening the way for the recently licenced commercial stations to take up new content segments of interest to India’s increasingly well-educated audiences and differentiate themselves in the marketplace.

A Price Waterhouse Coppoers report on the state of the Indian entertainment industry found it had grown 20% in the past year, and predicted further growth at a rate on 18% next year. India has a young population that is “one sixth of humanity.” The ecomony is growing at 9%. While there are many parts of the country where people have little disposable income, the growth of the middle class has been rapid in recent years and opportunites are expanding for media businesses as individual wealth grows.

One speaker observed that new consumer growth is coming from the Indian and wider Asian regions, and while most of Asia’s populations cannot afford to pay very much for their content, there is still profit in a lot of people paying small amounts for entertainment products.

The growth of the commercial radio sector within the winder entertainment industry is “significant” according to the PWC report, which said:

“Radio is the cheapest mode of entertainment… and reaches out to nearly 99% of the population. The opening up of the radio industry to foreign investment has been a major boost to its growth.

“Share of advertising revenue is relatively low, just 2.4%… but is on the rise. It is expected to increase to 5.5% by 2011. The Indian radio industry is set to grow at the fastest rate of all entertainment secotr businesses, from Rupees 5 billion to Rupees 17 billion by 2011, cumulative growth of 28%.”

Major top 10 advertising categories using radio are: television, real estate, cell phones, retailers, publishers, jewellery, mutual funds, life insurance and biscuits. The report says revenue growth is being driven by the new players entering the market.

Radio listening habits in India are a little different from Australia. 70% of people listen at home, 32% listen while driving, 9% listen in public places and 7% listen at the office. Average listening times are shorter than in Australia and most of the new commercial FM stations play Hindi Bollywood film and pop music.

Unlike Australia, India does not have a converged regulator, and a ministry official warned “there is a long way to go yet,” before that happens. Critics of this policy told the regulator that it will be “hard to regulate the industry once the horse has bolted.”

Format differentiation was the main topic discussed in the conference’s radio plenary session, with CEOs of local companies acknowledging more differentiation is needed and international speakers presenting case studies from Australia and the UK.

AFTRS Head of Radio Steve Ahern gave case studies of Australian stations which had successfully differentiated their formats and spoke about the benefits of a united approach to selling the radio medium, exemplified by Commercial Radio Australia’s research and marketing campaigns.

Absolute Radio CEO Donnach O’Driscoll spoke about the UK market, saying that the UK experience is that radio content expands beyond music into both entertainment and information as markets mature. He also spoke about the importance of the ‘presenter’ urging managers and PD not to just have them “filling in between the songs” but instead building a credible personality that the radio listener will find engaging.

Radio City CEO Apurva Purohit outlined five critical success factors for the business of radio which included, segmentation and differentiation, robust measurement system, selling radio’s premium, no restrictions on content and niche formats.

Big FM COO Tarun Katial spoke about radio increasing its reach as it moves into smaller cities and the need to cover local community issues of interest to specific markets. He wants to extend reach to people “at the bottom of the social pyramid” even though they do not have much disposable income, so they can benefit from radio’s social dividend.

Both incumbent radio giants urged the upcoming new players not to follow their Hindi Bollywood/pop music formats but to develop new formats of their own.

Anil Srivatsa, a well known Indian broadcaster in America as well as India, who now heads India Today’s FM division, focused the discussion on the announcers, reminding management that the personal connection of the announce with his audience is an important element in station success.