India's radio industry, which was already going through a turbulent phase, has been nearly decimated in terms of revenue by the Covid-19 pandemic and the resultant lockdown.
The industry captains say the so-called relief from the government (moratorium in payment of annual licence fees) is inadequate and the medium, especially the smaller players, may crumble in the coming months.
According to Nisha Narayanan, Director and COO, Red FM and Magic FM, revenues coming in are negligible and she does not see a revival until the year ends. “This is not business as usual. Even if the lockdown opens, I think it will take quite a long time for the industry to sort of pick up. I don't see it really happening before the year-end because currently the revenues are quite negligible and also because the Government advertising is not there,” she said.
According to AdEx report, advertising on radio fell by 82% between March and May 2020. The industry was already dealing with reduced Government ads, one of the biggest contributors to radio.
“Forecasting in such circumstances is difficult. In general, businesses across sectors have already seen a sharp decline in revenues and business prospect this year, right from Q1 to Q3, will be low," said Ashit Kukian, CEO, Radio City.
The lockdown also hit the MSMEs, which are big contributors to radio advertising, hard. According to M V Shreyams Kumar, Managing Director, Mathrubhumi Printing & Publishing, which also operates Club FM in Kerala, “Radio ad revenue has suffered significantly amid the global pandemic; major advertising revenue sectors such as MSMEs (micro, small and medium enterprises), real estate, hospitality and retail sectors have been hit hard."
Green shoots visible, things may get better by Q4
According to Abraham Thomas, CEO, RBNL (Big FM), apart from the four big cities such as Mumbai, Delhi, Chennai and Ahmedabad, advertising is on its way to recovery in other smaller cities and towns. “The first two months of lockdown did see a steep decline with respect to the cut in ad spends by advertisers, including the government. However, we are already on a path of recovery,” he said.
“The first category getting active is the banking and finance sector. With safety and assurance coming to the fore, categories like insurance are taking up multiple opportunities to drive their message with the live yet safe content that we are continuously creating. This is closely followed by the FMCG sector, which is seeing huge opportunities in personal hygiene, sanitisers, soaps, ready-to-cook products, branded commodities as defined with the requirements of the pandemic. Health care, pharma and ayurvedic products also have seen increased demand.” Thomas said radio is seeing a lot of activity in the FMCG space due to an increased number of new launches.
"We can expect to see a change in the scenario from Q4 of this financial year and hope the GDP inching towards the 3-4% mark. The radio industry’s wide reach, our dual USP of providing entertainment and awareness to our listeners, and our inherent ability to localise content for them will ensure we come out of the woods the fastest,” said Ashit Kukian, CEO, Radio City.
"We have experienced a significant rise in listenership across our FM stations. Since most platforms struggle with no new content production during the lockdown time, the only medium where we could find original content is radio, giving the medium an edge above the rest,” said Shreyams Kumar.
Radio platforms explore newer avenues through digital
Radio channels have been experimenting and entering newer avenues to cope with the low ad spends. Rahul Namjoshi, COO, My FM, said, "On-air advertising was hit quite significantly since the last one quarter but we are in the process of closing some good deals for the coming months. The dry phase was balanced by some unique digital initiatives carried out for our clients. Still, on-air is our bread and butter and we are again lacing up our boots for the coming months.”
Many radio channels are partnering with OTT music streaming apps to make their content available on these platforms. Discussing the trend, Namjoshi said, “I don’t think these are new models as these strategic tie-ups were already happening since the last couple of years. What we are exploring are newer ways to expand our horizons collectively. OTT will play a crucial role in achieving this.”
Thomas said radio and audio streaming platforms complement each other and the opportunities for distribution of audio content to global audiences are immense and need to be tapped at the earliest. “At Big FM, we wanted to leverage our powerful IPs that we have built over the years and, hence, we recently collaborated with the audio streaming platform, Spotify, for a content partnership that makes some of Big FM’s most loved shows and marquee properties available for their global audience.”
According to Narayanan, radio needs to compromise on the pure advertising-driven model. She said radio needs to look at long-term partnerships with other brands. “We have to compromise on the ad-driven model. I think it will be a more innovation-based and a content-driven model. That is where business will grow,” she said.
Kukian said they are focusing on the digital side of their offerings and extensively used social media to entertain people through digital concerts and live chats with celebrities. “This helped us generate a stupendous 280% growth of our social media reach numbers. In essence, there is a need for companies to offer great multimedia propositions for their audience. Partnerships with digital and OTT platforms, including audio OTT players, are nothing but a way to create a new revenue stream to distribute our content,” he said.