is seen as a move to consolidate, Radio Mirchi has decided to hike its ad rates by 15-20 per cent from September 15. Due to intense competition and the entry of new players, Radio Mirchi has been avoiding the move for the past two years. However, with its stations breaking even, the radio operator has decided to cash in.
The timing is significant as with the approaching festive season, a significant boost in earnings is expected. Kaushik Ghosh, national sales head, Radio Mirchi, tells afaqs!, "The four month period of September - December represents heightened retail sales across categories due to festivals and the marriage season."
Prashant Pandey, chief executive officer, Entertainment Network India Ltd, says, "Increase in local advertisements is expected, which will further enhance our earnings."
Commenting on the rise in ad rates, Nandan Srinath, chief operating officer, Radio Mirchi, says, "Our new prices are in line with increased deliveries in terms of reach and engagement. With radio being considered as an established medium, we have decided to affect a slight increase in prices."
Srinath adds, "The new prices reflect the true value of our airtime. We have kept prices constant for the last two years to ensure that the medium gets established."
When asked if the increase in ad rates will discourage advertisers, Srinath informs afaqs! that in terms of compound annual growth rate, the increase in price is really small.
Ghosh adds, "In spite of the price increase, Radio Mirchi will continue to be the most attractive medium in terms of cost of reach - especially compared to local media such as print and outdoor. Print has already increased ad rates and newspapers are thinner."
He explains, "A two-week threshold campaign in print for any of the six metros would cost Rs 50-100 lakh at current prices. A threshold outdoor campaign for two weeks in any of the six metros cost Rs 40-75 lakh. It continues to amaze us how so much money is poured into outdoor. In comparison, a threshold radio campaign on Radio Mirchi for two weeks in any of the six metros will cost only Rs 9-12 lakh."
Radio Mirchi is India's largest radio network by revenue and operates 32 stations and 10 affiliate stations. Radio Mirchi is the only network to have stations in all the 15 two million plus towns in India. Radio Mirchi is also India's first and only pure play listed radio network and is currently valued at Rs 1,000 crore.