Radio's Battle For Relevance
Insights on the state of the Radio Industry
In Episode 4 of The Media Room, media expert and author Vanita Kohli-Khandekar speaks to 2 experts, Yatish Mehrishi, Chief Executive Officer for Entertainment Network India Limited (which owns Mirchi, India’s largest radio brand) as well as Shrikant Shenoy, Associate Vice President at the Interpublic Group to discuss how Radio in India has been boxed in by regulation, the reach and impact radio has today and what are some of the changes the industry is now seeing. Tune in for insights on why the Radio industry is suffering from impotence.
NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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TRANSCRIPT
Vanita Kohli-Khandekar (Host): Radio seems like it is in nowhere-land. Even as listenership and ad volumes rise, revenues dropped from Rs 3,100 crore in 2019 to Rs 2,300 crore in 2023. Radio was, in good years, anywhere between 3-5 per cent of total ad spends. Now it is just about 2 per cent of all the advertising money spent in India. Think about it – India has almost 867 commercial radio stations – this includes All India Radio and Private FM stations. And all they made is Rs 2300 crore in revenue. It is the smallest part of India’s Rs 2.3 trillion media and entertainment business. Radio reaches just over 260 million people way lower than TV which is at under 900 million or digital which reaches 524 million Indians. It has been, therefore, a constant fight for relevance, for radio.
To talk more about this I have with me two very good minds. Yatish Mehrishi is the chief executive officer for Entertainment Network India Limited which owns Mirchi. Mirchi, is India’s largest radio brand with 73 stations in 63 cities and is owned by the Vineet Jain Group. Since it is the largest, ENIL is also a great proxy for what is happening to the radio business. My other guest is Shrikant Shenoy, associate vice president at the Interpublic Group, which also owns Lodestar UM, a media agency.
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Vanita Kohli-Khandekar: Hi Yatish, you know one of the first questions I wanted to ask you is, who's listening to radio these days?
Yatish Mehrishi: Yeah, this is a good question and I expected this to come because you're discussing radio, the oldest broadcast medium. But Vanita, contrary to whatever people say and we are in Bombay, we think we are the early adopters, everything is digital, it's not the case. And I'll tell you some data because we live in a digital world and people talk about data.
So when I took over about two years back, we started recording numbers of people who call us. Because radio is an interactive medium, when jockeys speak, radio jockey is like an unknown friend, you know, he's a companion when you drive back home and stuff. So a lot of people interact when you ask a question, when you run a contest or anything.
In the last four months, we have got 6 lakh phone numbers in 22 cities. Now if you look at, and I've been a marketer myself and Srikanth and Vanita, you have written on media measurements, any leaflet you do on a newspaper, it's about 0.5% of people read, you know, the number of newspapers you do. So now imagine if people call, how many people call, you've been consuming radio for 20 years, how many times you have called a radio station?
So the people who are calling are active listeners. But if I was to just extrapolate this number of 0.5% or 0.25% in 22 cities, we are present in 63 cities and this is, I'm just saying, I'm not even talking about the entire radio network, you know. If I just do that number, it comes to about 40 million people listening to, which is higher than the last IRS recorded in 2019, which was 32-33 million.
So contrary to the belief that people don't consume radio, radios are alive and kicking about it. It's not that. Yes, the audience consumption patterns have changed, but that's more to the media thing.
So it's not that people are not listening, habits are changing and Vanita, I didn't do this for sales, we did for music changes. You know, earlier we used to play Hindi heartland music and you know, all Hindi markets say music, though everybody knew India is multiple countries and every city is different, but we realised the music consumption was also different. The people listening to radio stream are different.
So to give an example, Bombay, 70% listenership happens in cards, 65% nails. When I look at Guwahati, it is less than 25 years of age, so it's maximum 65% of people listening are 18-25. So now I have a music which is very different in Guwahati and in Bombay.
A music very, very different in Bombay and Delhi. Earlier our music used to be same in the Hindi heartland or the Hindi speaking stations. So that resulted into change in music patterns in our content strategy, in our jock hiring strategy.
And when I look at this listenership, it's there. It's just that in the hulaboo of, you know, big streaming world and we all are, I would say, the culprits as well as early adopters who talk about streaming world so much that we don't look at radio on the side. The business has shifted.
It's more retail. It has to be like the radio is a hyperlocal medium. So to give you an answer on that, it is alive and kicking.
People are listening to radio. Yes, the consumption habits have changed. It is no longer, maybe the TSI would have been lower but that's true to any video medium.
We are living in a short form. The behaviours have changed, the media consumption times have changed. The time consumption has completely reduced.
So we are fighting that world. We are fighting double screens, dual screens and good part, radio has always been a passive medium. Unlike you watching a TV which was active appointment, now you have a phone in hand.
So it becomes, TVs also become passive. But radio was always a passive medium. It was always a frequency builder.
It is still the last mile consumption medium. You go anywhere, you're still listening to that. That's the last mile advertising medium.
Apart from one odd outdoors, you can talk about it but still the last mile medium. So I don't think people are not listening. Yes, people are listening to it but with every medium it has its own challenges.
