[cr-india] NEWS: Will WorldSpace get it right this time?

[Dr R Sreedher ,Director ,EMRC,Chennai]

unfortunately worldspace has deviated from its original aims. Had it 
pursued distance education vigorously it would have made a difference. 
It has the potential of not only delivering top quality music but also 
text, graphics and animation. For education, it can jolly well replace 
TV. But now they have shelved their proposal of carrying data and 
delivering it to a palmtop or a simputer or any handheld device. They 
could have even tried mobile phones. There is a strong movement for 
visual radio through mobile phones. It is really unfortunate that 
worldspace is becoming a pay channel. sreedher

> http://www.businessworldindia.com/july1904/indepth02.asp
> 
> WORLDSPACE
> Staying tuned to India
> Will WorldSpace get it right this time?
> 
> It is a sexy proposition. A radio that can broadcast to four billion 
> people, owns over a hundred channels and sits on two of the hottest 
> satellites in the world. When WorldSpace launched its satellite-
based 
> audio services in 1999, that is what global CEO, the Ethiopia-born 
Noah 
> Samara must have thought too.
> K.R.Harish, MD Worldspace India, at an Experience Store in Bangalore
> 
> Now five years after the launch of WorldSpace radio and 14 years 
after he 
> started putting together the business, Samara has enough cause to 
wonder. 
> WorldSpace, XM Radio and Sirius, the three main satellite radio 
companies 
> around the world have run up a debt of over $4.4 billion, and have 
only 
> about 1.7 million listeners. Of this, WorldSpace's debt is $1.4 
billion 
> and its share of listeners is estimated at 300,000, maybe less. 
Audiences 
> satiated with TV, radio and the Net have little inclination to pay a 
> couple of hundred dollars (about Rs 10,000) for a satellite radio 
that 
> gives them different forms of music free and, usually, without ads.
> 
> Not surprisingly, WorldSpace changed course last year. "Now we are a 
> media, not a technology company," asserts K.R. Harish, managing 
director 
> for WorldSpace India. It has decided to get 75-80 per cent of its 
global 
> revenues from subscriptions. India, with its large potential 
subscriber 
> base, is key to WorldSpace's plans. Over 65,000 Indians have bought 
its 
> radios over the last four years.
> 
> The result is a three-step strategy to increase radio penetration 
and get 
> more subscription revenues.
> 
> The first step is working with local vendors like BPL to ensure that 
the 
> receivers are retailed for as low as Rs 3,900, instead of being 
imported. 
> That slashes 60 per cent or more from the cost of the sets. The 
> subscription prices vary from Rs 299-1,200 for six months or a year.
> 
> The second is to aggressively pursue music companies, radio and 
television 
> broadcasters to cobble together a comprehensive 'content package'. 
So now 
> WorldSpace India has both of NDTV's news channels, RM Radio (a 
Malayalam 
> service from Asianet), CNN, Bloomberg and four channels from Sahara 
Radio 
> in its offering of 30 channels, up from 14 before its relaunch. This 
will 
> go up to 35 by the end of 2004 and 50 by 2005, says Harish. To 
enlarge its 
> bouquet of services, the company will put together a niche channel 
itself 
> if no broadcaster offers it.
> 
> The third and the most important part of WorldSpace's India strategy 
is 
> the opening of three 'Experience Stores' in Bangalore. Others will 
follow 
> in Delhi, Mumbai and Chennai. The idea is to let people experience 
> WorldSpace in the right ambience. Each of these stores has 25 
listening 
> posts. If you like what you hear, you can buy a receiver and sign up 
for 
> the service too. "Once people listen, the propensity to buy is 
higher," 
> says Sanjay Ramakrishnan, head of the consumer audio business.
> 
> So far it seems to be delivering, at least on volumes. The company 
has 
> signed on over 11,000 subscribers, largely through a direct mail 
campaign 
> to its existing radio owners. Of the average 800 walk-ins into the 
> Bangalore stores, the conversion rate is about 33 per cent, says 
Harish. 
> In a couple of years it hopes to get 500,000 subscribers from India. 
That 
> is about one-fifth of its global target of 2 million-2.5 million by 
2005 
> to break even. On revenues, he says it's too early to judge.
> 
> The cons: "What they (WorldSpace) sell is alternative music, not 
radio; 
> radio is about offering local colour and content. Plus it is not 
mobile 
> like FM radio," says Sumantra Dutta, CEO, Radio City. He has a 
point. To 
> reach those numbers, WorldSpace will have to target car owners, who 
are 
> used to free radio. And here, as Dutta says, niche content will not 
get 
> the numbers, a fact that Mid-Day's Go 92.5 learnt the hard way. So 
it will 
> be some time before satellite radio becomes a truly sexy proposition.
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Dr.R. Sreedher
Director, Educational Multimedia Research Centre, Anna university
Chennai 600025 India Telephone: +91 +44 22 30 01 05 
Residence: L 40 Staff Quarters, Anna university, Chennai 600 025 
Phone: 94 44 24402108 cell No 9444207459