Commercial Radio is a radio station that generates revenue through advertising, also called radio commercials, radio spots or advertising jingles. The advertisements are released by companies which find the commercial radio to be a good medium to take their message to their customers. Several companies also sponsor popular programmes to reach out to their audience. However, the commercial radio should have a large listener base to attract the advertisers. This, in turn, depends on the kinds of programmes the radio station broadcasts.
Generally, commercial radio stations broadcast popular music to build their listener base. They also provide useful information like local traffic alerts, sports news etc to keep the listener interested. To ensure that the listeners do not switch channels, commercial radio stations employ radio jockeys who keep the listeners entertained with their smart presentation and glib talk.
KDKA in Pittsburgh, which is owned by Westinghouse, is considered to be the first licensed commercial radio station in the United States. It started daily broadcasts in November 1920. The first paid commercial in radio history was broadcast in 1922. It was released by AT&T on a New York radio station called WEAF.
Since then, commercial radio has come a long way. It literally dominates airwaves in the US and Latin America. Commercial Radio is also popular in Europe and Asia though non-commercial radio or public broadcasting co-exists with it in several European and Asian countries. The key difference between commercial and non-commercial radio is funding. Unlike commercial radio which depends upon advertising as its key source of funding, non-commercial radio companies, which are called national broadcasters or public broadcasters, are either subsidized or funded by governments or get their income from broadcast receiver licence fee.
One of the pioneering commercial radio stations in Asia was Radio Ceylon. Its Hindi service that broadcast Hindi film songs was immensely popular across the Indian sub-continent n the 1950s and 1960s. Listeners across India tuned in every week to Binaca Geetmala, a weekly top ten playlist that was anchored by Ameen Sayani. The station interspersed its programmes with radio spots that included jingles from such famous brands as Lux and Coca Cola.
India got its first commercial radio in 1967 when Vividh Bharati started airing commercials. This followed the recommendations of the Committee on Broadcasting and Information Media, which is better known as Chanda Committee. The Committee in its report submitted in 1966 recommended that “for additional resources for expanding the network and improving the programmes, advertising would be the most fruitful source of revenue” for All India Radio.
The recommendation was accepted by the government and on November 1, 1967 All India Radio launched the Commercial Broadcasting Service. The service that was chosen for this purpose was Vividh Bharati, which was essentially a programme of film music that had become greatly popular across the country ever since its launch in 1957.
The first commercials were beamed from the Mumbai-Pune-Nagpur beam of Vividh Bharati. Today, Vividh Bharati runs commercials from several broadcast stations across India. It also has an all-night service to entertain listeners. Some of the popular programmes broadcast on Vividh Bharati are Jaimala, Special Jaimala, Hawa Mahal, Inse Miliye, Sangeet Sarita, Bhoole Bisre Geet, Chitralok, Sargam Ke Sitare, Ujale Unki Yadon Ke, and Chhayageet. These programmes have entertained generations of radio listeners in India.
The advertising for Vividh Bharati is accepted at all its Commercial Broadcasting Service Centers, which are located in important Indian cities. Besides this, the Central Sales Unit of All India Radio, which is located in Mumbai, offers single window booking facility under which advertisers can choose airtime and the radio stations where their ads can be broadcast under a single contract.
The FM Radio revolution
Commercial radio got a big boost in India following the introduction of FM radio. The goal of the government in popularizing FM radio, which is the short form of Frequency Modulated radio, was to improve programme content, and give listeners a wider choice of programmes by allowing private players to set up radio channels. There have been two major initiatives in the introduction of FM Radio. In Phase I that was introduced in 1999, 21 channels were set up in 12 cities. In Phase II that was initiated in 2005, the FM radio market literally exploded in India. The number of FM channels grew to 242, and their footprint spread across 85 cities. Phase III aims to take FM radio to towns with one lakh population. Once this is formally launched, the FM radio will be available in 294 cities and the number of FM channels will jump to 839.
The main source of income of FM radio is advertising. However, it is not as lucrative as TV or print advertising, and most FM radio channels are struggling to break even. Together, FM radio manages about four per cent of national ad revenues. However, most of this is shared by the top five FM radio channels. The key reason for this is the popularity of radio. According to Indian Readership Survey data for the second quarter of 2012, the estimated audience of radio in India is 158 million. Of this, 106 million are FM radio listeners. The TV channels, on the other hand, have a viewership base of 563 million while the print media reaches 352 million.
It is interesting to note here that India is not the only country where commercial radio has failed to attract advertisers. The average share of radio in global advertising ranges from 5 to 10 per cent across the world. This compares poorly with ad revenues that are garnered by the print and television industry.