FM Sector Managed A Healthy Growth In 2018 Gears Up With New Hopes In 2019

FM Sector

The year 2018 saw the radio industry managing to stay firm despite the economic disruptions caused by demonetisation and GST. With the Phase III auction of radio licences significantly increasing the reach of the medium, several players of this industry are upbeat about its growth. Legacy stations like Radio Mirchi and Red FM amongst others rolled out stations in tier II and III cities this year. Radio Mirchi had 38 stations in Phase 3, in places like Akola, Bharuch, Durg, Jhansi, Mysuru, Puducherry, Siliguri, Ujjain and Warangal. A look at the factors that defined the year for radio:

Growth factor

Radio witnessed a moderate growth on the back of new station launches despite demonetisation and GST, said Nisha Narayanan, COO and Director, Red FM. While Red FM launched new stations in Jammu, Dehradun, Nanded, Dhule and Muzaffarpur this year, Radio Mirchi rolled out stations in 14 cities like Guwahati, Akola, Bharuch, Mysore, Jhansi and Puducherry. “Growth has not been aggressive but with new stations, markets and frequencies they have had very good growth. So, stagnation has come in some legacy markets but growth has been good outside the metros where people are more receptive towards engaging with the medium,” she said.

Vineet Singh Hukmani, MD and CEO, Radio One, pegged the growth around 9 per cent. “Overall, the industry growth has been between 8 to 9% and this has largely come towards the end of Q2 and  Q3, where Q1 and Q2 were only marginally up,” he pointed out. According to Asheesh Chatterjee, CFO, Big FM, the radio broadcasting space witnessed around 6 to 9 per cent growth in 2018. Post demonetisation and GST, growth has returned to medium from August and October-November-December has seen a growth of around 15 per cent (similar to 2016), he said. “Ad ex was largely getting fragmented because of the increase in the number of frequencies.”

He also attributed the growth rate to advertisers testing waters with new mediums like Free-To-Air (FTA) channels, digital and cinema in the last two years. But they have realised the value radio offers, in terms of innovation, programme ideation, content integration, localisation and clean environment, he informed.  “They understood that radio is the best medium to increase incremental reach. It offers an extremely unique as it’s far more clutter-free and trusted,” the COO said.

Players across categories

The year also saw digital players across categories like e-commerce advertising more aggressively on the medium. For instance, international OTT platform Amazon Prime Video India used radio to promote their latest original Mirzapur. “Earlier the digital wouldn’t spend so much on radio. But they have started experimenting with it which is encouraging,” said Narayanan. She added that the retail industry has also picked up tremendously. “In the smaller markets (where we have launched) like Patna, Surat and Chandigarh, business largely comes from retail. They are more buoyant about customising and campaigns. When I say ‘organised retail’, from the regional point of view they have picked up as well.”

Sports is a sunrise category for radio, Narayanan pointed out. She hopes to see this continue in 2019 as the year is lined up with multiple properties like World Cup and IPL, among others. For instance, for Hockey World Cup, Pro Kabaddi League and IPL, radio promotions were in full swing. “Sporting events (in India) are looking at spending heavily on radio.” Like Chatterjee, she also felt more faith has been placed on the medium and it is being utilised in a ‘much better way’.

Innovating and integrating content

Like every other medium, radio players have been innovating and integrating their content with digital for their on-ground properties. Radio One simulcasts their international stations online on through which they have been getting relatively ‘more engagement with high-end phone users’, as shared by Hukmani. Narayanan couldn’t stress enough as radios are being sold from a 360-degree approach. “We have to put out our content on digital as it’s an extended arm. Putting it on digital has seen a higher growth. Simultaneously, it has given us monetisation opportunities. So it’s another revenue stream,” she emphasised.

2018 saw radio stations experimenting with platform-agnostic content. For instance, Big FM’s BIG Golden Voice was a digital-led search activity to discover talent from the start. Chatterjee explained, “When client finally buys it (content solution) he can amplify on ground, air and digital. As we go ahead more content will start becoming platform-agnostic as more of these audio advertising options increase.” Hukmani added, “We have also built tribal communities on social media for our unique audience based on their interests in international travel, Hollywood, international music, global sports and global business. We use the data from these to help our advertisers target better.”  Hukmani pointed out that digital is a means to enhance the engagement of their audiences. On the revenue he mentioned, “Revenues from the same get integrated into the advertising package.  A large section of audiences still tune into FM radio versus digital streams.

Meanwhile, radio also saw key people movements with few coming back for a second stint. Reliance Broadcast Network Limited (RBNL), which operates private FM brand Big FM, appointed Abraham Thomas as its Chief Executive Officer in October. He comes with more than two decades of experience across print, radio, TV and digital in India, China and South Asia. He has worked with Radio City, RED FM, Indian Express, Sony, Astro Broadcast and MTV. Ashit Kukian returned to Radio City as CEO. He replaced Thomas who had stepped down in August. Kukian was President and Chief Operating Officer at Radio City from 2005-15. His leadership, industry insights and operational expertise had strengthened the radio station’s performance in the industry through traditional and non-traditional revenue.

