First the good news - 2008 has been a fruitful year for the radio industry, with the medium witnessing nearly 50 per cent growth in revenues. Plagued by the economic slowdown, the radio industry, which is still in its infancy, has a bigger challenge ahead. Head honchos of radio stations gathered at the India Radio Forum to talk it out.
Growth points to smaller towns
Harrish Bhatia, COO, My FM, which has a strong regional presence and belongs to the Bhaskar Group, explained the importance of being local in a difficult market scenario. While 30-35 per cent revenues for My FM came from national advertisers, a majority was reaped from local advertisers. "Retail advertising has helped us a lot since that's a sector which is not as much affected as the corporate players," he said.
Besides, he added that advertisers in regional markets are much more loyal. "The industry retention rate is only 15 per cent overall," he exclaimed, emphasising the need to get new advertisers on board as also to continue the association for long.
Mass or niche?
George M George, executive director, Chennai Live was the only one on the panel representing a niche station. "The one advantage we have is that we are a single station and carry any baggage which gives us the freedom to experiment," he said. Chennai Live is the talk radio station launched by the Muthoot Group. "Radio needs to re-invent and connect with the city it is in. With Chennai Live, we are doing just that by connecting with people in Chennai, talking and discussing issues and imparting information," he added.
He said that intelligent talk leads to intelligent radio and that is the future. Apurva Purohit, chief executive officer, Radio City, said that radio stations need to go the print way with local editions - split the feed so as to appeal to regions within the geographical area. However, music royalty and license fees are huge cost bearing expenses and the regulatory practices aren't conducive.
To define what it stands for is important to get a respectable place in the media plan of an advertiser. For this, AROI (Association of Radio Operators of India) is constantly educating the trade about the effectiveness of the medium through campaigns.
However, it was a pleasant surprise to not hear radio head honchos complain about the lack of creativity in radio ads and the trend of replicating a TV ad onto radio seems to have passed. Prashant Panday, chief executive officer, Radio Mirchi, said, "There are no more Sholay spoofs and direct lifts from TV ads. Large brands are making separate radio creatives," he stated. Although it hasn't reached the threshold of TV, he said that radio advertising was becoming far more creative than print.
The general consensus was that by etching a clearer perspective on the efficiency of the radio medium in the minds of the advertisers, better regulation to facilitate niche radio and sharper regional focus, coupled with cost rationalisation, radio will emerge as the medium of choice in the near future.