Vineet
Singh Hukmani
CEO,
Radio One 94.3 FM
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| Did
we set ourselves up for a non-differentiated
FM radio play? |
We are coming closer to another forum
on radio -- the India Radio Forum. Once
again, a lot of issues will be repeated,
the Information & Broadcasting Ministry
will be requested for more sops, we will
want news, networking, etc., etc. Yet,
there has been no progress because we
as an industry are not allowing a solution
to a basic problem: that the bidding we
all did -- that too willingly -- was for
‘frequencies’ rather than
‘formats’. That perhaps is
the core reason why we are not able to
really differentiate.
Yes,
we read articles every day, everywhere,
where each radio player claims they are
differentiated. But aren’t those
largely ‘manufacturer-driven’
claims? Is the audience really getting
‘drop something else and listen
to radio’ kind of differentiation?
Is radio getting the ‘I never miss
this show’ kind of stature?
At
best we are all like supermarkets stocking
the same products; one day one of the
supermarkets decided to lower the shelves
to make access easy for customers and
goes on a nationwide campaign claiming
differentiation. That’s not differentiation;
it is a momentary edge, a convenience
easily copied by others. For the purpose
of this article let’s call this
‘supermarket differentiation’.
In
other successful radio environments, the
government body distributing licenses
does its homework on ‘audience available
per format/genre’ and invites format
licensing bids along with which comes
a designated frequency and radio
players only bid for a format /genre.
So you are not bidding for the frequency
per se but essentially bidding for a format/genre
that you find is your core competence
and you feel you can make money on it.
The frequency is just a carrier.
Depending
on the size of audience reached, various
format/genre prices differ. Also, the
government bodies in those environments
ensure that they have distributed formats
evenly and precisely so that the license
one pays is recovered easily through revenue.
They also ensure that formats/genres are
exclusive, thus giving the end listener
fantastically differentiated stations.
This is possible because differentiation
was in-built in the bidding process itself.
(Your TG is already a defined one and
therefore your marketing investment is
also safe by that logic.)
So
what did we do? Radio players, like telecom
companies, bid for frequencies and not
formats. We paid through our noses and
therefore did not allow for format differentiation.
Our government bodies obviously took this
as an easy revenue opportunity because
all they had to do was sell a frequency
which essentially required no research
effort from their side on audience and
format exclusivity and therefore differential
pricing. They also found in us a ready
bunch of players willing to pay such monies
thinking that the radio business was similar
to the national broadcasting character
of television, and not one of narrowcasting
to people with specific format/genre interest
areas.
So
what we have now is that everyone is more
or less a Bollywood station catering to
the young adult with at best momentary
‘supermarket differentiation’.
We
have, for example, a radio talk station
and another English station in Delhi which
ended up bidding in the same frequency
licensing pool whereas they could have
benefited hugely if there was a ‘format
licensing’ regime. Now, they are
essentially trying to make money in a
situation where any differentiation is
impossible due to the high frequency-licensing
pricing. And the others resort to claims
of differentiation knowing they have no
choice but to cater to ‘everyone’
– the lowest common denominator
audience -- so as to justify the high
license fee payout1
As
we witness radio brands reaching 30 cities,
45 cities, etc., again using network strength
to claim some kind of ‘broadcasting
power’, the core issue is that we
will be forced to peddle non-differentiated
frequencies as we have not paid for specific
formats but need to monetize the frequency
per se. We will be able to monetize reach,
yes, but it will be difficult for us to
charge that elusive premium on loyalty.
This
is where we all need to wake up and ask
whether we are going to allow ourselves
to be set up for ever more? Should we
not start making the shift to a format
licensing regime? How do we shift from
the current status quo to a more fruitful
future?
Hopefully,
we will find some answers at the India
Radio Forum. Hopefully, the large number
of international experts will be able
to help us understand things better and
offer solutions and not just touch on
‘forum friendly’ topics. Hopefully,
the AROI will realize how we will continue
to be set up even in the next frequency
licensing bidding, further resulting in
the medium losing differentiation lustre
in an ever increasing competitive media
space.
GEC
and format-specific TV channels are progressing
into a differentiation spree, with risks
being taken to increase viewership and
loyalty. There is no ‘frequency
licensing’ investments in television.
Radio, unless allowed a format regime,
will end up being a pale cousin that willingly
got set up right from the outset. The
radio industry has to find a solution
-- and find it quick.
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Send your comments to Vineet
Singh Hukmani
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