The radio industry has seen explosive growth in the last decade. As Fever grows to all metros, there seems to be a huge cost involved in licensing
Archit Ambekar | Mumbai | April 5, 2016[caption id="attachment_59511" align="alignnone" width="480"] Harshad Jain[/caption]
Radio has been the only industry which was not given a boost. Television grew, digital is growing, but it seems that radio is still running the tortoise’s race. While there are efforts from the government to boost this medium, it seems that it will still take a few more years for the medium to reach its peak.
It is known that the Telecom Regulatory Authority of India (TRAI) recently asked for comments from radio broadcasters regarding measurement for the medium. While other broadcasters want a new measurement system in place, it seems that there is one broadcaster who feels the current ratings body is doing the right thing.
Unlike other radio broadcasters, Harshad Jain, CEO of Fever, thinks the diary method is the only measuring system where ‘radio’ is measured. This measurement is specific only to radio and not any other medium, he explains. BestMediaInfo caught up with Jain recently in Mumbai to seek his thoughts on the radio industry. Excerpts:
Evolution of radio:
In the last decade radio has seen an explosive growth. If we were to trace back the early journey of radio, in the early 50s and 60s, it was the primary source of entertainment. If you look at the end of 70’s and early 80’s, the boom in satellite television, radio took a hit. Suddenly radio had become primitive. In that era, radio used to have a lot of cult programmes and had a huge amount of appointment listening, similar to a Mahabharat on television. And at that point of time, radio took a back seat.
From early 80s to 2000, radio completely lost a lot. The advent of radio became big again starting 2004-05, with the advent of first FM stations that came in, in 2004. From then, the industry hasn’t looked back. It has been fuelled by many things and has had explosive growth for various reasons. The product improved from what people used to listen earlier. Newer content was brought in with RJ’s, some comedy and a lot of other things.
Mobile phones changed the radio experience. From primarily being an in home medium, radio became an on the go medium. This trend continued till 2010, and then in the last five years radio is exploding. Radio has gone to much more cities, penetration has got higher, and lot of advertisers have come on board.
Government initiatives for radio’s growth:
The fact is that, radio is only entertainment medium where you end up paying license fee to the government, you end up buying spectrum. Hence the cost of investment for entry is huge. For instance, we have invested in excess of Rs 450 crore to continue our radio licenses. Of course, the good part is, the license period has increased from 10 years to 15 years.
From a government stand point, I think they are evangelising the medium in a big way. The last radio auctions opened up about 600 plus licenses. In its full avatar radio is going to have presence in top 700-800 cities.
Radio is a medium where differentiation is very low. Where the differentiation lies is we are not only about music. We are much more than music. Our Bollywood partnerships are the highest. Apart from that, sport is very big with us. We’re doing the first radio awards, called ‘Entertainment Kabab Awards’, on radio and it is not about music but far beyond. We’ve got reality on radio, sit-coms, or mythology. So we experiment a lot. Apart from that we run something called Fever Voice of Change which is our CSR initiative.
Monetisation of radio:
Monetisation is a challenge for any company. For us, it’s a way of life. We believe we have the pulse of the listeners. We’ve been able to fine tune the blend between what the listener requires and what the advertiser wants. And I think that’s the reason why we could invest a large amount in licensing.
Measurement on radio:
It is a very different medium. For a different body to happen, you need to know what that body is going to offer. In absence of a structured measurement system, I think Radio Audience Measurement is the best way to look at it because that is the only study which is radio specific. Any other study, say, IRS, is a print based study and it doesn’t apply to radio. While RAM covers all the aspects of what a radio player wants.
The current measurement is used globally by advanced nations. Now if there are problems, it is a global problem and not India specific. Any technological solution is welcomed, but what will that technology offer.
Response in key markets:
They’re doing very well. In Delhi we are market leaders and in Mumbai, we are the fastest growing radio players. We’re growing our revenues exponentially. So clearly, we are doing well in both the markets.
We took over a company in Chennai which had a frequency called 91.9 and a radio station called ‘Ahaa.’ It’s a Bollywood station in Chennai and has got off to a great start.
We have just begun, so monetisation will take a while. For the terrestrial business, I think we have a substantial amount of business from our current set of clients.
We’ve not looked at that market very closely. But does it have a future? Of course, it has a future. From a global stand point, community radio is very big. Although monetising it is a challenge, and it will remain for every medium.
It’s booming. But businesses are run by making money. I don’t know if a single internet radio is making money. So will people listen to it? Yes. Internet radio while has great streaming of music and all, we must realize that people listen to radio not only for music, but listen to radio for lot of other things like weather updates for instance, where the PM comes once a month on radio to say ‘Mann ki Baat.’ He could have gone on another medium, but he came to FM radio. Internet radio is doing well, but I’m not sure on the monetising part.
Plans for 2016:
We’ve completed our metro footprint. We’re there in Hyderabad. We acquired a company in Chennai. We’ve covered the whole UP corridor. The plans are simple. We’ve just gone through a large investment event and a lot of time has gone in setting up the new licenses and channels. Now the entire effort is going to be to get them work.