COO | 05 Feb 2003
"The battle for listenership shares is increasing by the day. It’s becoming more of a struggle for existence for a struggle for existence. However, Mirchi has been fortunate to some extent – as it had a lead in terms of Mumbai launch – the most important market for FM players."
The aim now is to keep the pace. Prashant Panday, Chief Operating Officer, Radio Mirchi believes that two important things at the moment are building the brand and building the category. In a conversation with Ritu Midha he talks of The present day scenario, future expectations, competition and research.
Q. Radio today seems to be a tough business to be in. What are the major hindrances in the growth of radio?
I would not call it hindrance, but the biggest challenge for radio is to make the medium itself big. The Radar study in this respect, showed radio as a medium in good light, it shows that radio penetration is very high – 64%. It means in Mumbai there are 85 lac people who can access radio if they want to. There are 45 –50 lac daily listeners of radio. It also brought out the fact that a large number of TV viewers listen to radio.
We have to focus a lot more on developing the category. Last thing you want to happen is to have a large market share of revenue and listenership and category remains small. Lot of our marketing activity is focused on expanding the market.
In terms of hurdles… Definitely a fixed license fee regime is a hurdle. You cannot afford to be niche in programming. A couple of players did try to go niche and, to be honest, they are doing a good job. But the problem is if you are just covering 1% of listenership, how much do you expect the advertisers to pay? They pay you peanuts and you make 5 to 10 lac rupees a month. Many players have come back to Hindi. Mirchi was always there, City and Win have also moved to Hindi. Even Red is changing its Hindi mix. The only one who stayed back is Go.
Q. So isn’t there a clutter there now, as far as listeners are concerned?
Multiple players and all doing the same kind of product can’t happen in any product category. The industry has to figure out a way of handling that problem. A change in the programming by various stations is needed, and that can happen only if there are multiple stations, and they will come in only if license fee structure changes.
Q. Are you looking at changing at the programming mix?
We are very focussed. We don’t play any retro, ghazal or English programmes. We give our listeners 24X 7 contemporary Hindi. That’s how we have positioned ourselves. We were the first to occupy this position and we do not intend to change anything.
Q. What do you think of the advertisers’ outlook towards radio? They look at it as a me too medium.
A lot of education is required. The perception, no doubt, is there that radio is a frequency builder only and it is only a myth. In fact, in India radio is the only medium which gives both reach and frequency. Radio Mirchi gives you 45 lakhs wekly listeners as per Radar study. There is an average listernership of 45 minutes per day on the station. The rates are so reasonable that you can afford 10 or 15 spots a day and run the campaign for 15 days or three weeks at a fraction of the cost that you will incur in print or Television.
I think advertisers today are very keen at Radio. There are about more than 300 advertisers on Mirchi. Today it is fashionable to be on radio.
Now with Radar coming in with software tool available for calculating GRP and deliveries I think agencies will take radio optimistically.
Q. In Mirchi’s case, can that be because of package deals with print…
We sell independently and do not offer any package deal. Though we belong to Times Group – we are an independent company.
Q. Excitement around FM radio already seems to be reducing. People seem to be going back to CDs and cassettes.
I think cassettes, CDs are different from radio. You listen to radio when you want a certain random mix of music.
Q. The problem is that one ends up listening to the same random mix three times a day…
Not really. While listening to cassette or stereo you listen to music of your choice. Worldwide it has been proven that radio does not eats in cassettes or CD’s sale. Radio actually builds in the sales of CD’s and cassettes.
As for the common and regular fare being aired on all the stations, to a large extent it is true. Nobody wants to experiment due to the fixed license fee. However, we have discovered that in households there is not too much multiple listenership. For example 44% or so of our listeners are exclusive Mirchi listeners. It is only 105-110 minutes of radio listernership every day in India at an average.
In TV, there is hardly six hours of original programming, but no one notices. You watch TV only in a certain time band and everybody who listens to radio has their own time band to listen to radio. Lot of people listen to it in the morning many people listen to it while they drive. Housewives listen to radio between 11 and 2, and college students tune in between 2 and 5. So they don’t overlap and feel the repeat.
Q. But there have been instances when the same song plays on all the stations when one moves from one to another?
It can happen. It is like you buy five brands of salt and they all taste the same. There is one brand and there are whole lot of followers. Our research indicates that in radio space there is only one brand Mirchi and there is a whole pack of others who offer the same product.
Q. Some of the stations feel that people listening to their stations sometimes say they are listening to Mirchi because brand recall is very high for your station.
Very nice! Every five minutes there is a brand name on every station. Actually these s believe that consumers are dumb. As they have no business, they are clutching to every straw that comes. Research indicates that total awareness for Mirchi is 75% and total awareness for Radio City is 55%! It is not that people are confused and City’s awareness is only 5%.
Advertisers do not get carried away by all these numbers. They do their own research, agencies conduct researches. There are close to 80% repeat advertisers on Radio Mirchi so that speaks for us. I rest my case.
