We aim to align commercial rates with or surpass DAVP rates following rate revision: Nisha Narayanan

2023 proved to be a significantly important year for the radio industry as the government revised its ad rates for private FM radio stations after seven years.

Nisha Narayanan, COO and Director of Red FM and Magic FM considers the DAVP rate revision a positive development for the whole industry but also highlights that the new challenge would be to raise the commercial rates to meet or exceed DAVP rates.

“It's imperative that commercial rates do not fall below DAVP rates. Efforts are currently underway to align commercial rates with or surpass DAVP rates following the rate revision,” she added.

She told BestMediaInfo.com that Red FM is encouraging both central and state governments to consider radio as a valuable advertising and impact medium.

She stated that ahead of the general elections in 2024, radio will be utilised very effectively by not just political parties but also by brands during the poll season to reach out far and wide.

“The industry is also hopeful that government advertising will increase during the upcoming general elections,” Narayanan added.

TRAI recommendations for the radio industry to create a level playing field

The relief for the radio industry is not just limited to DAVP rate revision. Earlier in September 2023, TRAI recommended a series of reforms for the FM radio sector to MIB, including the removal of an avoidable clause on annual licence fees, enabling private FM radio players to create news and current affairs programmes, and making it mandatory for mobile handset companies to offer in-built FM radio.

Narayanan said that the industry is actively advocating for the implementation of TRAI recommendations as it would bring radio closer to being on a level playing field with other industries.

However, she said, “Though these recommendations are good enough, our primary concern revolves around considerations such as the inclusion of GST and the preference for independent news over sourcing news solely from All India Radio. While implementing clear guidelines and regulations through a broadcast regulator is feasible, opting for news independence would promote a more equitable playing field. Despite this concern, we believe that the adoption of the TRAI recommendations would allow the radio industry to breathe.”

From a business standpoint, the radio industry is still struggling with the issue of increasing advertising rates. As a result, there has been a significant surge in the volume of ads. The fact remains that listeners do not want to listen to too many ads while consuming content on the radio.

"We have long awaited the translation of these recommendations, and this proposal offers hope. This might open gates for newer players to join the league and make the industry more competitive," Narayanan said.

She emphasised that TRAI has responded positively to the industry's proposal, but it is equally important for the Ministry of Information and Broadcasting to embrace these recommendations and move forward with their implementation.

Challenges for the radio industry

Narayanan highlighted certain challenges that the radio industry faces today, saying that the pricing dynamics, particularly on the corporate side, are a significant area of concern. Despite delivering substantial value, radio often receives comparatively lower compensation.

“The unique one-on-one connection offered by radio makes it an exceptional medium for effective communication. With the recommendations from the TRAI, there is optimism for a level playing field for the radio industry, addressing concerns related to pricing and overall competitiveness,” Narayanan said.

In the current scenario, concerns include challenges with music royalty, GST, and other charges, especially when compared to OTT and other media. Resolving these issues is crucial for creating a fair and equitable operating environment for the radio sector, she added.

Red FM sees huge growth potential coming from non-metros

Over the past two years, Red FM has experienced significant growth, with a substantial portion stemming from non-metro markets, marking a notable shift.

“While we have made considerable progress from our previous standing, we are yet to reach the pre-covid levels. Nevertheless, the contributions from smaller towns have played a pivotal role in advancing our growth,” Narayanan said.

However, Narayanan noted that well-established markets like Delhi and Mumbai are still undergoing improvement, with advertising rates not yet reaching previous levels. She emphasised that despite these challenges, the overall performance remains positive, with larger markets currently employing discounting strategies.

Fostering culture - An integral content strategy for Red FM

Narayanan also spoke about Red FM’s vision, saying that it is genuinely leading the way in integrating regional and cultural diversity into the mainstream and celebrating it.

“We are actively fostering communities through the organisation of various festivals. Whether it's uniting bikers, enthusiasts of folk music, fans of South Indian music, or those passionate about Rabindra Sangeet, we are dedicated to building vibrant communities. Stay tuned for the unveiling of new IPs that will further highlight regional diversity, offering you a glimpse into the exciting developments on the horizon,” she said.

“Our constant endeavour has been to bring about a meaningful impact in all that we do, driven by a clear sense of purpose. The intention is to be change-makers, not necessarily in the realm of activism but rather in appreciating and celebrating what we already possess," she added.

She also said that another key aspect of Red FM’s focus has been the celebration of culture. The radio station places a strong emphasis on regional ethos and presence, not confining it merely to geographical boundaries but extending it to metropolitan markets.

"We believe that regional representation should transcend its traditional confines and be showcased in metro areas. Whether it's our initiatives like Dugga Dugga in Bengal, South Side Story featuring South Indian artists in Delhi, Kashmiri festival Reclaim the Saaz, or the Yellow Taxi music project celebrating folk music, these endeavours embody our commitment to cultural celebration," Narayanan added.

Red FM's upcoming plans in terms of growth, engagement, and market presence

Narayanan pointed out that advertisers are increasingly turning to radio as their primary choice, even when seeking impact and last-mile reach. Overall, this trend has been highly encouraging, she added.

She further emphasised that, from a strategic standpoint, Red FM’s focus has been on creating new business categories. Beyond their regular offerings, the radio channel has successfully established independent music as a distinct category.

“This initiative serves a dual purpose for us. On one hand, it significantly contributes to brand building, and on the other, we genuinely believe in embracing diverse forms of music, underscoring our commitment to the power of independent music. This approach not only enhances our brand but also generates a substantial revenue stream through a robust independent music strategy,” she said.

“Another robust category for us is the digital space and influencer marketing. Additionally, defence has emerged as a key category for us. We are hoping to build sports as a category going forward. So, these are different verticals that we are building in, and that has been helpful in terms of the amount of incremental revenue that is coming into the system. Moreover, we do hope to offer our creative services to the MSME category,” she added.

Narayanan highlighted that their primary focus has consistently been on innovation. “We are committed to engaging in interesting and unique initiatives. A recent example is the Quiz India movement during the Cricket World Cup, which marked a significant milestone. It was the first time we integrated an app and radio to conduct a live quiz nationally. The response to the Quiz India movement was exceptionally positive, and we were thrilled by its success. Innovation is ingrained in the DNA of Red FM, and it continues to be a driving force for us,” she said.

Info@BestMediaInfo.com