Chief Strategy Officer, | 20 May 2013
We will expand to markets where it makes business sense to us. The business sense works in two ways – the market itself is an attractive market and from the auction point of view it makes sense. Sometimes some markets are important from a geographical proposition that we give advertisers. For instance, Punjab is an important market, UP is a potent market, Kerala is an important market.
Mahesh Shetty, the Chief Strategy Officer of ENIL, joined Radio Mirchi in November 2006. Shetty has 15 years of experience in media and FMCG sectors. Prior to joining ENIL, he had a long stint of 11 years with PepsiCo International, where he was responsible for managing the On Premise & Modern Trade sales channels for India, along with managing key national customer relationships. Prior to this, he has held various regional sales & marketing managerial roles at PepsiCo.
In conversation with exchange4media’s Saloni Surti, Shetty speaks about Radio Mirchi’s association with Abu Dhabi Media, learnings from the international market and the current scenario in the Indian radio industry.
Q. How does Radio Mirchi’s association with Abu Dhabi Media company work?
We have licensed our brand through Abu Dhabi Media. The UAE has an extremely competitive market in the sense that including Mirchi, there are now seven Bollywood radio stations, a few Malayalam, Arabic and English radio stations. Even in terms of revenue they have a large market. Abu Dhabi Media had a radio station, they have newspapers and television channels, but they did not have a Bollywood offering and were looking for a good brand and that is how we came into the picture. We have licensed our brand to Abu Dhabi Media to be used in the UAE. We support them with creating content in terms of how the show should be, what the music flow should be and we keep giving them inputs on marketing. They also leverage the strong connect that we have with Bollywood over here for creating content over there. Our association is primarily on content and brand licensing.
Q. Please share a few things that you have learnt from the UAE markets that can be utilised in the Indian radio scenario?
From a content point of view, there is not much because the Indian market, especially in terms of Bollywood, is a few years ahead of that market because we are closer to it. But in terms of future of radio, once more licenses start getting auctioned in metro markets – in Mumbai there are 20 channels, all these channels need to be positioned differently. Today what we see in the UAE is that there are different kinds of audiences, and for each audience we are creating a different product. When we have more frequencies in metro markets, we need to keep in mind how we try to position them to cater to specific audiences and how to fine tune our products.
Q. Does Radio Mirchi plan to expand in other international markets?
We are looking for opportunities; there have been a few interesting enquiries, but we are particular about who we partner with because we look for long-term associations that are mutually beneficial. Any market with major South Asian population is something that we are looking at.
Q. Phase III offers a lot of scope of expansion in tier II and III cities. What are Radio Mirchi’s plans of expansion in tier II and III cities?
Our objective has always been to make Mirchi the largest brand in the country and also run a very profitable radio business. We will expand to markets where it makes business sense to us. The business sense works in two ways – the market itself is an attractive market and from the auction point of view it makes sense. Sometimes some markets are important from a geographical proposition that we give advertisers. We will definitely bid aggressively, but we will bid where we feel we can make profits. For instance, Punjab is an important market, UP is a potent market, Kerala is an important market.
Q. There has been no content differentiation lately on Radio Mirchi. Please elaborate...
Different markets are different; therefore, if you look at our Kolkata market, there is a huge appetite for old stories. So, in Kolkata we have experimented with the talk format and it has picked up well. The product that we have right now, we have arrived at it only after experimenting. We started off with as a non-stop hits radio station. Then we started playing retro music and then 90s music in the afternoons. Thus, you try stuff then there is no point changing it. Also, in different markets we keep tweaking our products and basis our listeners’ choice, we keep making changes.
Q. How has the advertising activity been across radio at the end of the first quarter, as opposed to the same time last year?
Radio did well in the last quarter and when I say radio did well, I mean it did well relatively. Inventories have been going full. Most brands have realised that radio is a very important part of the marketing mix. Most of the guys who were active on IPL were active on radio. For instance, Pepsi, Usha and Vodafone are active on IPL and on radio. Brands now do not focus on just one medium, but across mediums.
Q. What kind of impact of will the 10+2 ad cap in the broadcast space have on radio?
Let’s see how it plays out, it will definitely help increase demand for radio. Radio desperately needs an increase in price and an increase demand will also lead to an increase in price. A lot of SMEs advertise on news channels, there will be a constraint in the inventory and a lot of brands will not be able to advertise with them. These brands will be looking at spreading their money across platforms and thus, a spill over will take place.