Ciao'14 | 2014 - A hit or a miss for Radio?
Radio has been an evolving industry which has provided communication as well as entertainment for the longest period of time. It is a constantly changing medium which raised the bar of expectations with the recent developments.
When organizations are busy evaluating the entire year, 2014, and strategizing their 2015, we at Adgully have been constantly talking to experts in various domains to understand how 2014 was for them and their industry. Likewise for this edition we caught up with some of the radio experts who shared their 2014’s experience with us.
Though as we all know that the radio industry did not see that much promising growth in the year 2014 but undoubtedly it managed to make its presence felt quite effectively. With the rollout of FM Phase III licensing, the Indian radio industry is optimistic about its huge growth. Phase III implementation is said to bring about a change the industry has never seen before. FM Phase-Ill Policy will extend FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. An important key development was the increase in foreign direct investment (FDI) from 20 percent to 26 percent which might make way for more investments. In a different turnout, foraying into radio business, leading media group Jagran Prakashan (JPL) announced the acquisition of Radio City 91.1 FM.
We cannot deny the fact that radio has gone from experimental applications to the blooming to its commercial success giving a hard fight when television came to the scene. Still a large percentage of our population enjoys radio and some still prefers it to be a part of their lives while on-the-go. We have some of the best radio stations which produce great work on an everyday basis.
Nisha Narayanan, COO, 93.5 Red FM said, “Red FM has performed well. We came up with innovative programming through new properties such as RED BANDSTAND and mega events such as Kapil Sharma’s show which connected to our listeners on a larger scale. Also, other activities like RED LiVE have created a buzz amongst the masses taking RED FM to newer heights.”
Harish Bhatia, CEO, MyFm said, “Year 2014 has been a good year for us. Our results are a testimony of our performance. Our existing clients have reiterated their faith in our station as they have been able to see the value add that we have brought to their businesses. In fact, our ad rate hike was received very positively by them. We added newer category like e-commerce to our list of clientele and we have been very effective in helping them reach out to their target audiences.”
“Innovation in programming helped us in attracting new advertisers in 2015. Our special initiatives like season 2 of TASHANBAAZ in all HSM and RED RAAS in Gujarat gave further boost to the revenue through 360o initiatives. And to top that Pujo this time had major part of it in Q2, giving boost to Kolkata and East markets making it overall a satisfying H1 and giving us a growth of healthy 20% YOY in revenue,” Narayanan said.
“On the programming front, our morning time band show focusing on infotainment is amongst the most unique in the industry. In the evening timeslot, we have Shekhar Suman bringing in his brand of intelligent humor which has been very well received. This customer centric content has led to consolidation of our position as the top station in all our markets,” Bhatia said.
Prashant Pandey, CEO Radio Mirchi, said, "It was a fantastic year for radio and for our radio channel."
One of the changes that Radio industry witnessed was the expansion of in-store radio which enables brands to come with their own radio station and take the brand much more closely to its target audiences. To know how the year was for that side of the radio industry, we asked Anil Srivatsa, CEO, Co-Founder, and Radiowalla Network which is the in-store radio specialist in our country. He said, “The industry did grew in the year gone by and the brands understood the need of in-store radio and started adopting the same. We are now the market leaders with 6500 outlets between India and Middle East with a 500 million reach every year. We are surely looking at expansion in the international markets in the coming year.”
Was the year 2014 a silent one for radio?
According to Narayanan the credit for the overall growth goes to the advertising revenue and the versatility of the programming that radio channels are offering. Non-metro markets have equally contributed to the growth of radio industry during the last one year.
On the contrary it’s been a good year for RED FM. Based on the market reports and results published; RED FM grew highest amongst its peers more than 20% YOY and (touch wood) the growth is continuing till date. “As a matter of fact, we had in the beginning of year itself set our objectives on these lines, anticipating that with elections and even after that the industry will see both Volume and Value growth. We have grown both in metro cities and Tier II. While in metro cities the growth has been at an average of 20-22%, the non-metro’s (a sizeable number in our network of 50 station) have grown at about 30% plus,” Narayanan added.
Bhatia opined that it was not a silent year in terms of business. “On the advertiser side, new category of e-commerce have started sampling the medium and existing clients spends have also increased. Apart from this Automobile, BFSI, Media & Entertainment remained the big spenders this year. 2014 being an election year brought in incremental revenues for the medium and the industry grew at 10-12% overall. With Phase 3 round the corner, consolidation has started taking place in the sector and it will continue till Phase III happens,” he said.
Expected Challenges and Trends in 2015:
According to Narayanan, Phase III is the biggest challenge as well as opens a huge opportunity. “We have plans to expand our reach and offer better value for money to our patrons. We are looking at all potential cities that are seen as cities of future. Being a CHR station, we are also keen to connect more with our TG through 360 degree connect,” she added.
Also she strongly feels that brand extensions needs to be strengthened hence in 2015 one can see more from us in terms of RED LIVE concerts, RED Digital and RED Activations. “We are currently in the process of strengthening our teams and infrastructure to capitalize on our strength of presence in every nook and corner of the nation as the largest radio network,” Narayanan said while concluding.
According to Bhatia the biggest challenge that the industry would face is the delay in implementation of Phase III. Secondly, restriction in news broadcasting for private radio channels is another issue which will prevent content differentiation. Thirdly, the copyright board is also not in place which has left the music royalty issue unresolved and it will have negative impact going forward on Phase III. Fourthly, on DAVP rates, the government has been unable to create a price model which is linked to listenership and pays radio stations according to it in a particular city, currently old radio station (before 2007) get dis-proportionately higher price and new radio stations get unexpectedly lower price.
Srivatsa said, “I feel that the concept of radio to become more engaging with the consumers and store. We want to engage in a way with our consumers that they can there and then place a request for their favorite song. Having said that I mean that, we want to make this platform a communication tool from an ambience too and would also look at making a revenue model by welcoming ads on the same.”
With this radio players surely expect a positive 2015……we at Adgully wish all our readers a Happy New Year….!!! | By Aanchal Kohli | Twitter: @aanchalkohli