Private radio players remain upbeat despite the elusive case of Phase III auctions

Private radio operators did not have an easy time in 2013 owing to a number of unresolved issues such as FM Phase III auctions; however, the TV ad cap issue did push advertisers towards radio

e4m by Abhinna Shreshtha
Updated: Dec 31, 2013 10:45 AM
Private radio players remain upbeat despite the elusive case of Phase III auctions

The radio sector is still waiting for a final resolution on migration to Phase III, even as the existing licenses will start expiring by 2015. Despite this, private radio operators that exchange4media spoke to arestill upbeat about the year.  Let’s take a look at some of the key happenings that defined the radio industry in 2013.

The elusive case of Phase III auctions
Private radio operators were hoping for a resolution to the migration quandary, but the issue has got delayed once again. Operators now hope that the Ministry of Information and Broadcasting (MIB) will bring clarity (and the auctions) sometime early in 2014. Primary among the concerns are clarity on the migration fee and the actual process of migration.

Ravi Nair, Director – Programmes for Kerala-based Radio Mango remarked, “There was a lot of anticipation that the Phase III auctions would finally happen this year. I think most private operators spent the year consolidating their business and preparing for the auctions in terms of arranging funding. However, the bidding has still not happened.”

The frequent delays are worrying operators since their current licenses will begin expiring from 2015. Earlier in December, the Telecom Regulatory Authority of India (TRAI) invited radio operators to share their views regarding the proposed migration to Phase III of FM broadcasting. An open house to discuss the suggestions is expected to be held early in January 2014 and operators hope that it will speed up the auction process.

Private operators still banned from airing news programmes
This has been a bone of contention between the Government and private FM operators for quite some time. A PIL has already been filed by social activist Prashant Bhushan this year regarding this and the Supreme Court has also questioned the Government regarding the existing ban. As a sop to operators, the Government has provisioned that they can carry “unaltered” AIR news content under Phase III, however, operators are far from satisfied. “In the current form (as offered under Phase III), it does not make any sense. News is available across all media, so why is the Government targeting only radio?” asked Ashwin Padmanabhan, National Head, Big FM.

Nair also agreed that the Government’s argument that radio channels are not mature enough to carry news content is weak. “We need more licenses to operate than even TV channels, so no one can be irresponsible, no one wants to damage their image,” he said. Sooner or later, the Government will have to end its monopoly on news on the airwaves, but for now the wait continues.

Radio operators invested in innovative content
An important change in operator and brand outlook towards radio was the recognition of the importance of content. Nair agreed that clients have realised that radio is not just about reach, one needs to also have great content as well. According to Padmanabhan, a new trend in 2013 was investments being made in creating daily shows as well as branded content, which he sees becoming a major trend in 2014.

Radio showed strong growth in non-metro cities
This year, too, radio witnessed strong growth in terms of ad spends and popularity in non-metro cities. Earlier this year, My FM, which operates in Jaipur, Chandigarh, Bhopal, Ahmedabad, Indore, Amritsar, Nagpur, etc., hiked its ad rates by 20 per cent due to high demand for its inventory in non-metro markets. Even operators such as Red FM had announced a 20 per cent hike rates across all cities, including non-metros, and this strong performance in non-metros continued throughout the year.

“2013 has been a good year. Metros did better as compared to last year. Tier II and Tier III cities have also been doing really well. I have always believed that the next level of growth in radio will come from the non-metro cities and 2013 was a reflection of this,” commented Nisha Narayanan, COO, Red FM. According to Nair, ad rates for cities such as Kochi were almost at par with the metros.

TV ad cap issues pushed advertisers to radio
Private radio operators saw a lot of first time advertisers in 2013, along with the usual suspects – telecom, FMCG, retail, etc. One reason for this was the ongoing ad cap issue in TV, which caused advertisers to look at other options. “We have seen some categories such as TV shows increasing their spending on radio and I expect some others to do so too. What we saw in 2013 was that some brands which earlier did not believe in radio have started doing so after a few campaigns. They have realised the advantages of radio, like it is customisable, you can regionalise it, and so on,” said Narayanan.

Padmanabhan added here that the radio sector saw significant spends from the SME sector, especially in the last four months of 2013. According to him, the ad cap challenge has led SMEs to look at radio as a serious medium when it comes to providing reach.

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