Why do FM stations play music?

I’m not being facetious here. Indian FM radio stations have been complaining that the royalties they have to pay on music are squeezing their margins and even driving them bankrupt. Not only that, if your value proposition is good/ popular music, you have to compete not only with other FM stations, but with music channels on TV, satellite radio, and CD/ cassette/ MP3 players (which keep getting cheaper every year). How the hell do you make music a USP?

One way to do this ts the Go FM or Radio Indigo way: differentiate yourself and play music which nobody else plays (Western music in their case). Except that Go FM found it couldn’t make any money doing that and moved out of the niche. I sincerely hope Radio Indigo doesn’t go the same way – evenings without Malavika would be intolerable – but let’s not get too optimistic. In the US, niches are large enough or valuable enough to support themed stations – country, jazz, or rock – in India, they don’t seem to be, or at least radio stations can’t figure out how to crack the market.

Extending this, why not differentiate yourself by not playing royalty and fee-based music at all (or substantially less). Ways to do this would include:

• Play music owned by smaller companies who don’t have enough bargaining power¹ to charge significant royalties. This does raise the frightening possibility of FM radio stations dedicated to struggling Bhangra acts from Doaba, or Bhojpuri film music, but hey, there’s probably a market out there.
• Chuck recorded music altogether. Get local musicians into the studio and let them play live. This will lead to a lot of crap going out over the airwaves, but will also help in the discovery of true gems. It also has immense branding scope. Radio City Bangalore used to do this on Sundays – I don’t know if they still do.
• Chuck music altogether. Just have people talking. This could be radio drama, or talk radio. Regulations prohibit private stations from doing news, but they can still do interviews and current affairs. And if the subject is city-specific, the audience is matched to the content. MTV is forced to make shows with an all-India appeal, but FM stations can make shows customised to their own, city-sized coverage areas. This is being done in Bangalore – Indigo decided to run Independence Day specials on people who had made a difference – and they interviewed a guy who had volunteered to become a Bangalore traffic warden. It was completely Bangalore-specific, with nothing to do with the rest of India. I loved it. (In fact, it’s what prompted the post.) Finally, there was quality MSM coverage of local issues. And Radio City has been doing similar stuff for ages, Wimpy assures me.

The question is, why aren’t more stations doing this more of the time. Some reasons I can think of are:

1. Supply side issues for music: playing local musicians requires local musicians to exist in the first place. Even if they exist, setting up a system to find, filter and record them is going to be long and painful.
2. Supply-side issues for non-music: this is going to be a real problem. Doing radio dramas or current affairs or talk shows means you either have to hire stars or create them, whether it’s drama stars or journalists or presenters. So first you’ve got to fight to find talent – a massive problem in India especially right now – and then you’ve got to fight to prevent TV channels from poaching it.
3. Demand side issues for music: Gut-feel, this is probably the most major issue. I don’t think India has developed a long tail consumption culture yet. Eardrums² might all be chasing Himesh Reshammiya rather than the neighbourhood rock band/ Carnatic singer/ school choir. But is this just an issue of bad marketing?
4. Demand side issues for non-music: Gut feel again, this is probably the most minor issue. Going by the success of TV news channels, as a concept there’s probably enough demand for talk radio or current affairs, especially if it’s localised. The problem is going to be with the level of localisation. In Bangalore or Pune, one city affairs channel should be enough. But Bombay will have different audiences and advertisers for town, for the western suburbs, for the central suburbs, and for Navi Mumbai. Delhi will have similar problems, though perhaps not as extreme. Perhaps this is why stations in Delhi and Mumbai are so homogenuous – chasing 20% of the music listening audience is still going to give you a bigger audience than chasing all the current affairs listeners in Delhi.

To a limited extent, localised non-music content has taken off, even if it’s just small segments like traffic and weather updates. These are low-investment and replicable, though, and I’m waiting for differentiated content to come up.

There are two more posts I can make on this topic now that I’ve started off: one on the regulatory changes that would make localised content spring up faster, and another one on why localised content matters so much. Sadly, my post backlog is massive, and I’m making no promises about when/ if I ever write them.

¹: Or as it’s called in Punjabi, aukaat.
²: If the unit of TV viewership is the eyeball, shouldn’t the unit of radio listenership be the eardrum?