Is radio growing or seeing a slowdown?

There has been mixed reactions from veterans on the growth projection of 18% in the radio industry. Some say it isn't as per expectations but others are positive

Archit Ambekar | Mumbai | September 2, 2016

When Madison media revised its annual projections for all media sectors, it was seen that the growth was more or less as per its original projections. Television did see a slowdown but digital grew at 37 per cent, more than the projected 30 per cent.

If one particularly sees radio, the sector where a lot of things are yet in the developing stage, the growth projections were 18 per cent against a 13 per cent growth in the first half. It was interesting to see that an industry that is still struggling to grow because of various issues has seen this growth.

In a recent article on BestMediaInfo, Vineet Singh Hukmani, MD and CEO, Radio One, said how profits were going down as players were giving on-ground and other freebies at escalated costs to get the 'top line' growth. In spite of that, the industry seems to be growing well. Well, that is always debateable.

BestMediaInfo.com spoke to senior members from the radio industry to know about how they will maintain the growth projected in the report.

Prashant Panday

Prashant Panday, CEO, Entertainment Network India, feels that the radio industry will not report 18 per cent growth in FY17. “But it will in the FY18-22 period. Like-to-like growth will likely be 12-13 per cent in FY17. Plus there could be 2-3 per cent more coming from new Phase III stations. The full impact of Phase III will be felt from FY18 onwards. Even with these numbers, radio will continue to grow faster than all traditional media,” he added.

According to the report, the sector is expected to see ad spends of about Rs 1,823 crore against last year's Rs 1,545 crore. The report says that e-commerce and automobiles have been major boosters in the first half. It seems that newer radio stations post Phase III will add to the growth in the remaining half of the year.

Vineet Singh Hukmani

Hukmani slashes the projections as they are wrong. He said, “Madison projections are wrong as they are presuming radio rates are constant and they have not taken into account new stations that have brought down rates overall considerably. In two months, June and July, growth has been flat. In the second half we see a 9 per cent industry growth provided the festival season in Q3 is good and at the end of the year at an annualised basis, radio growth may be around 7 per cent with metro growth being muted due to multiple frequency stations in Delhi, Mumbai and Bangalore that are not able to command a rate increase and giving lots of inventory as value ads free.”

For Hukmani, the first half growth is just over 9 per cent on a projection of 18 per cent. He said, “Madison is only looking at air-check second-age which has gone up in radio but rates have come down and therefore values are muted.”

Abraham Thomas

Abraham Thomas, CEO, Radio City 91.1 FM, says things are pretty stable and going as per plan. “The first half has more or less been as per plan. There have been ups and downs. Categories like e-commerce have been low this year, while other categories have made up for it. The second half will definitely make it up for the lack because of the festive season,” he asserted.

Consumption habits have evolved and consumers are spending more on different categories, hence the industry has seen a decline from 20 per cent growth last year to a projected 18 per cent growth this year.

Nisha Narayanan

Nisha Narayanan, COO, Red FM, agrees that the first half of the year wasn't as per expectations. She goes on to explain that sectors like real estate, e-commerce, and retail – especially jewellery and lifestyle -- saw a downward trend due to various macro-economic factors like small and medium e-commerce players facing budgetary constraints and having problem in raising funds, strike by jewellers during peak wedding season, real estate slump and so on.

Meanwhile, there were negative sentiments due to litigations and delay in delivery of projects and the diesel car ban in markets like NCR where the auto industry suffered heavy losses.

Narayanan added, “However, one shouldn't forget that even 13 per cent growth is healthy growth and would improve as new stations are launched across towns all over the country. However, we may see the fruits of this in H2 and more in 2017.”

Growth in the coming months is likely to be fuelled by factors like pay commission recommendations, bonus for government employees and good monsoon bringing better consumer sentiments and purchasing power in their hands. The yearend will also see election hustle bustle as we get into poll mode in UP, Punjab and Gujarat.

While veterans have mixed opinions, it looks like radio, as pointed out by Panday, will grow at 18 per cent only from FY18 to FY22. Narayanan and Thomas on the other hand are looking for the growth to match up to the projections with the upcoming festive season and elections early next year.

Info@BestMediaInfo.com

Info@BestMediaInfo.com