Why WorldSpace crashed
WorldSpace had filed for bankruptcy under chapter 11 of the US laws in 2008 after incurring debts of over $2.9 billion. The shutting of Indian operations, therefore, was imminent.
The demise of WordSpace (WS) radio, which shut down India operations on December 31, has made many like G.R. Gopinath, Chairman of Deccan 360, a sad man. "WorldSpace was my world. I started my day with yoga with WorldSpace radio on - listening to either Carnatic or Hindustani classical music. If I had not started my logistics business, I would have bought the Indian business of WorldSpace. I still hope somebody will buy it," he says, summing up the mood of many among the 163,000 subscribers of the radio station in India. WorldSpace had filed for bankruptcy under chapter 11 of the US laws in 2008 after incurring debts of over $2.9 billion. The shutting of Indian operations, therefore, was imminent. So, what went wrong with the business?
Losing Battle with Free-to-Air FM Channels: The biggest problem with the company was its business model itself. Till December 2007, WorldSpace had been able to gather a mere 163,000 subscribers in India, whereas the essentialy ad-supported, free-to-air FM radio stations such as Radio Mirchi reached out to over 5 million listeners in Mumbai and Delhi alone. This, however, wasn't the only problem.
No Spectrum Allocation: WS also banked on "Hybrid" digital radio services. a combination of satellite and terrestrial transmission, which would allow them to broadcast to vehicles through "mobile services". They failed to get spectrum allocation from the government after spending huge amounts on infrastructure such as satellite networks. The telecom regulator (TRAI) issued recommendations in 2005 but no final decision was taken.
No Buyers for India Operations: The final blow came when a bankrupt WorldSpace USA was bought over by US-based Liberty Media in December and the latter refused to acquire the India operations. "They have acquired our satellite, making it impossible for us to broadcast, but do not want to buy the India operations, despite the country accounting for 95 per cent of WS's business worldwide," a WS India spokesperson told BT.
Losing Battle with Free-to-Air FM Channels: The biggest problem with the company was its business model itself. Till December 2007, WorldSpace had been able to gather a mere 163,000 subscribers in India, whereas the essentialy ad-supported, free-to-air FM radio stations such as Radio Mirchi reached out to over 5 million listeners in Mumbai and Delhi alone. This, however, wasn't the only problem.
No Spectrum Allocation: WS also banked on "Hybrid" digital radio services. a combination of satellite and terrestrial transmission, which would allow them to broadcast to vehicles through "mobile services". They failed to get spectrum allocation from the government after spending huge amounts on infrastructure such as satellite networks. The telecom regulator (TRAI) issued recommendations in 2005 but no final decision was taken.
No Buyers for India Operations: The final blow came when a bankrupt WorldSpace USA was bought over by US-based Liberty Media in December and the latter refused to acquire the India operations. "They have acquired our satellite, making it impossible for us to broadcast, but do not want to buy the India operations, despite the country accounting for 95 per cent of WS's business worldwide," a WS India spokesperson told BT.
