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IndustrySpeak: Regional markets, the next growth areas for FM radio – Part II

14-July-2008
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IndustrySpeak: Regional markets, the next growth areas for FM radio – Part II

Regional markets have become the focus of media companies in India of late. In this two-part report, exchange4media probes the FM radio scenario in the regional markets. While Part I gave the views of some regional FM players as also media planners, Part II looks at the broader picture, ad revenues, and the road ahead.

How do advertisers view regional players?

On her relations with advertisers Monica Nayyar Patnaik, Director Eastern Media Ltd, said, “Undoubtedly, fantastic! Otherwise, we would not have been able to strike a deal with our esteemed advertisers. Since they are receiving good response from our FM, they seem to get more and more convinced of our listenership. We treat our advertisers as our growth partners.”

Naval Toshniwal, CEO, Tomato FM, however, had a different take. He said, “National players enjoy a larger than life image amongst the corporate advertisers. The regional players usually lose out to national players as there is no measurement tool in place to convince the advertiser.”

Divya Radhakrishnan, Senior Vice President, TME, explained, “Advertisers on FM can be classified as national and regional, who would be advertising in the ratio of 70:30, hence 30 per cent of the advertisers would surely be pre-disposed to regional players. National advertisers would go by the channel’s audience delivery, and if satisfactory, would also be positively inclined irrespective of the fact that they are national or regional players.”

According to S Venkatesh, Senior Vice President, Lintas Media Group, “Regional players have the advantage of giving a local flavour and hence a stronger connect with the listener, compared to a national player. From the advertising perspective, advertisers would still weigh regional player as against a national player when it comes to local inputs negating network advantages.”

Ravi Nair, Programming Director, Radio Mango, believed, “While a lot of agencies would tend to avoid the tedium of planning separately for different regions and prefer to go with a player with national presence, there is an increasing trend for advertisers becoming selective in opting for players with better reach for their TG.”

Future of Regional Radio Stations

Nair further said, “Regional players will always have their strengths in their backyard due to their better understanding of the market, culture and sensibilities in their territories. In fact, many national players have or are trying to tie up with regional players for greater synergies.”

“From Radio Choklate’s perspective, till date we have not experienced any such pressure from larger network players, except a few national campaigns which went initially to them. Our focus had been on the local market, which really and fruitfully paid off. Although there is no study to support our claim, but by our own measure, we occupy almost 80 per cent of the advertisement share locally,” claimed Patnaik.

Echoing the same, Toshniwal said, “Future will surely be better than what it is now, as things can’t get worse for a regional player. With local ad revenues picking up, radio as a medium gaining more respect from the advertising fraternity as well as availability of measurement at smaller towns will surely help the regional players in a big way.”

Commenting on the future of regional players, Venkatesh said, “With the relaxation on the license fee, regional players have got an extended life, and if music royalty, which is a huge stumbling block today, also gets relaxed then the whole business model will turn profitable.”

He further said, “Regional players, backed by local media power houses like Malayala Manorama for Radio Mango, can withstand the pressure from national players. The more the local stations romance the regional advertisers and gain their trust and confidence, the longer would be their chances of survival.”

According to Radhakrishnan, “Fundamentally, radio is a regional medium, hence though the player may be national by way of their network expanse, advertisers will choose the network for the regions it covers.”

Harrish M Bhatia, COO, My FM, observed, “FM radio is a comparatively new medium of mass communication in these areas, so the basic challenge being faced by every player is to establish it as a category. There is an acute shortage of trained manpower, which is resulting in high attrition levels. Talent crunch is bound to increase till such time as the associations come forward to create academies and training facilities.”

The Road Ahead

The regional player scores over the national player when it comes to local advertising revenues. There is a lot of money locally, and a regional player should rather concentrate on achieving maximum share of that revenue.

According to Vineet Singh Hukmani, CEO, Radio One, “Regional players should look to tying up with like-minded metro partners who don’t have conflicting interests. This will help complement both national and regional players. Radio One is very keen to look for such associations with regional players.”

Also read:

IndustrySpeak: Regional markets, the next growth areas for FM radio – Part I

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