Nandan Srinath, executive president, on Mirchi's transformation from a radio company to now launching its own app on the lines of Spotify and Audible.
Had The Buggles’ Video Killed The Radio Star been released in 2020-21 instead of 1979, the song’s chorus would have held the COVID-induced lockdown(s), and not its video, responsible for the demise, no near demise, of radio.
The radio industry, in the first two months of FY21, witnessed an estimated loss of over Rs 200 crore - a figure estimated to top Rs 600 crore by September, as per a May 2020 Live Mint report. Radio managed to barely survive and like the laws of nature, it had to adapt to survive in this new normal.
For Radio Mirchi, it meant transforming itself into something more than a leading radio company. Entertainment Network India (ENIL), its parent company, posted Rs 228.45 crore in revenues in 2020-21, as compared to Rs 553.36 crore in 2019-20.
The chapters of transformation
One of the most notable actions Radio Mirchi took was to drop Radio from its name in December 2020. Sirf Radio nahin, har entertainment mein Mirchi hai, said the company after this overhaul.
The company now opens the second chapter of its makeover – Mirchi Plus, an app that lets you listen to audio stories, curated music playlists, read stories and watch videos.
Nandan Srinath, executive president, ENIL, says that from a consumer standpoint, Mirchi wasn’t just a radio company. It was available on the ground, with a battery of events, and television, with marquee properties like Mirchi Music Awards. Now, there is the app.
He also states, keeping the advertisers in mind, “We were not just a radio inventory. A third of our business revenue had started to come out from activations, ground events, social media and YouTube.”
The real drivers: falling ad rates and the rise of FCT revenue
The EY-FICCI March 2022 report on India’s media and entertainment sector stated radio ad rates fell 13% (average) and that interviews with radio companies indicated non-free commercial time (FCT) revenues contributed 15% (average) of the total revenues. (Non-FCT revenue is money one earns from alternative business offerings like content production, events, activations, etc.)
“No,” states Srinath. He reveals when Mirchi dropped Radio from its name, “66% of our revenue was core radio, 22% was from solutions and 11% came from digital content sales.”
“Our goal post is that over the next two years, the numbers will become 25% digital, 25% solutions, and 50% radio.”
Who is the app for?
The Mirchi Plus app, Srinath says, is targeted toward the younger generation, “who are always on their mobile phone.” You can download the app on Apple and Android ecosystems. It will also extend to Android Auto and Apple Carplay.
While people like you and me are consumers of Mirchi, the company also counts brands and advertising/marketing agencies as its clients. The app now lets the company offer “measurable digital inventory backed by data” to these clients, along with local radio inventory, events and other services.
The curse of too many apps
One of the modern day curses for a smartphone owner, is the number of apps he or she has on the device. This often leads to brands struggling to get a decent number of downloads. However, Mirchi is not too worried about this issue.
Why? Because it knows the Mirchi Plus app is not mission-critical. “If we get used, say, eight, 10, 12 times a month by an average user, that is fantastic,” Srinath mentions.
Mirchi won’t spend a dime on distribution and will depend solely on the power of its content. “You sample a few episodes. Want more? Download the app? Want even more? Register and you may get a limited number of episodes so that you keep coming back to the app. These are the ways to improve engagement,” explains Srinath.
You can expect actors like Nawazuddin Siddiqui, Neena Gupta and Ashutosh Rana to narrate audio stories, which will range from comedy and horror to drama to thriller. All of Mirchi’s original audio and video content finds a place on the app, and audiobooks will soon be available as well.
Mirchi is also bringing its deep connection to India’s pop culture, to the app. “We will tell you what's happening in the film industry and a celeb's life, which music to listen to. Our connection to pop culture is very strong… We are publishing all this news only in English, but in a while, the app will be in available 10 languages and we may go to 11, 12, 13,” adds Srinath.
Mirchi is available in 63 cities across India and a few places overseas, “Today, I am townless. My app is available in Canada and very soon, it will be available in parts of Europe and Africa.”
A Mirchi Plus app without radio
A puzzling aspect of the Mirchi Plus app is the lack of radio. Srinath points to the common struggle the JioSaavans and the Gaanas of the world face: music royalty.
He also points to the issue of FM tuners that are found inside phones. “It is available on most devices, but because of battery and commercial issues, manufacturers have switched that button off. Most hardware in India does not carry FM tuners.”
The app, however, has a music tab. “We are great at curating music,” remarks Srinath. Radio brands knows when you have heard a kind of song and make sure there are no similar songs back to back, there will be an ebb in the flow of music you listen to… “That's why most music stations across the globe run with 250 songs at a time.”
The risk of cannibalisation
Mirchi is available on the Gaana app too in the form of playlists. Doesn’t it risk cannibalisation of users? Srinath disagrees, “Mirchi is so small, Gaana has hundreds of millions and so is Spotify…”
Mirchi will keep this self-deprecation on for a while. It will not be doing a splashy launch. There will just be a digitally-supported launch.
“A full-blown radio and digital marketing launch should be sufficient for us to start getting some attention,” mentions Srinath. He also states there are no massive customer acquisition targets and they are “not paying for it, in any case, which is standard when there's venture money and rush to go to your first million, two million downloads.”
The monetisation conundrum
Monetisation remains a challenge in India for many digital entertainment brands. Netflix, for instance, has famously struggled to break into the Indian market. Srinath says that right now, the content will drive the app.
This does not mean Mirchi Plus is a passion project. “We are a content creation company, with offerings like radio, ground events, social and digital and Mirchi also has RJs, the original influencers,” states Srinath.
He says the app can deliver a video message on its video tab or an audio message on the audio or a static banner on the reading tab. “I now know how many women (17-24 age bracket) Mirchi Plus reached yesterday. We don't service the top 200 advertisers of the country. We service the 2,000th, 4,000th advertiser.”