By Ananya Saha
The Confederation of Indian Industry (CII) organised the CEOs Roundtable on Radio in New Delhi last week, to discuss and chart the growth of the radio industry with the Phase III auction of the FM spectrum coming up, though dates are yet not out, and the ministry is said to be tweaking the loopholes. The conference saw private FM operators being critical of govt policies that did not allow them to carry news on their stations. The event also saw the release of CII- E&Y report – ‘Poised for growth: Fm radio in India’ (Read about it here: http://www.mxmindia.com/2012/12/fm-radio-will-generate-rs-14bn-in-coming-year-ey-report/)
- Prashant Panday
Amit Khanna, Chaiman, CII Committee on Media & Entertainment and Chairman, Reliance Entertainment, requested the government to encourage diversity in programming by giving incentives. He said, “The existing policy has created clones of same station and has stalled the exponential growth of FM that could have happened.” He also spoke about how the cost of reach of radio was much higher than the cost of reach of radio, thus pushing the FM operators to stick to mainstream genre of Bollywood music to generate revenues.
Prashant Panday, CEO, Radio Mirchi advocated multiple channels, 25 or more for cities such as Delhi and Mumbai for efficient usage of spectrum and diversification in genres. He pointed out, “FM gets only 40 lakh listeners per week. And daily only about 25 lakh people tune into FM. Why is that we reach 25 percent of population? The population needs variety, and we are often compared to TV when it comes to programming.” He also said that in 4-5 years FM radio will lose business to digital radio as consumer moves to internet radio. “The numbers are clearly growing. Saavn currently commands 10 million listeners. FM spectrum has finite life span. It is important to re-consider spectrum policy before broadcasting goes kaput,” he said.
- Anurradha Prasad
Anurradha Prasad, President, AROI and CMD, BAG Networks, opined that the all stakeholders related to FM industry are missing the larger picture. “We sell airspace one-hundredth of TV ad revenue. It is clear that nobody is taking it seriously,” she said. She pointed out how advertisers look at radio as a ‘bonus’ medium and not as a serious medium.
However on a positive note, Ashish Pherwani, Partner, Advisory Services, M&E, Ernst & Young, said, “Phase 3 is going to be imperative for growth of the industry. There are good things happening in the industry that will allow consolidation. Yes, it is important to extend licensing by 10-15 years. The lack of inventory is happening because of lack of licensing. But even then, one out of two campaigns currently use radio is a medium, even when ROI is not as well-defined in this medium.”
Uday Varma, Secretary, Ministry of Information & Broadcasting, began on a very candid note. He quipped, “If the industry itself is calling a 10-12% growth bleak, what percentage of growth will make it look bright? The industry in itself is not clear what it wants – whether it wants fast growth or slow growth. Of course, the business aspirations of the industry and national interest will not go hand in hand and meet, and it should not for good.” He also pointed out why there is a delay in the auction of Phase III licenses, “There was an issue of migration fee. The process and auction will be done in very transparent manner. There are trade-offs but I am sure we will sort them out with the industry and other stakeholders like TRAI.”
Mr Varma on a lighter note said, “If you as an industry player are sure that it will die, why expand at all? And if it is so, the government should re-look at the FM policy. We, as an industry, need to begin on a far more positive note. Of course, you cannot wish government away. There is a divergence of motive here – the industry is working for profits and we have to look at the working of the industry as a whole,” while responding to Mr Pandey’s statement that the FM industry will face the music the next 4-5 years. On the question of allowing private FM to air news, Mr Varma asked the industry to begin with AIR news feed and give it a time of 4-5 years.
The Secretary and Rajesh Kumar Singh, Joint Secretary) Broadcasting (MIB) assured the delegates that Phase III was on the top of their agenda. Mr Singh said, “My agenda was to get the Phase III rolling by March 2013. But we hope to work on the areas that cause concern and do it thoroughly.”
- Harshad Jain
Harshad Jain, Business Head, HT Media (Fever FM) said, “The market size is roughly Rs 12-1500 crore, for a medium (radio) that is absolutely free for the consumer. Compared to overall media industry, this is the fraction of revenue. The bidding cost for Phase III is unfair to the industry that is so small. While the numbers might look impressive when you see CAGR, the prices of this medium have actually declined keeping inflation in mind.”
Adding to the debate was Anil Srivatsa, CEO Radiowalla Network who said that the reserve price will deter new entrants into the industry. He recommended more frequencies with lesser space between two frequencies. To this, Wasi Ahmad, Advisor (B & CS), TRAI, responded that number of FM channels should be consummate to how many channels can a market absorb while Harrish Bhatia, CEO, My FM wished to make the industry more investor-friendly while pointing out “stations that are backed by news media houses should be allowed to carry news.” On an optimistic note Mr Jain of Fever FM wished that “radio industry becomes a $ 2 billion industry,” while Uday Chawla, Secretary General, AROI, wished for a level-playing field between radio, print and TV.
