FM radio becomes a major hit; music companies hit the most

Mumbai: Frequency modulation (FM) channels have really hit it big time across almost all major Indian cities, but music companies are crying soar.

A market research survey undertaken at the behest of the Indian Music Industry, an association of music companies in India to study the trends in listening habits as well as changes in purchasing patterns, reveals that going by the number of listeners and the number of hours spent listening to FM radio, FM stations in India have seen a growth of 85 per cent in the last six months.

But at the same time, the round-the-clock broadcast of latest film hits by FM channels has resulted in sales of music cassettes and CDs, crashing by as much as 40 per cent both in rupee terms as well as in volumes, say sources in music companies.

Film and music industry sources say music companies, already suffering from having to pay huge music selling rights to film production houses, are getting hit very badly. Saregama managing director Abhik Mitra says sales of CDs and cassettes have dropped by 30-40 per cent since the launch of FM stations, while Crescendo Music managing director Suresh Thomas says sales have dropped by about 20-25 per cent.

They say the fall is marked at the lower end of the market, as customers with lower purchasing power have cut down on CD and cassette purchases finding FM channels a welcome alternative.

The Phonographic Producers Limited (PPL), a body representing music producers, has taken certain FM stations to court claiming that the free use of songs and music is affecting profits of music companies, which are its members.

Others say in the long run, the situation is bound to stabilise. For instance, at last count in the US, there were 9,069 FM stations and 4,949 AM stations, while each county in the UK has more than one FM radio station. These countries account for the highest sales of music cassettes and CDs in the world.

At present there are about 15 FM radio stations operating in India, and heading the FM craze is Radiocity, a venture promoted by Music Broadcast, which holds FM radio licenses in six cities, including Bangalore, and is supported by News Corp's Star, which already runs a 24-hour English news channel in India.