Q. When do you see the industry attaining the break-even point?
It will take years and I do not see that happening, to be very honest. Let me give you some numbers. Our estimate for Mumbai is that it is getting about two and a half crores in terms of revenue per month, which translates into around Rs 30 crores a year. Just the license fee is 50 crores. So it will take years. Even if that happens not every body will break-even. There will be a natural industry phenomenon, the first two guys make money, and the rest…
Q. Do you expect shakeouts?
Well, April-May will be critical, because next round of licenses would happen then. I do know that a lot of players are not making even ten lakhs a month, so they will have a problem. As they are all from media groups, radio share of business in their bouquet is pulling down the profits of other. How they all are big players and can easily afford to stay on the same media space, and I really hope that they do so.
Q. On another front, how important is it for the radio s to have an emotional bonding with the local people?
It is very important. We must know what the customer wants. To a great extent the industry has evolved and people have done a lot of research as to what the people want and understand the listening habit of the people. Bonding will naturally build in. We for instance do a lot of research in figuring out consumers’ music taste and moodscapes what the consumer moods are in different point of time. We also do lot of tie-ups and contests for the consumers.
Q. About your new station to be launched in Chennai. Will it also focus on Hindi?
Chennai strategy will be soon finalised. We will surely look at what the people want. Our intention is to be a mass player and not to be a small player. We will surely consider the fact that Tamil is popular in Chennai.
Q. Does research happen only to gauge the numbers or also to gauge what audience want. Is it usually the case of same numbers getting picked by all the stations?
That’s not true. Numbers in our are decided on the basis of AMP. And we also do a lot of consumer research to figure out the numbers to be aired. Music is chosen very scientifically. We have done a lot of research to segment Hindi film music in various sub-genres.
Q. Are you looking at playing these fragments at different parts of the day?
Our mood-scape research helps us in figuring out what consumers want at different parts of the day. Our brand will remain the same day and night long. However, the song that will be playing at that point of time will suit the mood of that hour. For example Bindas Bol which plays from 2-5 is targeted at college kids. So the RJ is young and speaks students lingo and has songs that will attract them more.
Q. Do you think agencies need to relook and create ads specially for radio?
When TV was launched most creative people used to think print. And they failed initially, but look at our TV advertising today. So I am not worried about radio advertising. We already have some fabulous creative work in this field and I think creative people are very excited by the new challenge.
Q. Which product categories, you think, will do well on radio?
Radio is an electronic medium so what works for TV will work for radio also. FMCG, services, durables are strong on radio. The category, which should have come on radio in a big way but has not is retail. For retail radio is a boon. Retail could fuel the boom that radio requires.
Q. But aren’t radio stations looking at retail and focussing at it?
There is very little retail advertising on radio. I don’t think anybody has succeeded but efforts have been made. It will take some time. We need experimentation. In Indore more than half of Mirchi revenue comes from retail. In Ahmedabad and Pune it is probably about 25 to 40% of the business. But in Mumbai it is at 10%.
We all are selling radio the way we sold TV. The trick is in understanding the guy’s problem and giving marketing solution to them and than latching on media to it and not the other way round.
Q. Lets talk about research now. The findings of the recent Diary Study by NFO are being talked about. What is your reaction to it?
It is a laugh. I have never come across a research that is done only in A and B segments with minimum 40% owning cars. It is dream like TG. You know a radio company did a research just in Colaba because they were desperate to get the numbers. Incidentally, Radar study conducted by IMRB had some very different numbers if I am say so.
Q. Was Radar 2002 a syndicated study?
It was an industry study. It is an independent study done by IMRB. Several players have bought it. Five to seven agencies have also bought it.
The ORG MARG survey to some extent can be called a syndicated study because they have spoken to radio players and probably advertisers. They started it in mid-December. It is a day after recall study.
Q. Isn’t IMRB working on a dairy study?
Yes they are. Both the systems have their advantages and disadvantages. Diary system typically assumes the person to fill up the data as and when he/she has consumed and that usually does not happen. What usually happens is that they fill up the diary only when the collection day comes. And then people try to recall what happened through the entire and that is why more of failures come in the diary system. Abroad, for example in America, where diary method is most commonly used, every broadcaster knows which day are the collections done. And all marketing activities are focussed on building up listernership just the day before.
Countries like UK, USA and Australia are continuing with it because it has been used for the past many years. And there is 20 billion-dollar industry, which is consuming that diary data. Nobody wants to do away with it. The moment they go into any other method from diary there will be confusion. Even broadcasters don’t want it since their ratings may crash.
But it is not that diary is not good. It has its own advantages. it helps when you want to consider the impact of changes. Let’s say you were listening to Radio Mirchi two months earlier and now you have shifted to Red than I can try to track why an x person with a particular background has moved away from my station. It can be used for tracking changes. But for a more reliable listernership data ‘day after recall’ is a better system.