Our content strategy is to be micro local: Abraham Thomas, CEO, Radio City 91.1 FM
Abraham Thomas, CEO of Radio City 91.1 FM talks about the side effects of various policy decisions during the first half of 2017 and the road ahead for the operator as well as the radio sector in India
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The radio industry, like many other sectors, faced the side effects of various policy decisions during the first half of 2017. However, the industry is now looking to shrug off these aberrations in the second half of the year. We caught up with Abraham Thomas, CEO of Radio City 91.1 FM, to understand the road ahead for the operator as well as the radio sector in India.
How was 2017 for Radio City?
The market was extremely strong in the first half. We launched 11 new stations in Phase III. There was also the integration of Radio Mantra into Radio City. Right now, we are present in 39 cities spread over 12 states. Post demonetization, there was a slowdown but we still managed to maintain our revenues. Now it’s all about consolidation and growing. The new markets, especially, have responded really well. All our markets already had competition in FM radio, so we were new entrants in these markets. In certain markets, some amount of disruption helps but the market is used to FM advertising, which helps. Phase III stations have done quite well.
Has the slowdown continued into the first quarter of 2017?
Some categories have gone slow. For example, real estate has seen a slowdown because of RERA (Real Estate Regulation and Development Act). The bigger players are continuing to advertise though the smaller ones have stopped spending. They were still spending in April but in May-June, the sector has been down. Categories like Education, which are seasonal and typically spend in Q1, were down. Government, which is among the top 3 categories, was down for about a month but has started spending again now.
What is the content strategy for the new stations that have gone operational, since these are Tier II or Tier III cities?
We have a very clear music strategy, which is based on mood mapping of the listener in every city. We have found clear differences across all cities in terms of the time they begin and end listening and the kind of shows they like. We also abide by the maximum music promise so there is a minimum of 12–13 songs we play every hour irrespective of advertising. The other side is that we try to be as local and relevant as possible. We do a lot of research and the one point on which we win is the station that best reflects the city. We are very different in Jaipur to what we are in Mumbai or Bareilly. A lot of effort has gone into creating local connect. In fact, we look at creating ‘micro cities’ in the bigger cities. Micro local is the content strategy that we have built.
In terms of advertising spends on radio, how do you expect the remaining half of 2017 to shape up?
We are pretty optimistic. We feel that advertising in the second half of the year will be much better. Whatever are the effects of demonetization and GST, they should even out by H2. We are optimistic about the festive season and the second half of the year.
How is GST impacting the radio sector?
Right now, in some categories we are seeing spend before the prices go up while some others are still waiting for clarity. I think it will balance out. In the long term, GST will be good for us. I think it is the implementation that worries people.
The three-year lock-in period under Phase III expires next year. How will this change the radio scenario in India?
Under Phase III, the majority share owner of a radio station cannot exit for three years, which expires next March. This opens a lot of opportunities for partnerships, mergers and alliances. This will be an interesting play.
Do you expect to see a lot of consolidation in the market pose March 2018?
There will be some but not a lot. There are a lot of players that feel the need to be part of a bigger network. Advertising is still skewed 60: 40 in favour of national advertisers. So, the bigger networks have the advantage of being able to pull in the national spenders. The smaller networks have an advantage when it comes to local advertisers. Therefore, I am sure there will be a lot of alliances, partnerships, etc. that will take place.
The private FM sector is in the process of setting up a new measurement system. How important is that?
It is something that is long overdue. If you want to grow and expand the pie, then you have to be relevant and ensure that the advertisers know where they are spending. Though we all got together and did the first cut of measurement 12 years ago when we set up RAM, we have not really gone beyond that. Now, everyone realizes the need for a more robust measurement and technology, which also helps. Measurement is always about cost versus accuracy; the more accuracy one wants, more expensive the system will be. This cost is not borne by advertisers but by the broadcasters. Today, we have the 100% accurate, electronic measurement available and we have the mobile and manual diaries. We feel a combination of them is probably the answer because we might not be able to afford continuous measurement. Maybe we could have suites every quarter or twice a year. The smaller markets could have suites and the larger markets could have continuous measurement.
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