FM Radio industry is likely to fully bounce back by the end of the current fiscal year, said Nandan Srinath, Executive President, Entertainment Network India, the parent company of Mirchi.
Srinath said that though the listenership and ad inventory volume have touched the pre-covid level, the ad rates will likely take two more quarters to be back on track.
In terms of advertisers who are coming back to the medium, Srinath said that not only a lot of traditional categories but new age tech driven apps are also bullish on the medium.
“A lot of new age brands can utilise radio for education purposes. In my conversations with either agency partners or clients, I don't see any apprehension among brands to come on radio,” he said.
Mirchi is completing 20 years in the business. When asked how the next decade would look for the FM radio broadcaster, Srinath said, “Radio business is not going away. And we have great faith that radio will be a strong support medium over the next 10 years. It used to be a great support for television and print. Today it supports digital. The local depth, nuance that you can get from radio is very hard to surpass. We are bullish on the future of the radio business.”
Talking about how FM radio will continue to stay relevant in the age of music streaming apps, Srinath said, “There are too many audio streaming services. So how do you stay relevant in the advertising ecosystem? This is the part of the journey that is yet to unfold- it is only the first year of that.”
“For the end listener the mode is irrelevant be it digital or traditional FM. What matters is at what point one can build a significant volume of audiences and have significant information about them and market it back to advertisers,” he added.
“All of the streaming services put together may add about Rs 100-110 crores of revenue in terms of advertising. The radio industry even in the slump is about Rs 1400 crore. So I think there's a bit of a distance to be travelled by the streaming services in terms of ad revenue,” he said.
Srinath said that radio streaming can also go digital in the future, which will be like linear TV where you don’t get the option to download or forward and repeat. “The cost of royalty is the stumbling block here. The radio industry would love to offer digital streaming. But the cost of royalty is exorbitant right now. The radio streaming on digital devices is a very strong use case especially outside India,” he said.
He shared that the royalty regime in markets like the US are far more regulated, safe and transparent.
“We have our stations in New Jersey, San Francisco, Qatar and Bahrain. And we have our brand operating through a licence model in Dubai. The brand is available in five cities in the US and Middle East and we are looking for more opportunities in North America, Australia, Africa and parts of Europe, essentially wherever the Indian diaspora is strong. If we find the right economic model, we will launch terrestrial FM stations. We are already experimenting delivering with purely online stations, starting with the USA. We now have Telugu radio stations that we have developed exclusively for the US market,” he added.
Sharing how the company is doing in terms of digital business, he said Mirchi’s digital revenues, earned through content creation, are around 10-12% of the overall revenues.
“Our RJs are popular personalities. So a lot of our clients tend to work with them. We see the digital contribution number growing to a quarter of our revenues over the next two or three years and that will be a mixture of many things- content marketing, influencer marketing and our own app ecosystem which will be ad supported. It will also include some digital subscriptions and digital commerce,” he said.
Mirchi aims to attain 50 million active users on its web and app portals in the next three years.
In terms of branded content, it has done shows like Dabur Amla Aloe Vera- What Women Want, whose fourth season will be launched on YouTube soon.
Apart from being present on Gaana for three years, with 18 distinct radio channels (which are not live radio stations), Mirchi has recently closed a deal with Spotify too.