* Radioandmusic.com features and salutes glorious years of Private FM Radio
94.3 My FM CEO Harrish M Bhatia in â€?Glorious years of Private FM Radio’ opens up on the vexatious royalty issue, stumbling blocks and challenges faced by the nascent medium in the last decade, and its potential growth with the roll out of Phase-III.
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What are the key challenges faced by non-metro stations in the country?
To overcome the challenges faced by the radio industry in the cities and towns other than the six metros the industry as a whole needs to work in tandem. The most important is the royalty Issue, till the time it is completely solved; it is difficult for the industry to grow efficiently.
The absence of an acceptable radio measurement tool and content restriction are big restraints for the industry as still we are not allowed to provide any kind of news content. Some media planners and agencies still buy radio based on the size rather than strength of the station in respective markets. The cost of the infrastructure of Prasar Bharti is quite high and the license period only for 10 years is a huge concern for the industry.
The biggest concern for radio is advertising. Does getting advertisers still remain a huge task for FM players?
In the tier II and tier III cities advertising is driven more by the local advertisers than by the corporate. For My FM, the share of retail advertising stands close to 60%, and for the industry as a whole, the share of retail advertising is estimated to be about 40% as projected by PwC. Having said this, national advertisers are yet to realize the potential of the industry.
Radio as a medium is still sprouting, the growth in the industry has been volume driven with ad volumes growing by 19%. Although, the advertisement rates have witnessed hike with My FM reporting a decent increase in ER. The consumption in the tier II and tier III markets has amplified and the future increase in consumption is bound to come from these towns. Still, it is noticed that the advertisers continue to pay a premium for the metro markets.
Radio is currently Rs1325 crore industry and is likely to grow up to Rs 1653 crore by the end of 2011. This will be measured as a 25% y-o-y growth. Additionally, there will be a significant growth in the advertising pie as well. The same is expected to increase from 4.5% to almost 5% this year. Lastly, Radio penetration in India will grow from the current 20% to 30% post Phase-III.
Tell us about the progress and growth of My FM over the years?
My FM has been a part of the Industry for about four years now. In a short period of time, the station has made niche for itself in the Industry and the brand has persistently endeavored to maintain a positive connection with its listeners across all its 17 stations. We attained an operational break – even in a record time of three years during April – June, 2009 quarter.
My FM owes its success to (a) content differentiation (b) loyal listener base (c) hard working and efficient My FM team. We maintain content differentiation by staying relevant, following innovation as a routine and constant teamwork wherein great ideas are shared and implemented across the network.
Several shows have been created based on extensive research, making radio a much more matured medium in these markets with plethora of shows catering to diverse and large audience base.
Shed light on the content and programming of My FM?
MY FM carries the brand proposition of Jiyo Dil Se, a philosophy that is inculcated in every aspect of the station’s offerings. The idea was to make programmes innovative yet interactive in order to connect with the city. With programmes like, Chingum Boy…, Rock the party…, Ramayana… etc, the brand kept the entertainment quotient higher with each of its endeavor. Our monthly promotions calendar ensures that we continuously churn our engaging and entertaining content for listeners eg Cricket Crazy, Music Marathon. We are doing extensive in house research to ensure that our product offerings cater to the needs of the listeners.
Cabinet’s approval on Phase-III has provided more opportunities in terms of reach, advertisers and revenue.
I most definitely agree that the Phase-III announcement has opened gates for the industry to finally walk on the growth path. The pronouncement is an enormous step forward for all of us, as radio has the power to go to the grass root level and reach where other mediums cannot. The Phase-III rollout will make sure that it spreads all over the country and finally becomes a pan-India medium.
Additionally, driven by radio’s strong value proposition and Phase-III, there is likely to be a significant growth in local advertising. Permission for multiple frequencies and relay news, sports and current affairs could create opportunities for content innovation. FM radio listenership is likely to increase from around 115 million to 200 million by 2015.
Currently, radio is accused of having relatively small listenership by many media planners and advertisers. But this scenario will change as from a 90 city medium; radio will take a huge jump and become 300 city medium. This expansion will aid radio in going way past newspapers and television and will definitely help in the growth of radio revenues vastly. The key regulatory changes in Phase-III are expected to facilitate industry growth, looking forward to receive the benefits of cost economics, format innovation, increasing reach and revised industry structures.
Is My FM contented with all the regulations and policies laid down by the government with Phase-III?
The restriction on sourcing news from AIR, even though we are all large and responsible media houses is random and antiquated. We are not too happy with this decision as every media house follows a particular style and format and we think that we should have been allowed to abide by that.
Furthermore, there has been only a marginal revision in FDI limit from 20 per cent to 26 per cent, which is not encouraging for a nascent industry and will not unleash the true growth potential of the category. It is important that media platforms be treated neutrally, with radio been given a fair chance, with the FDI limit increased to at least 50 per cent. Finally the medium needs to first become viable to attract FDI. This will only happen once the concerns like music royalty, extension of license period are addressed by the government.
Where do you see FM Radio in the next five years?
Five years from now, radio can be seen as one of the most important means for spreading awareness all around. One can see huge potential in radio as its share in Indian pie comes closer to the global average of eight per cent of media spends. The government policies and the Phase-III roll out are sure to make it reach new heights by increasing the efficiency and reach of the medium. Futher more time will come when there will be campaigns which will be exclusively for radio.
And as far as, My FM is concerned, sky is the limit for us. We want to pioneer a lot of activities for the cause of radio and take My FM to national level.
