MUMBAI: The radio industry is expected to witness rapid growth and development with the roll out of FM Phase III. This will bring variety in programming, consolidation in the industry and a move towards international broadcasting standards. The Phase III expansion is expected to create interesting opportunities, more innovation in content and lend robust growth to the industry.
Shedding light on the growth of radio as the preferred medium for advertisers and the key challenges laying ahead, the Indian radio industry convened at the seventh edition of India Radio Forum on 22 May in Mumbai.
This year, the forum focused on the future of radio, advantages of phase III auction including new licenses, digital options, new funding sources and a host of innovative ways to connect with the audience.
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The radio dial is being revitalized and recognized as a valuable part of the media and content creation mix. With this key factor in mind, the session ‘CEO Roundtable: Let’s get the bigger picture’ was moderated by What’s-On-India CEO Atul Phadnis.
The panel comprising of Big FM CFO Asheesh Chatterjee, Radio City CEO Apurva Purohit, Red FM senior VP & national sales head B Surendar, Fever FM business head Harshad Jain, Radio Mirchi COO Hitesh Sharma and Oye FM CEO Joy Chakraborthy discussed about how the past year fared for them and how radio as a medium can be explored further to increase its impact.
Discussing the key issue of revenue generation, Chatterjee said, “2011 was a tough year but we managed to control costs and drive collection. We aim to attract the advertisers with our innovative on-air and on-ground activities but the main threat and opportunity we can see coming towards us is the social media and we hope to integrate it into our medium and make the most out of it. Phase III will offer an inflection point to radio as now we can expand the medium in a better way.”
Pointing out radio as an under-penetrated category, Jain stated, “From a client’s point of view, radio is a very insignificant pie of the entire marketing industry. We need to establish the power of the medium to ensure advertisers take us seriously.”
He further stated the key initiatives undertaken by Fever, for example, where the radio play ‘Gandhi’ and a campaign to name a road in Delhi after Sachin Tendulkar. “With such initiatives, we draw attention from advertisers. When you approach sponsors or advertisers with such data they cannot ignore you.”
Meanwhile, Chakraborthy expressed the need for unity amongst the radio fraternity. “I believe radio is a very under-priced medium. Unity amongst all the leading broadcasters will ensure that we can hold on to a particular selling rate to drive revenues. This year, I would personally want to try and retain people into the organisation as many in the industry feel that television is a better medium to work in,” he stressed.
However, Purohit differed saying that 2011 was one of the best years for Radio City.”We maximized efficiency and increased our market share by two percent and are the second highest value share player in the market. But we need to understand that radio is only a 10 year old medium and is still in stages of infancy. Cost, revenues is all challenges we will have to face from time to time. Short-term results cannot be expected.”
Sharma and Surendar expressed a very positive outlook. Both said that radio has a very bright future. There are challenges to face but currently all the broadcasters are doing well with differentiated content. They are trying to find their strengths, they stated.
Discussing the current strength and weaknesses of the radio industry, the panelists also discussed strategic options to improve the business and their vision for the industry in the coming three years.
Discussing the way Oye FM has changed its outlook Chakraborthy said, “We became very transparent in our approach in terms of the rate card. One thing you need to understand is that the selling happens on a market to market basis, it’s not possible across the country as a whole. Selling is an effort as you are spending money to sell content thus transparency is very important. We faced a 17 crore loss last year and need to accept that we all are bleeding and need to be together to survive.”
Disagreeing with his view Sharma stated, “Each station has a different network and market and they are all at various stages of evolution. There will be one-two years of pain for all. Infact if the phase III has been delayed it’s for our own good. It will happen soon and revolutionize the radio business. We need to look at a larger picture now.”
Chatterjee added, “Phase III licensing will make advertisers and agencies more educated on what radio can offer to them as a communicative medium.”
A major part of radio’s interactive medium is the internet radio which has developed over the years providing alternative content but competing with much larger digital players across the world. Commenting on the growth of PlanetRadiocity Purohit said, “We started PlanetRadiocity and the internet radio about two years back and today we are around the 14 largest in terrestrial area. The positives are that we can launch alternate genres and differentiated content on it. But on the whole we are just the distribution pipeline. It ultimately depends on the consumer on one side and content creator on the other.”
With radio reaching a stabilization period, the inflection point in the past year was aiming to achieve a growth in listenership and advertisers to increase the industry’s market share from four to six per cent. The panel was of the opinion that 2-3 years down the line, the reach and quality of radio will improve.
Phase III will address all these issues of the radio industry and will develop the radio pie six times from its present share. The key is to increase radio market share from four to six per cent and sell the concept of radio to the advertisers and sell content.
However, presenting a different side of the story, Purohit claimed, “With or without Phase III we will achieve the six per cent in the market share. Currently, the geographic coverage of radio is 30 percent and with the oncoming licensing expansion it will move up three times as the number of advertisers is also increasing. Radio is a largely undefined medium and that’s the beauty of it. There are lots of opportunities to monetize it.”
The introductory session between the key professionals brought about a very healthy discussion throwing light on the opportunities phase III expansion will bring about in the radio business and how key players in the industry can maximize revenues and growth through value creation and consolidation.
