Prashant Panday, CEO, ENIL

The radio industry needs to ask itself the question as to why the listenership has declined. My point is that if you want to increase listenership in radio, you will have to increase the number of FM stations in the city. In our country, we need to create supply, because when you create supply, you also create demand as we are a starved economy. Hence, when you launch 20 more channels in Mumbai, then you will see that the 70 lakh reach that we see in Mumbai will go up to 150 lakh, but if you have only six private operators, from 70 lakh it will come down to 60 lakh. Therefore, I am not surprised at the decline in listenership. The industry should not appear worried about the decline in listenership. The fact is that we have to get our priorities right.

Prashant Panday has been with Radio Mirchi right from its inception. He has several achievements to his credits, including the rollout of Phase II radio stations of the company. He has lead managed managers from different backgrounds to make Radio Mirchi India’s biggest radio company and the most popular FM radio brand. Panday also looks after 360 degrees – the event management arm of ENIL.

He holds a Bachelors Degree in Electronics and Communications Engineering from Gujarat University and a Post Graduate Diploma in Management from the Indian Institute of Management, Bangalore. Prior to joining Radio Mirchi, he was Director (Marketing) for Modi Revlon Ltd. Prior to that, he had worked with Hindustan Unilever Ltd, Frito Lay India, Mudra Communications and Citibank NA. He has 20 years of experience in sales, marketing and advertising industries and has also held other senior positions.

Robin Thomas

Q. First of all, with the second edition of Mirchi Music Awards concluded, were you able to meet your objectives? What are the changes you plan to bring in the third edition?

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We have met our objectives completely. For us, the Mirchi Music Awards is a journey that had begun only last year and this was only the second step in that journey. The ultimate vision of Mirchi Music Awards was much bigger than what it currently is, as we want to have all the categories of music recognised. We want to have all languages recognized, in fact, this time we have added a non-film category, we also added a new award – the KL Saigal Sangeet Shehnshah Award, which is to recognise the contribution of the people who don’t need recognition. For us, the biggest satisfaction has been that the entire industry has been participating in this entire process and we have been extremely transparent in our dealing with the industry. The second edition of Mirchi Music Awards was a much bigger event than last year, and going forward, we want to keep adding music genres. This apart, we may also look at modifying the format going forward.

Q. Have the IRS 2009 R2 results on radio come as a surprise for Mirchi in terms of decline in listenership?

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The fact that it has declined is true. The radio industry needs to ask itself the question as to why the listenership has declined. My point is that if you want to increase listenership in radio, you will have to increase the number of FM stations in the city. In our country, we need to create supply, because when you create supply, you also create demand as we are a starved economy. Hence, when you launch 20 more channels in Mumbai, then you will see that the 70 lakh reach that we see in Mumbai will go up to 150 lakh, but if you have only six private operators, from 70 lakh it will come down to 60 lakh. Therefore, I am not surprised at the decline in listenership. The industry should not appear worried about the decline in listenership. The fact is that we have to get our priorities right.

We have to announce Phase IV as soon as Phase III is announced. Phase IV is a free up spectrum, wherein you must have 25 channels in Mumbai, 25 channels in Bangalore, 25 channels in Delhi, 25 channels in Hyderabad, and so on. Out of this, you may have few Marathi channels, few English and other languages, maybe retro channel, few talk shows or sports. When this happens, then it will get under your skin. Currently, there is a certain amount of plateauing that has happened in terms of consumer interest, wherein those who have been listening are now hooked to the medium, but new listenership is not necessarily coming in. We should work on making regulatory policies, which will act on the radio market, instead of fretting about research.

Q. Are the ad rates also expected to rise with the industry showing growth?

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Ad rates are bound to increase as they are dependent on supply and demand, but they will happen in Q3, that is when the demand peaks. The ad rates had dropped between 20 per cent and 25 per cent last year for Radio Mirchi, but in the process, the volume has gone up. The inventory utilisation has also gone up, which is good news because it means more clients have tried radio and are spending a lot on this medium and, therefore, the volumes are full now.

Q. According to RAM, Mirchi leads in Mumbai, Delhi and Kolkata, except for Bangalore. What do you think has gone wrong in Bangalore?

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All I can say is that we have our internal issues in Bangalore, which are mostly related to what is to go on air.

Q. Going forward, what is the road ahead for the radio industry in 2010?

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I don’t expect there to be a significant growth, I think the radio industry will grow probably by 10 per cent, not more than that.

Q. What are the drivers of radio advertising in India? Which are the strong and weak categories of advertisers on radio?

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While there are many categories that are spending heavily on radio, there are certain categories that have become very strong, for instance, education and FMCGs are extremely strong, while telecom spending and durable spending have gone down a little on radio. So, consumer durables and automobile sectors, which are otherwise very strong on their performance, have seen a dip in their spending on radio. However, when you look at FMCG, education, retail in general, entertainment, banking and financials, all are shooting up and are the strong areas for radio.

Q. So, are there any digital plans of Radio Mirchi that you would like to share with us?

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Digital is certainly a big focus for us and we are investing a lot on this medium. So, you will see a lot more social community site building, you will see a lot many interactivity happening, we are unable to put music on our website because of royalty problems, hopefully this will get sorted out one day and we will be online with whatever is happening worldwide. We have a very successful operation in London called Absolute Radio, which is very strong in digital business. So, we have a lot to learn from them straight away.

Q. While automobile and consumer durables, which were otherwise strong on radio, have cut down on their radio spends, they have interestingly increased spends on the digital medium. So, do you see the digital medium as a threat or competition for radio?

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Not at all. The digital medium is the most misunderstood medium, its base is so small that it has to grow too. With more users, the ad spends are also going to increase, but they have their own problems. Growth of the digital medium doesn’t worry us at all because one day, we will be on the Internet platform. Internet is a platform, newsprint is a platform, but what gets monetised is the content, wherever it may be.

Q. How would you say has Radio Mirchi and the radio business performed in the Q3 FY10 results?

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There has been positive growth over the last year for Radio Mirchi. We declared 6.5 per cent over the last year in the same quarter. Primarily, most of this growth has come in November and December because October was again a good month last year. So, growth will start happening now and this quarter will most probably see a growth over last year. However, Q3 of the coming year will see the industry having a genuine growth as currently we are all below our previous growth. That is when the industry will grow above the previous level.