Radio One, a joint venture between Next MediaWorks and BBC Worldwide, saw its operating profit grow from Rs 0.25 crore to Rs 18.41 crore at the end of FY2012-13. The FM player’s revenue grew 16 per cent to Rs 50.41 crore for the financial year ended March 31, 2013 as compared to Rs 43.48 crore in the corresponding period last year. The EBIDTA margin stood at 36.5 per cent.
In conversation with exchange4media, Vineet Singh Hukmani, MD and CEO, Radio One sheds light on what elements helped the FM player achieve these numbers amid a tough economic scenario.
How did Radio One manage to grow in a sluggish economic year like 2012?
It is primarily because our content and ‘away from the herd’ format in all seven cities, which attracted a premium for the on air product from the market. We have stopped doing costly activations as our differentiated formats engage a well-profiled audience. We have a zero marketing budget because our product is our marketing. Lastly, we operate with the lowest team size of 130 people in seven cities. All seven stations have contributed to the profit, not just Delhi and Mumbai.
In the absence of spends on on-ground activation, what kind of services does Radio One offer in its advertising package?
If you have a well defined product catering to a well defined loyal audience in every city, you don’t need supplementary services. The other stations target right from SEC A to E, so really they can’t engage a particular TG and as an end result have to do expensive activations to get business. However, our automatic connect is with online media as 90 per cent of our audience is also online. Therefore, we offer the best response on radio + digital connect. We have many case study successes of this and clients have come back to us for our unique offering.
International format caters to a particular sect of audience. Do you think you are losing out on a large chunk of clients who come on board on radio for mass reach in a cost effective manner?
Everyone who is reading an English newspaper is also listening to Radio One in Mumbai and Delhi. Not only have existing clients chosen us for their mid-level and premium products in their portfolio, we have the maximum number of 150 new exclusive clients who have used only Radio One. What we have lost is ultra mass products wanting to reach smaller cities and we anyway don’t operate stations there. So we have only gained. Advertisers are used to print or television, which offer an English option that is successful and the online media is majorly in English, so why would they not accept a radio offering in English?
Due to its international format in the Mumbai and Delhi stations, is Radio One missing out on content formats such as Bollywood music launches and tie-ups, which are currently a trend in the market?
Trends are both local and global, and we get access to both. While the Bollywood stations focus on just that, in Mumbai and Delhi we focus on content that ranges from topics beyond just filmy masala to mature topics that deal with the lives of an educated working professional and his family, just as an English newspaper does. We don’t focus on the lowest common denominator audience and, therefore, our content is more evolved and aimed at a comparatively higher net worth educated customer. So, all the big Bollywood stars come to our station and they promote launches of their movies as English speaking Indians and we also get to be a part of Hollywood launches, not to mention the global business, sports, and many other communities. Having said that, we operate Hindi stations in Bangalore and Pune and Hindi retro in Ahmedabad and Kolkata, so we get to be a part of anything exciting happening in the Hindi space as well.
Independent music has emerged as a very engaging content format. Please share your views on it.
We are the only radio station to play independent artists in all seven cities on Thursdays from 10 PM to 1 AM on the ‘Music Express’ show. We have done this for 64 weeks now. As a one-year milestone for this, in the first week of April we played independent music for two full days in Mumbai throughout the day. We believe that independent Indian musicians are very talented and have a huge local fan following. We will continue to support this cause.
Post Phase III auctions, stations are expected to have multiple frequencies. Will this bring about any change in Radio One’s current advertising policy?
Our strategy for Phase III is to bid for the metros that offer us value and a sizeable educated audience. Multiple frequencies owned by the same player in one city will be discounted by the market and it’s not wise to get into that without proper thought. For the amount one pays for the license of one more frequency in Delhi and Mumbai, perhaps Rs 50 crore each, it is far more advisable to bid for smaller more lucrative markets with the same money. Our advertising policy is one of offering superior focussed engagement of a well profiled audience and we will continue to do that. We are not interested in mindless expansion.