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Digital no threat, govt must reduce licence fee and relax norms to fuel growth: Vineet Singh Hukmani of Radio One

In an interview with BestMediaInfo.com, Hukmani, MD and CEO, said Radio One is on a solid growth trajectory with EBIDTA soaring more than 50%. He hopes the elections will lead to at least 15% growth in annual revenue because of increased political advertising

Vineet Singh Hukmani

FM Radio is not losing out to digital music streaming services and in the future also, the medium won’t face any threats from music apps, feels Vineet Singh Hukmani, MD and CEO of Radio One.

Despite the rising popularity of music apps such as Gaana and Saavn, Hukmani believes these can never be profitable as they have miniscule subscriber base. “The advertisers are not going to prefer online apps because of the miniscule subscriber base. Nowhere in the world are these apps profitable,” he said.

Hukmani said the speed at which radio content and advertiser satisfaction is created at the lowest cost is unchallenged by any other media.

The head of the 11-year-old radio channel, which mainly caters to the upscale global Indians in the metro cities, said the next phase of growth for radio would be unleashed only if the government reduced the annual licensing fee and relaxed merger and acquisition norms.

Excerpts:

Radio has had a challenging time in the last few years in terms of growth. How does the current fiscal look like?

This year is better for us and for the first half of the financial year, our EBIDTA is up 54.7% as compared to last year on improved efficiencies of the business.

Do you think this growth rate would improvise further considering the upcoming general elections? Is there any special strategy to make the most of elections?

Radio is a primary medium for political parties during elections and the medium will benefit by an average of about 10-15% during the election year. We cater to six million upscale educated metro audiences and therefore our election-related programming will be very different from other super mass radio stations.

How is the merger of Next Radio and HT Media’s radio arm going to impact the FM industry?

The proposed merger with the metro stations of HT Media is subject to clearance from stock exchanges, The National Company Law Tribunal (NCLT) and the Ministry of Information and Broadcasting. We see a timeline in the vicinity of 14-16 months or so on this and, therefore, till then it is business as usual for both companies. It is too early to comment on how this can or may affect the radio industry but it can create an opportunity for ‘supreme metro city leadership’ due to well-segmented formats.

Regional languages are driving the growth of content platforms. How are national FM players seeing this opportunity as we see lack of enthusiasm in them when it comes to going regional?

Our expertise relates to an ‘upscale global Indian’ in metro cities only, I would not be the right person to comment on this. But the basic business formula is stressed as licence fees of cities are high and regional language advertising pricing is the lowest in the hierarchy of ad pricing.

Radio One has completed 11 years. What difference do you see in the industry?

In these 11 years, social media engagement coupled with our international format play has created a formidable tribal connect and we are the only ones who simulcast our international FM stations online. We are also using social media to measure our audience brand consumption preferences using our ‘International Indian Monitor’ audience tracker.

What are the challenges the medium is facing with the advent of online song streaming services like Saavn, Gaana and Spotify?

Their listenership is miniscule. None of the streaming services are profitable worldwide. Sustaining a widespread internet streaming service requires a lot of capital and there is no revenue model. FM radio is not threatened by that as FM radio is hyper local and advertisers do not prefer online streaming services due to miniscule subscribers.

What do you think are the major trends that will shape the future of the radio industry in India?

The government needs to allow reduction in the annual licence fee. Prasar Bharti needs to bring down rental pricing to market levels from the current ad hoc pricing to allow radio stations margins to increase. M&A rules need to be simple and allow growth in value for shareholders.

With digital changing the content consumption behaviour, how is radio preparing to maintain its essence?

Radio is the only live, local, mobile and free medium as therefore is not challenged. The content on radio is superlative and can easily use the internet to reach more people. Digital/online just allow added access. Digital by itself means nothing per say unless the content is great. All the international/Indian digital content ‘visual’ offerings are seeing rising content costs and subscriptions are not growing unless price is dropped. It will be very difficult for them to sustain. I see existing media companies using digital only as a means to increase their reach and we are already doing that with www.1cast.in. Other radio stations will soon follow suit.

The way brands are latching on to digital for their content needs, do you see radio has better and more affordable solutions to offer in order to attract them?

Again, radio is live, local, mobile and free. And no medium so far checks all these four boxes. FM radio can easily use the internet to increase geographical reach. The speed at which radio content and advertiser satisfaction is created at the lowest cost is unchallenged by any other media. I believe we are content houses and we know our listeners. We will find new ways to reach this content to them as the opportunities arise.

Info@BestMediaInfo.com

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