CEO, | 23 Apr 2013
Elections have become an exceedingly important part of radio’s revenue plans. The election spending in the 2009 general elections were healthy, but the latest Assembly elections in Gujarat have been much, much higher. We believe that political parties have seen the impact of radio. More than anything else, radio provides them the opportunity to talk of multiple facts, and attack each other in a rapid, flexible manner.
Radio is known to be the common man’s voice from the time when there was no social media. While the medium has been suffering in terms of content and economies of scale due to delay in the Phase III rollout and Government policies, it still enjoys the boon of randomness that songs line-up offer.
On their Mumbai station’s 11th anniversary, Prashant Panday, CEO, Radio Mirchi speaks to exchange4media’s Saloni Surti about Phase III expansion in Tier II and III cities, impact of elections on radio, AROI’s agenda and Mirchi’s journey so far...
Q. Phase III FM expansion and Union Budget’s promise of private FM services in towns with population of more than one lakh makes a lot of towns and cities potential markets. What are Radio Mirchi’s expansion plans in Tier II and III cities?
We will bid aggressively in Phase III, but always keeping profitability in mind. We have no dreams of being the biggest network by number of stations only, but of being the biggest in terms of revenues, profitability, market capitalisation, impact on listeners, and brand attributes.
Q. What kind of impact will elections have on radio according to you? How do political parties leverage radio?
Elections have become an exceedingly important part of radio’s revenue plans. The election spending in the 2009 general elections were healthy, but the latest Assembly elections in Gujarat have been much, much higher. We believe that political parties have seen the impact of radio. More than anything else, radio provides them the opportunity to talk of multiple facts, and attack each other in a rapid, flexible manner. Both the national parties advertised heavily on radio in Gujarat, we believe this will be quite the trend in other states as well.
Q. What are the major technical problems faced by the radio fraternity?
There is only one technical problem really. It is the lack of frequencies. We should be having 20-25 channels in each of our major cities. There is no technological problem. It’s only that a small section of broadcasters are not comfortable with more channels coming up. The government also needs to be a little more sensitive on efficient spectrum usage – especially after the 2G issues. We hope this will happen soon. If that happens, there will be nothing stopping the growth of radio.
Q. AROI this year has planned to set up an advertisement outstanding control mechanism, which includes outstanding policy and accreditation process under your expertise. Please shed some light on how you plan to take this initiative ahead for AROI?
There has been no specific progress on this. But I hope something happens. Collectively, the radio industry is forced to offer credit to agencies/clients to the tune of Rs 500 crore-Rs 600 crore, when it should really be only a quarter of this. The radio industry cannot afford this. It is itself cash strapped. AROI will have to think of ways to control this.
Q. Has Radio Mirchi grown as per your vision despite the tough economic scenario seen of late?
It has done very well. We’re happy with the performance of our first major metro market. We are clear leaders in listenership and revenues, and we are synonymous with the category itself (that’s true across the country though). We have a super team and we are particularly proud that we have done so much good work with our friends in the music industry. Also, with films we are the de facto brand for association. All in all, a very happy period of time.
Q. What kind of response have you received for Radio Mirchi’s digital streaming? How do you plan to enhance your digital services?
Quite a positive response! We are streaming four channels now, and have plans to double that count in the next few months. Unfortunately, the music royalties are too high, and since the revenues are practically zero, it becomes difficult to promote and grow that business. Hopefully, something will change on that front.
Q. What is your vision for Radio Mirchi over the next five years?
As a brand, Radio Mirchi will continue to be the leader in Mumbai. It will keep targeting youngsters. It will remain true to its promise of being hot. And it will continue to bring happiness to its listeners (Mirchi sunnewale always khush!). Of course, ENIL will perhaps grow much bigger on the back of Mirchi and its extensions/ new brands.