“Radio is the only medium growing at double digit CAGR”

2012 was indeed a very important year for the radio industry. Although Phase III FM expansion did not materialise, a number of measures taken to fill the gap created by the delay in auctions emerged as key trends.

Differentiation and customisation of content were the two key elements in creating attractive packages for listeners and advertisers, respectively. While listeners look at differentiated content to which they can connect, advertisers look at more customised packages that provide them something beyond vanilla FCT (free commercial time).

Vineet Singh Hukmani, MD and CEO, Radio One says that while 2012 posed a number of challenges, Radio One witnessed exponential growth due to its differentiation strategy. “We transformed ourselves in 2012. Our operating profit has grown exponentially in a market that has grown only incrementally. Our people are enjoying the feeling of being different and are more motivated than ever to succeed,” said Hukmani.

He explained that Radio One wanted to be “away from the herd” in all aspects. The network seeded international formats in Mumbai and Delhi, which are otherwise Hindi markets. While most of the radio stations in Bangalore and Pune are regional, Radio One established a 100 per cent Bollywood editorial. In Kolkata and Ahmedabad, Radio One initiated a Hindi retro station and Chennai is a 100 per cent request station, to break the clutter.

Shedding light on the advertising activity on radio this year, Hukmani pointed out that there was about 12 per cent growth in volume and value at an average. “What is heartening is how advertisers are shifting budgets from television and local print on to radio. It is still a long way to go to reach 5-6 per cent of advertising share, but things are moving in the right direction,” he added.

Advertising activity in 2012

Advertisers now also prefer differentiated content as they have realized that differentiated format radio allows better profiling of audiences and have invested into the on air product, thereby building value. Hukmani informed exchange4media that clients, both at corporate and retail levels, have realised this and retailers are taking to radio and reducing their print budgets. “Radio is the only medium growing at double digit CAGR,” he affirmed.

Key industry trends

Factors such as delay in Phase III, requirement of innovative content and increasingly intelligent listeners gave rise to a number of key market trends. According to Hukmani, a key negative trend that emerged in the industry is that almost all radio networks are peddling free off-air activation to get on-air revenue. This makes clients discount the medium. On a positive note, any innovation and on-air differentiation have many takers in both existing and new advertisers.

“An interesting industry trend is the continuous delay in Phase III, which is robbing the industry of its rightly deserved buoyancy. However, everyone in the industry is united and wants to sign GOPA as per the existing Phase III guidelines,” Hukmani further said.

The road ahead

In the milieu of all the differentiation that Radio One created, Hukmani explains that it is just the beginning. Radio One plans to continue with the existing editorial policy and take listener experience to a completely new level in 2013.

“Everyone who works at Radio One continues to shine as one team and we continue to pioneer differentiated radio in this country,” said Hukmani.

Although Radio One managed quite a successful year in 2012, things could have been way better if Phase III rollout had taken place as planned. Nevertheless, broadcasters still have their hopes high on the subject.

“The radio industry requests the Information and Broadcasting Minister to take radio more seriously and speed up the signing of GOPA and bring in Phase III quickly. The industry requests the I&B Ministry to ignore impractical and dangerous recommendations by TRAI as it will only cause unimaginable delays,” concluded Hukmani.