A trusted means of technology-based communication, radio caters to the needs of a large number of people in the country, both in the urban and rural areas. Over the years, the technology has progressed and led to proliferation of more financially viable radio channels.
Currently the number of radio channels in Pakistan is around 150 and most of these are FM radios. The short and medium wave radio channels are expensive and non-viable in the presence of internet and other channels for distribution of content.
On the other hand, FM radio broadcasting uses frequency modulation of radio waves to provide high quality sound. The area of coverage of FM radios is generally 40-50 kilometres.
The fast-increasing number of radio channels in the country call for a look at their financial viability, including the cost of setting them up and then making profits to run them.
The FM licenses are issued for 10 years. The non-refundable application processing fee is Rs10,000 for small cities and Rs25,000 for big cities. A security deposit worth 3 per cent of the license fee has to be deposited by applicants. This amount is refundable after one-year satisfactory performance.
The license fee can vary depending on the circumstances. For example, if Pemra receives more than one application for FM radio licenses for the advertised city/location, the license is issued through an open bidding process. Applicants of radio licenses have to convince Pemra and SECP about their business plans to qualify.
"Licenses are issued only if these bodies are convinced that the radio channels will be able to sustain," says Rehmat, media analyst based in Islamabad.
He says FMs are meant for targeted audiences. "If the area is agricultural heartland, the targeted audience would be primarily farmers and those associated with agriculture. If the area is industrial cities like Faisalabad and Sialkot, the subject matter would be textile and sports goods industry, skills development, job opportunities, etc."
Rehmat says the revenue earned per rupee spent on radio advertising is the highest. It sells consumers to the advertisers very effectively. He does not agree with the perception that radio is listened more in rural areas than in the urban areas. He says out of the 150 plus radio channels, 125 are in the areas that have urban density and surplus incomes. "These comprise Sindh and Punjab, whereas those on the West are Balochistan, KP, Fata, etc. Urban listeners far outnumber the rural in this case," he insists.
Tanvir Shehzad, who works with the Deutsche Welle radio and Voice of Germany in Pakistan tells TNS that there are commercial and non-commercial radio channels that work on different models. The commercial radio channels can seek ads to finance their operations and their license costs are high. Then there are community-based non-commercial radios like on-campus radio, traffic radio, Ngo-run radios and so on. Their licence cost is minimal as compared to that of commercial radio but these are not allowed to seek ads.
He says it is very costly to set up shortwave or medium wave radio channels to throw signals at long distances. "On the other hand, FM channels need 1 kilowatt transmitter to send signals over a short distance, covering a district or two." He says this is why international channels are buying time on FM channels to air their transmission. "All you need is antenna, studio, sound proofing, transmitter, etc, to establish an FM radio," he adds.
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Shehzad says that around 120 million mobile phones with inbuilt radios are also one reason why this medium is getting popular. "People carry mobile around the clock. The advertisers are aware of this fact, and hence invest in radio advertising. There are frequent advertisements on radio about polio vaccination, family planning, pesticides, fertilizers, hakeems, herbal medicine, beauty products, tea, and so on," he adds.
As per advertising industry figures, radio ad spend (revenue) in Pakistan increased by 17 per cent from Rs2 billion in 2013-2014 to Rs2.34 billion in 2014-2015. This was four per cent of the total advertising spend on different media, including TV and print.
The share of FM 106.2 in this amount was 0.3 billion, FM 107.4 0.3 billion, FM 101 0.24 billion, FM 107 0.2 billion, CityFM 89 0.18 billion, FM 100 0.17 billion, FM 103 0.16 billion, Radio FM 91 0.15 billion, FM 105 0.14 billion billion and so on.