A year after India's radio industry saw its overall revenue shrinking by more than 50%, the key players are hoping for a partial recovery in 2021 as the listenership gets back on track and brands open up their purse strings.
Advertising volumes for the medium are getting back to pre-Covid levels in some markets, whereas in others it is still a work in progress. The last year was highly stressed for the medium when the players even wrote to the government to seek support.
According to Preeti Nihalani, Chief Revenue Office, Mirchi, while the recovery cannot be overnight, the volumes have returned to pre-Covid levels in many regional markets. “The news is not all that bad for the industry; the volumes have already returned to the pre-Covid levels for two consecutive quarters now. In fact, they have surpassed pre-Covid levels in many regional markets. This has subsequently peaked advertisers’ interests with consumers in tier 2 and tier 3.”
“During the peak of the pandemic, many of us had thrown in value ads to help get many retail businesses to get back on their feet. This not only helped us get them back on radio during a tough year but also brought down our pricing/10 sec. Now that the volumes are back, it’s only a matter of time for the pricing to return to pre-Covid levels as well. It certainly will not be an overnight resumption, but a recovery on pricing has already begun and it will further strengthen closer to the festive period,” she added.
Nisha Narayanan, Director and COO, Red FM and Magic FM, said, “Most of us in radio did good business in Q4. It improved month on month in H2 of the year and in some of our cities, we did 5-15% above our Q4 of 2019-20, a sign that gives us confidence that there is sunshine after the year that we all want to forget. We are striving to reach the 2019 levels by the end of the FY 22.”
"Radio with its mass local reach and power to influence has shown significant growth. Q1 of 2021, especially March 2021, has started off well with an over 20% growth in volumes as compared to March 2020, beating the earlier estimates. With the growth in regional and local advertising of both national and local clients, the emerging markets are driving the growth in radio adex. Overall, the radio solutions business is showing a lot of traction and coupled with the monetization opportunities in digital audio, online concerts, podcasts, smart speaker solutions, influencer marketing and brand advocacy, we are cautiously optimistic of beating the earlier estimates of the industry’s recovery. Additionally, cricket entertainment on radio is a favourite with brands that don’t have large enough budgets to get noticed on television as well as those wanting to amplify their association with the format," said Abraham Thomas, CEO, RBNL (Big FM).
The second wave threatening recovery?
Speaking about the current surge in cases in the country, Nihalani said, “We are very optimistic about radio advertising coming back to normalcy much sooner. However, we are also well aware of the spread of the second wave and the many retail businesses that are hit directly by the lockdowns, etc. Radio has 40% of its dependency on retail advertising, and that segment will remain vulnerable till the pandemic settles down completely. To safeguard ourselves against this, we have worked towards protecting our core business of radio through active investment in technology solutions that make the sales cycle much more efficient. We have partnered with platforms to get new advertisers on board, and we leverage our radio resources beyond radio. Mirchi RJs are encouraged to build their social media profile in addition to excelling on radio.”
“Our RJs together have more than 20 million followers across social media. We package this wide social media reach into the solutions we design for our advertisers and make a constant investment in our creative capabilities to make better solutions for our clients. All this has ensured we maintained a strong leadership position both in listenership and in revenue over other 30+ broadcasters,” she said.
She said that 33% of the revenues are coming from streams beyond traditional radio. “We provide broadly three kinds of solutions to clients. The first is Bespoke Multimedia Solutions. Brands have specific marketing problems, and we go to them with a solution that entails a 360-degree multi-media approach. The second vertical is Impact Solutions, where we build properties that are again multi-media and clients leverage them to engage with their consumers. We have over 300 properties that we curate across the country. Some of the better known are Mirchi Music Awards, Mirchi Cover Star, Mirchi Spell bee, Mirchi Neon Run, and so on. The third and the most exciting one is Digital Content Solutions. We now reach an estimated 60 million digital audiences a month across YouTube, Gaana, and social media. We create digital content solutions and help brands disseminate this content on our and third-party platforms/assets to get optimal reach and engagement.”
Speaking about their strategy to accelerate the recovery, Narayanan said, “We are already in the stage of transforming our pitches from only for radio FCT advertising to a 360-degree approach of solutions to our patrons with emphasis on giving them a bouquet of audio video (digital) and experiential communication services. Offering content integrated solutions both on-air and on digital, which will provide brands with a greater association and listeners attention.”
Asked if the election season has given a boost to the medium, Nihalani said while all political parties are leveraging radio very aggressively in all these states, government spends are still nowhere.
Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, said the industry suffered largely due to the absence of retail advertising. He said it could take more than two years for the radio industry to recover.