In June, Radio City promoted Kartik Kalla as Chief Creative Officer. With a media career spanning over 20 years, Kalla has been associated with the station for over nine years having previously held the position of EVP and National Head, Programming, Marketing and AudaCity. One of the latest stations Magic 106.4 FM appointed Apeksha Mehta as the Station Head in July. Mehta had earlier worked with popular brands in the entertainment industry like MTV, Zee TV and Zee Cinema. She had also worked with Amazon Bangalore, with the Amazon Seller Services team and took care of Marketing, PR and special projects for Amazon Sellers.

In June, Big FM appointed Tarun Katyal as Business Head – Metros for increasing volume in building strategic partnerships. After his successful stint of two years at the organization, Katyal rejoined the BIG network to lead business associations for key markets and scale up the inventory. Earlier in April, the station had senior leadership appointments of Shipra Srivastava as National Marketing Head and Soela Joshi as Associate Vice-President, IP.

In 2019

The year started off on a positive note with private FM radio stations allowed to broadcast All India Radio News free of cost on trial basis till May 31. Also, on the advertising front with the upcoming elections, IPL and World Cup, industry experts are expecting a double digit growth over last year. We speak to business heads of radio stations to learn more on how the year will turn out for the sector. Here’s what they have to say:

Nisha Narayanan, CEO, Red FM said “Radio will continue the growth path. Even in the challenging times, it was able to register a double-digit growth and we are sure that with elections and sports the momentum will continue. We are hopeful of healthy two-digit growth in the medium and smaller markets and a reasonably high single-digit growth in metro markets which are already on the peak of inventory utilisation. What 2019 brings in for radio is to emerge as a much stronger-enabler medium where all others (medium) will look at it to spread information/offers about them. This is due to its hyperlocal nature and vast geographical presence that has happened due to phase 3 batch 1 and 2. New advertisers, riding on success of their competitors and compatriots want to adapt radio in their media plan. Added with that is its reach from the smallest to the largest market giving them a reason to seriously look at radio as it helps them rationalise their ROI.”

Prashant Panday, CEO, Radio Mirchi said “Everyone expects 2019 to be a better year, with the much delayed lift-off in the economy finally happening. Elections will certainly help. IPL is an annual affair, and if it is held outside India this year, we need to figure out the match timings. The World Cup is also very exciting because the timing is perfect! Overall however, it is not these events that determine how any business does. It is how regular advertisers spend. I expect that to improve in 2019.” Advertisers will look for ‘solutions’, not just ‘radio’. And also not just TV or print. Media owners who can provide solutions will do well. This is a long lasting trend.”

Asheesh Chatterjee, CFO, Big FM said “The year looks promising. The national advertisers who flirted with digital and FTA channels have now realised the content integration, high frequency, long tenure, theatre of mind or surround that radio and digital offer is anything unlike its television and print counterpart (degree of customisation). They are back to radio in a big way. People who are able to give them the rightly curated solutions will see money coming their way. The growth will be in mid-teens in both volume and pricing. With very few frequencies coming in radio stations will experiment within the same place. There will be innovations in the story format. People will start defining themselves more as an audio entertainment company than FM station. That content will flow across media and will be platform-agnostic.”

Vineet Singh Hukmani, MD and CEO, Radio One said “2019 has excellent prospects and radio will gain tremendously from elections and cricket. While we cannot project a figure for specific activities, the annualised growth should be in the vicinity of 14-16 per cent, almost double the growth of 2018. Radio and digital will outgrow the other media. Pure content-play, be it digital or OTT, will have to prove themselves on profits or they will bleed further, both in India and globally. Radio companies will need to ‘improve value’ of their on-air product and stop doing activations and events to allow a positive return on capital invested on the huge license fees.”

Rahul Namjoshi, Business Head, MY FM said “There will be no major trend change. The top five-six advertising categories will remain the same. On the product side new formats will be seen on the back of strong competition.The medium should witness strong double-digit growth in advertising revenue.”

Satya Narayana Murthy, CEO, Indigo FM said “2019 should see the radio industry bounce back and register a revenue growth above 12 per cent.  We expect the advertisers of the core sectors of real estate, BFSI, auto and e-commerce to drive this growth. The industry will also be helped by a spike due to election spends and increasing spends during sporting events such as the World Cup and IPL. Radio listenership base is likely to improve with more number of cities under radio coverage. Most stations with their multiple frequencies provide differentiated and more personalised content to cater to the demand. We can expect some M&A activity to happen with industry consolidation already having begun.”

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