Business Director | 26 Dec 2012
I would love to focus on content differentiation. I would like to see people tune in for custom made content; hence, radio can attract appointment listening rather switching between stations. Stations can go beyond RODP selling to programme based selling.
Anil Cheriyedath has been part of the GroupM family for over eight years now and heads Business of Maxus and Motivator, Kerala. He comes with a media experience of 12 years and has worked with various full time advertising and media agencies.
In conversation with exchange4media’s Saloni Surti, Cheriyedath speaks about how the year 2012 was for the radio industry from a third person point of view.
Q. How was 2012 for the radio industry? Would you say it was a better year than 2011?
Radio has just managed to score higher than what it had in the previous year. Compared to last year, radio saw 5 per cent growth over the previous year. Last quarter, that is, October-December was good, but most of the year was flat. Compared to that I think Diwali gave radio players an opportunity to capitalise on the festive season, resulting in an increment in revenues.
Q. What was the radio industry’s biggest miss and biggest achievement in 2012?
Biggest miss would be that Phase III expansion did not materialise. The radio industry was badly affected by it. After the introduction of FM policies at the time of Phase II, the radio industry started improving with rich numbers. However, the growth did not continue due to various reasons. The government needs to answer as to how they want to go about with Phase III. Everybody was expecting the auctions in the initial part of the year and had made plans, but due to the delay a lot of plans did not materialise. In a way the miss (Phase III) and achievement are related, for a lot of them were dependent on the execution of Phase III. These plans will be an achievement next year when Phase III materialises. In terms of miss, I don’t thing the royalty issue is sorted out completely some clarity is still needed. Content on radio continues to be completely about music and that makes it very critical for the industry. These might be a few things that may have been pulling the industry back a bit.
Q. Do you think that the industry is suffering to an extent due to mass show formats?
There is not much content differentiation in radio. There is lack of variety, lack of innovations and lack of thought; everybody wants to talk with everybody. However, some amount of segmentation of target audience is required, be it in the form of content differentiation or in the form of media planning. Certain amount of segmentation is ideal for the mere reason that it is a retail medium. By retail I mean a local medium, it is spread across various kinds of markets and targets different kinds of people. In a local medium, one has to be careful about what is required in that market and accordingly design that kind of content and create differentiation. Creating this kind of segmentation is very critical. I am not sure if anybody has provided such differentiation in the last one year.
Q. While currently every mishap in the radio industry is attributed to the delay in Phase III, how much do you think the delay has actually affected?
I don’t think Phase III is the reason behind everything. How Phase III is a reason for building content differentiation? Radio stations should anyway try to create content differentiation, since listeners are changing very fast and adapting to these situations are critical. For instance, Radio One has switched to English in Mumbai, and has introduced Retro music in Delhi and Kolkata as part of creating differentiation. I think the change has helped them to stand out in crowded cities such as Mumbai and Delhi. It’s not about being static, but to adapt and change according to the situation. Hence, I am not sure if everything can be blamed on Phase III.
Q. While Tier II and Tier III cities are said to be not much impacted by the delay in Phase III, do you think the growth showed by them was as expected?
During the economic slowdown, the growth pace of Tier II and Tier III cities was maintained. These markets were stable and brands started to invest more money in the smaller towns. On the other hand, radio as a medium was rejuvenated through FM Phase I and Phase II. Phase III should give an extra push to the medium in smaller markets and open up new markets. But I think the volume of business is still driven by the metros and Tier I and II cities.
Q. The radio industry experienced a slow year in terms of revenues. What are your views on that?
I think brands were spending cautiously this year, since the overall sentiments around various economic activities are not positive. This has a direct impact on revenues of the radio industry as well. Changes in policies by the Government and other authorities have also impacted some of the businesses, such as gold loans, who are one of the major spenders.
Q. What do you think the radio industry should expect from 2013? Will there be a surge in advertising expenditure as compared to 2012?
According to me, 2013 will see a lot of investment, but in terms of ADEX growth, I think it is still going to be in single digit, unless and until there is a big turnaround in the economy.
Q. If you had to bring about one major change across the entire radio platform, what would that be?
I would love to focus on content differentiation. I would like to see people tune in for custom made content; hence, radio can attract appointment listening rather switching between stations. How about radio channels marketing for specific programmes such as ‘Ramayana’ by Fever? Stations can go beyond RODP selling to programme based selling.