'Next level of growth in radio will come from non-metros'

In conversation with Campaign India, Nisha Narayanan, COO, Red FM, reflects on growth of the radio industry, the next 'phase' of its evolution, Red FM’s future plans and more. She also touches on the Supreme Court questioning the ban on broadcast of news on private and community radio stations, and says it is a step forward. 

 

In terms of revenue and share of advertising, how is Red FM growing?

 

Red FM has been growing at a very healthy double digit growth rate year-on-year, in terms of revenue. Metro and non-metro markets have contributed equally to this growth.

 

Be it metro or non-metro markets, we proudly say that in almost all of our markets, advertisers have been consistently showing faith in us and making us one of the market leader brands. We get the biggest share of local and retail category advertising revenues, proving that we are the preferred choice of advertisers.

 

Which are the strong growth markets for Red FM?

 

There are some cyclic trends wherein certain markets show lesser growth, and other markets emerge stronger. We are commanding high market shares in all the key markets. I have always believed that the next level of growth in radio will come from the non-metro cities, and the same trend was seen in 2013.

 

What are your expectations from radio phase III? Which markets or cities would Red FM plan to expand its base in?

 

It will help instil more faith of the advertising fraternity in radio as a medium, as the reach will expand to Tier 3 and Tier 4 towns. This will help brands penetrate semi-urban and rural India, reaching the bottom of the pyramid. I also believe that the government should give the radio industry a level playing field to compete with other media by allowing broadcast of news and sports, opening more frequencies and rationalising fees and other costs to promote the medium.

 

For Red FM, small cities will be important and we will focus on expanding our operations in these areas. However, we are still not very clear on when phase III will come in, and how the government will address the issue of migration of existing licenses. We can plan for phase III only once we have more clarity on these issues.

 

SC has questioned the ban on news broadcast on private FM stations. What is your view?

 

The Supreme Court questioning the ban on broadcast of news on private and community radio stations is a step in the right direction. It is high time we re-looked at the rules that bar private FM radio stations from broadcasting news and current affairs. Radio, being the most accessible medium, is in fact the most suitable for mass dissemination of news and information. Indian FM stations are an anomaly in that none of the private radio stations in the USA, Spain, Italy, France, Greece, Australia or most of the countries of the world are barred from airing news and related content.

 

News and current affairs are the most relevant when they are localised, so as to suit the requirements of a particular community, city, town or village. It therefore makes sense to de-regulate the Indian radio industry, as opposed to the restrictive phase III guidelines that allow private FM radio only to re-broadcast the news bulletins of All India Radio without any addition or modification. Surely, the 36 news generating units of AIR cannot cater to the local news requirements of over 200 cities that private radio is expected to cover in phase III.

 

At a time when all other media are free to broadcast news, including the digital medium where we see numerous news portals emerging every day, radio should also be evangelised a people’s medium, and not just limited to entertainment. The regulations that are holding back radio from reaching its full potential should be re-examined. In my view, listenership will only grow by allowing news and current affairs.

 

How has the communication for Red FM evolved? Have the marketing and communication spends increased?

 

As a brand, we have managed to keep ‘Bajaate Raho’ relevant to today’s needs. The last few years have been tough years for the media industry as a whole as brands have rationalised their advertising spends. Red FM is one of the few radio brands which has continued to spend on marketing to strengthen the brand, be it in the form of brand campaigns, BTL or Red Live concerts. We have in fact increased our efforts to build saliency for Red by looking at alternative and cost effective streams of marketing like Red Live, and it seems to have worked brilliantly for us.

 

Is Red FM eyeing the internet radio platform as well?

 

As and when the government policy allows us, we will be more than happy to broadcast Red FM online. Digital is one strong wing that any radio station today will have to eventually get into, be it streaming music or offering more differentiated products as an extension of the radio brand digitally. It is imperative for a radio brand to have a strong digital presence as the number of radio consumers in the digital space is growing.

 

Digital is the way forward and a leader brand like Red FM will be present in anything that the youth (in terms of age or at heart) consumes. The consumption of internet in India is growing every day, and Red FM believes in remaining in tune with the times.

 

What are the initiatives lined up for 2014?

 

2014 is the year of innovations for Red FM. Regional markets will be very important and one of the keys drivers of growth in 2014. As bigger markets get saturated, smaller towns will emerge with a vast potential which has not been realised yet. For Red FM, small cities across the country will be as important as Delhi or Mumbai.

 

In terms of marketing, we will focus on sharp, result-based activities. The marketing objective will be to have the brand deliver more value to both the listeners and advertisers alike, to make the brand more visible, build higher loyalty amongst listeners, focus on innovation and to grow our new verticals - Red Live and Digital.

 

Has Red FM revised its advertising rate recently? Are you considering it?

 

We increased our rates by almost 15 per cent in Sept-Oct 2013, and hence will be giving some time to stabilise these before announcing any further revisions. In a limited inventory medium like ours, pricing is a highly dynamic phenomenon. The festive season, for example, is the time when we are forced to revise the rates northwards, to accommodate servicing requirements and overcome the demand and supply gap. But even then, the process we follow is that of rationalisation rather than flat increase, so that advertisers have the option to choose the best from the offerings. Being the largest radio network, we offer various permutations and combinations of packages, which allows advertisers to get the best bang for their buck.