- Harrish M Bhatia
The panel and delegates also pointed out how the industry is facing the dearth of good talent. On a positive note, Asheesh Chatterjee, CFO, 92.7 Big FM concluded, “We are going to grow at 30% in Phase III when 245 FM stations would result in four times in inventory with more comprehensive spectrum. Radio is set for huge jump. The ad revenues are falling because we are selling cheap. We, as an industry, have to focus on good content. The growth and the ability to grow lies within us. We need better and concurrent movement.”
| A Must Read for every Professional in Media Industry ….
Extracted with permission from Authors of ‘The Advertising Mess’
Universe Projections and a well-known Listenership Survey The existing Radio listenership survey from a ‘credible and trustworthy research organisation‘has shown utter carelessness and total lack of responsibility which has hindered the growth of this nascent medium.
The listenership survey, which launched in 2007, used NRS 2005 universe estimates without applying growth rates for the intervening two years, which means its figures were two years out of sync with reality. This lethargic output was produced after charging humongous fees from the client for subscriptions.
Logically, in any such media currency, the critical factor is the ‘estimation of the universe’, which needs to be done as accurately as possible. This can be done by using the latest available census figures and applying the intermediate growth rate to arrive at the current universe, OR by using IRS figures (since IRS provides updated universe estimation by demographics on a quarterly basis.)
Moreover, this listenership survey continued to report these wrong universes for the next 3 years till the end of 2010. Not only was the universe underestimated but the radio penetration figures were also wrongly reported as compared to the baseline.
When this ‘credible and trustworthy research organisation‘ finally updated the universe in January 2011, some markets showed growth in population by 143% over the previous year. (Obviously, since for five years, the research agency had not bothered to update universe, now there was a sudden leap).
The basic demographics such as gender ratios changed almost inversely for male : female from 57 : 43 to 41 : 59, socio-economic classes observed stark differences. For example, upper socio-economic class demonstrated a drastic drop where as lower socio-economic classes showed significantly unrealistic rise over the previous year.
Conventional wisdom says that the demographic proportion takes almost one full decade to show the kind of change in proportion that this listenership survey showed in a single year. Such drastic changes in gender ratio were last witnessed during World War II, when millions of members of the male population were killed in a single year of warfare at the front. They cannot radically change in just one year.
Can we expect such blunders from an organisation which is looked upon as the ‘Messiah’ of media research in India? Unfortunately, YES.
Such are the follies of these surveys which are unfortunately highly respected by the industry and form the basis on which most of the MarCom investments are made today.
Different methodologies lead to different results with disastrous consequences (Diary v/s DAR) Different methodologies for the same objective appear to provide different results in research surveys. Each of these methods has their own disadvantages and advantages and that includes how the market perceives them. The different numbers emanating from the usage of different methodologies mean different opportunities to advertisers, broadcasters and agencies for revenue impact, visible return on investment and content formulation.
Obviously all these methodologies cannot be giving the accurate results. Let’s take an example of MRUC which started India’s first radio listenership survey, ILT (Indian Listenership Track). MRUC had conducted a research to evaluate which methodologies out of DAR (day after recall) and Diary were the most robust and with minimum error. It was found that DAR reported a 55% inaccuracy, whereas Diary reported 85% inaccuracy.
Post the results of these findings, TAM media research released the first round of Radio Audience Measurement with Diary methodology, pitching hard for real-time capturing of data.
The radio station which according to ILT was the undisputed market leader for two consecutive years, suddenly dropped to number four position according to RAM, whom do we believe ILT or RAM? Further, this discrepancy occurred when there were only a total of 7 private FM stations available. The question is whether real time capturing of data (Diary), which was developed to overcome the inaccuracies of the previous methods (DAR), truly presents the actual picture.
Another example which can be looked at is a famous radio station which recently converted from 100% Hindi content to 100% English content in Mumbai. When comparing three months of Hindi content (Pre-Launch) with 3 months of English content (Post-launch), the existing listenership survey conducted by a ‘renowned media research agency’ reported NO significant changes in either demographic consumption of the station across age groups, gender and socio economic class OR in tune-ins and time spent. On the contrary, lower socio-economic class showed growth for 100% English content for the same radio station. This either shows that all listeners are deaf or it shows how real time capturing of data could mislead due to some lesser known reasons or leakages in validation process or it shows that the data capturing and analysis are being done in a thoroughly unprofessional manner. Or could it be that there is a short-coming in the methodology itself and that fresh, new methods are urgently needed?
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