"Mirchi's digital reach is already bigger than its radio reach": Prashant Panday

Well, the new avatar is nothing but a reconciliation of the brand, with the reality of the transformed business of Mirchi. The business has already grown beyond radio. Even the brand’s reach has grown beyond radio. Its digital reach is already bigger than its radio reach. But because we have not done anything to overtly communicate this new reality, most people still know it as a radio brand. In the so-called new avatar, Mirchi will be a broader entertainment brand, not limited to radio. It will offer content in video form on YouTube and various video OTT platforms. It will offer live entertainment in the form of events, concerts, and TV shows. It will be heard as podcasts and over smart speakers. It will be available on all platforms including transit platforms like radio cabs and airlines, and in newspapers and magazines.

The business has already transformed so much that the contribution of the radio business is only two-thirds to the total revenues. The rest one-third is made up of what we call “Solutions” but was earlier simply called “non-radio”. Not only has the revenue composition of the company changed so dramatically, so has its reach across its various products. While its FM reach is some 40 million people weekly (and an estimated 55 million people monthly), its video reach is already an estimated 60 million people. This is a reality that few people knew. The current exercise of re-branding was in a way, long overdue.

For the listeners of Mirchi, it means that they can continue to expect innovations on radio the same way as they have been in the past. Additionally, they can now also expect the same level of innovation in media other than radio, broadly clubbed under Digital and Live. Our Chairman, Mr. Vineet Jain, had said this when Radio Mirchi was launched 19 years ago “When you’ve tasted Mirchi, everything else will seem bland”. The same promise will now be extended across the whole Mirchi world, not just radio!

The lockdown has badly hit many businesses, including media businesses. Radio, like print, Out of Home, and TV businesses, has suffered a huge loss of advertising revenues because our clients have seen their business getting hit by the pandemic. Radio degrew by nearly 80 per cent in Q1 of FY21 and some 60 per cent in Q2. Mirchi degrew by 72 per cent in Q1 and 57 per cent in Q2. But on the other hand, consumption of radio increased strongly during the lockdown. Research conducted by AROI, the radio association, has shown that radio listenership went up by 25 per cent during the early days of the lockdown.

I think the business will recover in FY22. To be sure, media recovery will be a quarter behind the recovery of the real economy, which is currently expected in Q4, FY21. To also be sure, the recovery is certain. Radio is a powerful medium, and its clients have got huge value by advertising on it.

This used to be a common perception 15 years ago that radio listenership is only during transit, but at that time, the reality was actually very different! In those days, radio was heard mostly at home! Today, reality has changed significantly. Today, nearly 40 million people listen to the radio in cars. This number was just a few million a few years back. So today, the perception that radio is heard a lot in cars is indeed a fair one!

Car listenership tanked in April and May when cars and other modes of transport were shut. But since June, cars are back and so is radio listenership in cars. Work from home is a reality for a certain bunch of salaried people. For the bulk of the rest, it is back to working from offices.

The future for car listenership is strong. With more cars being sold, and with more traffic jams, radio listenership in cars will only go up. And these listeners are urban, rich, and they spend long hours listening to the medium. This shows that the future of radio is bright. I also believe that the enhanced listenership at home which happened during April-May will sustain to a large extent. That is why I expect overall listenership to rise in the coming months.

Earlier, we used to be worried about music OTTs. At that time, we were worried that they would eat into our listenership, and then our advertising revenues. Several years later, today, we have no worries. Music OTTs are indeed growing in listenership, and they will indeed expand further. But the usage of music OTTs is different from the usage of radio. FM radio is becoming more and more of a car/youth medium. Despite digital radios being available for more than a decade inside cars, the car and the youth, remain strongholds for FM radio. The youth love radio because it helps them discover new music. They love the presenters; they love the non-music content and they love the curated music. None of this is available on music OTTs. Music OTTs are only about algorithm-driven playlists, but everyone knows the limitations of algorithms choosing music! Further, radio has evolved into so much more than music. Today, radio stations play music for only 25-30 minutes in an hour. It’s the rest that the youth love. Equally, the car audiences love radio because its easy to use, the choice of music perks up the mood of the car drivers, and radio helps them stay connected with the world. Today, we are confident that music OTTs and FM radio are both going to thrive. Advertisers will continue to spend on radio, even as they add spends on music OTTs.

Yes, this is true. In metros (trains) and buses, people who were earlier listening to the radio are now often seen watching videos. Cheap data and smartphones make this possible. This presents a threat and an opportunity to Mirchi. A threat because it could take away a certain set of listeners. Opportunity, because the strong brand that Mirchi is, allows it to tap into this changing consumer habit through videos. The Mirchi strategy is built on this - As people consume more videos, they will turn to those who can provide them content that they like. In the language that they like. And in a cultural context that they can relate to. We believe we are well placed to tackle these needs of the people. We have great talent that works for us, and our specialty is that we make content in 15 different languages catering to the unique cultures of 63 different cities. We are actually super excited by the growth opportunity that this presents.

Yes, this is a challenge. And that is why it is important that FM radio stations should be allowed to stream on digital platforms. This will happen at some time in the future for sure. It is a temporary challenge, but not a long term one.

Really? FY21 is a wash-out. We expect degrowth to be nearly 35-40% over the previous year. But there is no point in moping about this. FY21 is irrelevant. Our view is that FY22 will be a recovery year. Radio will hopefully grow back to FY20 levels. And from then on, it should continue to grow. I think the strength of the Indian economy is in its services sector, especially the retail sector. This is expected to continue to grow in the future. Radio will also continue to grow.

It is only because of the wrong government policies. Just think about it. In NY or Singapore or even Colombo, there are 25-40 radio stations available. In much bigger Mumbai and Delhi, there are only 9. Obviously, the growth of the medium gets stunted by such limitations. TRAI has suggested twice that the number of radio stations can be increased by reducing the “channel separation” between adjoining FM stations. But the Government (both UPA and NDA) have simply not acted on this.

Further, even if they were to make more spectrum available now, the auction rules of the Government make it highly unlikely that anyone will bid for those licenses. The reserve fees are so high that it makes no sense to bid at all. This is why Batch-2 auctions failed so miserably. The Government is responsible for radio not achieving its full potential. If there were 25 stations in big cities in India, imagine how much content variety would be possible? With that would come larger audiences, and more advertising dollars. Why is it that in big cities like Delhi and Mumbai, there is only one English channel available? In Mumbai, there is not a single Marathi station, even though 50 per cent of Mumbai has Marathi as its mother tongue. The Government can still make amends. It can release more spectrum and change its auction rules. If it does that, radio will achieve a far higher share of the ad pie.

The challenges for radio are more than the challenges for TV and digital. TV has become a mainstay of advertisers and so it will rebound quickly. Digital is great for its targetability and its ability to facilitate transactions. Radio will also grow, but it will have to wait for the retail sectors to revive. Nearly 50 per cent of radio’s revenues come from retail. Revival maybe slightly delayed but it is certain.