Radio in 2023: Players tuning into growth frequencies

The radio industry is expecting to draw better ad volume and ad revenue in 2023. Backing up this positive prediction is TAM’s report for the sector, according to which there was a 25 per cent growth in ad volume in 2022. The TRAI September quarter report also says radio ad revenue was up 11 per cent.

As of 30 September, 2022, there were 388 operational private FM radio channels in 113 cities run by 36 private FM radio operators, the TRAI report states.  

This data further supports the significant curiosity amongst brands, advertisers, and radio companies about the sector’s scope of growth this year. We took insights from radio industry experts on the latest trends, about the investment interest among brands and advertisers, and the challenges that lie ahead.  

The feeling is postive 

DB Corp Chief Executive Officer Rahul Namjoshi believes the outlook is positive and the signs are clear that the sector is set to expand. “The radio industry should benchmark FY20 as the base year, and look forward to growing double digits over that in FY24.” 

As for Ashit Kukian, CEO, Radio City, “The year 2022 focused on economic recovery after the two years of lull caused by the pandemic. The radio industry witnessed a positive sentiment among consumers as well as advertisers to spend, especially during the festive season. This led to the growth of radio advertising in 2022 and we expect this phenomenon to continue gaining momentum in 2023 as well.” 

Sharing Radio City’s strategies for this year, Kukian said, “At the heart of our operations, Radio City is an advertising solutions company that caters to two sets of audiences - listeners, and advertisers. Earlier the core focus was providing radio-specific solutions, but with the advent of our ‘radigitalization’ strategy, we have started providing holistic solutions that include radio plus digital offerings. We are confident that with this approach, radio is pegged to grow further in 2023 and beyond.”  

Abraham Thomas, CEO, of Reliance Broadcast Network, says the revenues are expected to cross the pre-pandemic levels with growth being driven through tier 2 and tier 3 markets. “While the metro markets will continue to grow, those in Gujarat, Maharashtra, UP, Rajasthan and MP will grow faster driven by Nagpur, Jaipur, Indore, and Surat.” 

Who is going to lead the way? 

According to the TAM reports, in 2022 the properties/real estate category witnessed the highest increase in ad secondages with a growth of 80%, followed by hospitals/clinics at 73% growth. Sharing his prediction for the category expected to lead growth, Namjoshi said his bet is on the dotcom and app business that has got some traction apart from regular radioactive categories like real estate, lifestyle and education. 

About categories that are likely to participate in radio advertisement this year, Kukian, said, “The radio industry was majorly supported by advertising from sectors such as Real Estate and Healthcare. This year, along with these categories, we are seeing a growing interest from sectors such as finance and auto to make the leap in terms of ad volumes followed by retail, services and education.”  

Appreciating the real estate sector, Thomas, said, “Thanks to the sustained faith of the real estate industry in radio as a medium, it has maintained its foothold as a consistent spender during and post the pandemic. Health, fitness and pharma have been the other emerging categories. This includes gym equipment and supplements. This sector has grown by 80% over FY20.” 

Tracking the challenges 

Before the Union Budget, experts in the radio sector highlighted how rationalisation of the GST structure is essential for the overall growth of the industry, and how manufacturing of radio equipment within the country could make the sector self-sufficient. According to Kukian, “The advent of multiple formats of content consumption poses a challenge for the radio industry. But, consider these challenges as opportunities to keep thriving by introducing innovative and unique concepts to stay relevant and add value to the lives of our audiences.” 

Sharing the advertisers’ perspective, he further said, “Radio has always been a popular medium for entertainment and advertising. However, emerging technologies are playing a role in altering radio's appearance where future technologies may modify the structure of radio waves, resulting in a diverse environment. The ultimate objective of the radio industry is to enhance the theatre of mind experience of listeners, allowing them to enjoy their favourite broadcasts and expanding radio's reach to all regions, especially across smaller markets. Another important aspect is adapting to the latest developments in the industry such implementation of influencer marketing and artificial intelligence in the radio broadcasting industry.”  

As for Thomas, “While the radio industry, too, has been affected by the overall economic downturn, many new trends are emerging. Only those organizations that can adapt and innovate will be best positioned for success. Multiple revenue streams like Solutions, Digital products, Influencer marketing, and activation/amplifications and events are growing rapidly and will contribute up to 30% of revenues for this sector. Regional IPs and spikes are gaining a lot of traction and emerging markets are growing at a faster pace and crossing pre-pandemic levels.” 

Talking about the measurability issue, he said, “The major challenge for the radio industry continues to be measurability with increasing competition from New Media, but the shift to outcomes over outputs is helping radio + digital to become a potent option.” 

Further, Namjoshi shared how the music royalty issue is not yet sorted and how broadcasters are dealing with multiple litigations. 

“Talent retention is another challenge that the Radio Industry is having, and most importantly we should get back our FY 20 rates back,” Namjoshi said. 

Trend Watch 

According to the TAM reports, 30 to 40-second commercials were the most preferred on radio in 2021 and 2022. 

Elaborating on the radigitalisation strategy, Kukian said, “There have been major digital transformations across industries and radio has also adapted to this transformation led by digitisation.” 

“Radio City is at the cusp of its ‘radigitalisation’ strategy, where the focus lies on the unification of offering radio plus digital solutions to the audience. Through our cutting-edge approach, we strive to effortlessly connect with the audience by developing content that accurately reflects their preferences. The current trends in the radio industry include offering regional podcasts for hyper-local reach, harping on the indie culture, offering value-added solutions to the advertisers, collaborating with on-ground events, and much more to position radio for its next phase of growth.”  

Elaborating on the concept of how radio works beyond radio, Namjoshi said, “Brands no more see radio as just radio. We now work as 360-degree solution providers in the retail market. Our solutions are a mix of radio, digital, on the ground, depending on what is the client's objective from the campaign.” 

Focusing on technological transformations, Abraham said, “Radio’s technological transformation has made it possible for its content to now be enjoyed across audio streaming platforms and also through different mediums such as podcasts, audiobooks, smart speaker’s solutions, chatbots and gamification amongst others. AI will continue to become more perceptive with the influx of new technologies. It will become a powerful tool to analyze data and provide solutions. Radio campaigns have started focusing on Automation via Bots, Gamification, etc. Metaverse too is gaining traction and will lead to some disruptive changes which will be more immersive and interactive. This belief system is visible as more and more digital brands such as Online Games, Fintech, and Edtech amongst others are counting on Radio for better reach and engagement.”  

Revenue Growth  

On the TRAI report’s findings about the increase in revenue in the September quarter, Namjoshi said, “The growth is majorly from retail market advertisers. We are hopeful that Q4 will also register growth.”

According to Kukian, “The radio industry with its new age multimedia strategy is expecting 25 per cent growth.”

Sharing the sentiment was Abraham, “We expect the radio industry’s growth to continue, with categories like Services, Real Estate, Retail, Pharma and Automobile leading this recovery.”