“It has been another heartening quarter for Radio One where differentiation across markets is working wonders even in a difficult economic environment. Radio One operates ‘away from the herd’ international stations in Delhi and Mumbai, the first to operate 100 per cent Hindi Retro stations in Kolkata and Ahmedabad, the first to launch 100 per cent pure Bollywood stations in Bangalore and Pune, and the first 100 per cent request station in Chennai.”
April 18, 2013
How has Q1 2013-14 been for Radio One?
We are still awaiting our audited results and our board meeting has yet to take place. We are not at liberty to share exact numbers but we have had the best quarter ever in terms of revenue, EBIDTA, PBT and cash generated by the business. All key business parameters see high double-digit growth. Our team has met all targets in all seven stations and it’s a wonderful feeling to experience such consistency. We continue to add more weight to our last year’s remarkable financial performance.
What is driving Radio One’s continued success?
At a strategic business level, distance from the herd, clearly segmenting the market and catering to a well profiled audience, all at the lowest possible cost in the industry, are the pivots on which our success rests. At a programming and marketing level we are now sure Our Product = Our Marketing, and it is our product that propels us forward both with listeners and advertisers. We have a zero marketing budget and are proud of it. Our sales strategy to sell on-air product value and totally divest from activations is paying rich dividends as clients have realised that the product innovations we have done are very valuable to them as they engage listeners very well. Activations don’t fit into our business approach and we are very grateful that clients have stopped expecting that from us.
What are the programming innovations that have improved on air value?
There are many but key ones are ‘Have A Heart” with Boman Irani which allowed our well profiled educated audience to connect on city based issues. We have had a windfall with sports related properties in cricket and Wimbledon with LEANDER PAES which gave us huge traction. We are how embarking on Home Sweet Home with Mandira Bedi and Shaan which is a show on everything you need to ‘convert a house into a home’. The idea is to build ‘Audience interest led’ content out of the Bollywood Spectrum and use radio and digital connect to seed it both with listener and for advertiser. We have progressed sufficiently on these fronts and there is a lot of momentum for our product in the social media domain. We are able to do this as our audience is very focused, sharply profiled and not a generic mass! Even our client campaign innovations have a strong programming flavor and not the other way around where stations are filled with ‘force fit integrations’.
How do you plan to keep the momentum going in the following quarters?
It is easy to keep the momentum going when you play your own game and over the last year and half we’re slowly becoming experts at it. We have a lot of exciting initiatives in the content space that will keep both listeners engaged and advertisers will get value that they cannot get from any other radio station. A lot of clients have even shifted their digital budgets to fund campaigns on Radio One as we are able to connect to the digital audience also very well. Our exclusive client base – meaning clients not there on any other radio station – now constitute a significant part of our business and the rate of growth as high as we had projected.
How do you see the short-term and medium-term future of radio?
In the short term, radio will benefit from revenues flowing in from TV and print as no other medium gives you a local and economical connect. With the upcoming inventory cap on TV and even real estate clients reducing their print spends, radio is the direct beneficiary. Lots of clients who are using pure digital promotion are also realising that connecting with radio to ‘amplify’ hits on their digital properties is a great idea. Elections will also add to the radio pie for sure. The sluggish economy coupled with a weakening rupee will make all clients relook at large spends in TV and print and use radio to create both impact and sustenance locally. We see this buoyancy across radio players already. BTL budgets including outdoor will also see a diversion to radio.
In the medium term, the government needs to extend the Phase1 licences that will expire in 2014-15 on a average price formula including the vacant bids so that all players are confident of their existing businesses before Phase 3 becomes a reality. Phase 3 will be a huge boon for C and D towns and will spread radio all across this country. This will make radio command 10 per cent of the advertising pie given that overheads in print and TV will make downward price revision impossible. A few radio players have already started to get into ‘format radio’ versus ‘generic radio’ after we have pioneered it and are not waiting to acquire ‘multiple frequencies’ to further segmentation even in the metros. The cost of acquisition of metro frequencies will be prohibitive in Phase 3 and, at the same cost, players can actually improve their regional footprints in a much more efficient manner.
What are the challenges that Radio One faces?
The largest challenge is market expansion and clients and agencies have supported us in this. Then there is the regulatory challenge where the government has slowed down Phase 3 with the changes at the secretary level. We hope the MIB minister is going to take Phase 3 seriously as committed by Finance Minister Chindabaram in his budget speech. However, our biggest challenge is to break new ground in our product and this means we perfect engagement and stay one step ahead of the market with the smallest but perhaps most driven team in radio in India. We are geared to meet all challenges, every challenge is now a pleasure!
What about radio audience monitoring?
We have found that we get 3,000-5,000 ‘likes’ on Facebook or retweets on Twitter even for short-term initiatives. This is a real audience you can touch and feel and address! Our callers and SMS base is huge, running into lakhs. So, trusting some ‘unknown people’ filling 300 diaries across India is of no use. Needless to say, our clients want us to give them an ‘addressable and engaged’ audience not just some ‘statistical second hand’ listenership figures. And that is exactly what we have become good at: real differentiation leading to real listenership resulting in real response.