So we'll talk about the challenges but to address the elephant in the room, people are still listening to radio. Important is to look at the data differently and look at it also.
Vanita Kohli-Khandekar: You're so right because this is something I face when we talk about newspapers, when we talk about television you know. But the fact is, all media coexist, their shares and their importance and the role they play in a consumer's life keeps changing. That's my take.
Even in the US, when newspapers have fallen hugely, it's still there. It's still 21 million copies are sold you know of newspapers. Shrikant, I want to bring you in here from the media investor, media agency perspective.
You know, there is a lot of talk about the relevance of radio as a medium. Where do you see it in the ecosystem and we'll come to the finances later Yatish at some point and the size of the medium. But where do you see it in and it is a completely ad dependent medium currently.
Where do you see it in the media ecosystem? How do you view it as a media investor?
Shrikant Shenoy: So radio continues to be a really important part of the mix for our advertisers and when we look at it you know as a medium, we see what is happening in the medium itself. Like we hear a lot of talk about traditional media dying but I think one needs to look a little closer and see where the real drop is happening. Probably TV and print is where there's a huge bit of churn within the TV ecosystem itself.
There's a lot of churn in terms of connected PV, HD PV, various other platforms coming into the picture. Print also is undergoing a challenge but when it comes to radio, really that's one traditional medium that has held its ground and really there's no real challenger to it in a sense. The medium still is very attractive the way it is.
It's seen in the kind of market shares. So around 2% market share continues to hold from a longish period of time. So radio continues to be what it used to be for advertisers.
We see it as a medium that is extremely important when it comes to say driving frequency that's well known. It is a great frequency builder. It is something that is relevant to advertisers across the board.
Like we see traditional TV playing a big role for FMCG brand or print playing a big part when it comes to auto. No launch is complete without the full page ad. But radio is one medium that has been able to adapt itself to all kinds of advertisers and needs.
Whether it is auto which continues to be a growing part of the radio advertising ecosystem or if one looks at local advertisers like coaching classes, training institutes, which also is an important part of the radio advertising mix or you know regular impulse categories which continue to advertise on radio. It seems to have found a place in every advertiser's mix. It is an extremely versatile medium.
We continue to use it as we have always been doing ever since media existed as a great frequency builder, a great place to drive engagement because we see that you know we've successfully used RJs to drive a lot of engagement for our advance. So we've actually used them as influencers doing things like test drive with an RJ where the RJ actually drives the car across town and posts it on the social handle and amplifies it and that gives us a huge amount of mileage because RJs have a really strong connect with their listeners. They have a strong following and that's something which I think not all brands have yet tapped into in this whole influencer age.
So definitely as a medium for engagement, for frequency, it continues to play a great and important role in the mix.
Vanita Kohli-Khandekar: Would you be able to share which brand that was for the RJ driving the test drive?
Shrikant Shenoy: That was the most, I mean we've tried it for many but Tata Nano was one brand where we actually used this quite extensively. When it came to taking our brands to smaller cities like say Surat, we actually used the RJ to drive around town because you know it's very difficult to get engagement through digital and at that point of time digital was not what it is today. The RJ was the only one who could, who had that local connect, who actually knew his listeners, some of them one-on-one.
The kind of engagement we got at that point was tremendous. I mean whatever the product may have been, that kind of lift we got in metrics through RJ engagement was something we couldn't really get through other kinds of regular media activity. So it was extremely useful for auto and we continue to explore ways to drive that connect for other brands as well.
Yatish Mehrishi: Because you're talking about auto, we just did for Mahindra electric vehicles just recently. So we're talking in today's time also for Mahindra, the two latest you know the wow electric vehicles which Mahindra has launched, the RJs were doing the same thing. So it continues to be used as in fact they were the oldest influencers in today's world, if there's a marketing company where RJs have been the oldest influencers in those markets.
Vanita Kohli-Khandekar: Funny how everybody is being called an influencer today but they're doing their jobs and RJ is doing his job or like the VJs. But you know it's very nice to hear these views because there are a whole lot of questions in my head and you know over the years whenever I've written on radio this we are still at two percent of ad spends and I think post pandemic the fall in advertising value we have recovered somewhat. I think we were at our radio was at about 2,300 crore in total advertising revenues from I'm going by e-buy numbers.
It's roughly two percent of ad spends that's where it has been. I think it fell from over 3,000 crores so it's recovering. I think this year we are hoping it'll be 2,400 or 2,500.
Why has the medium not expanded and Yatish you and I have had a had a conversation on this. You know last year there was a some recommendations were made to the Ministry of Information and Broadcasting on making it mandatory for FM receiving. If I was to take the last IRS figures, Shrikant you're more familiar with them and I just take a five percent jump in listenership.
We're talking roughly 260-270 million listeners, correct? But it should be much more. You're talking about a smartphone population of 650 million.
Just I'm talking smartphones. I'm not talking because FM receivers could be on all phones.
Yatish Mehrishi: Not all phones. That's the biggest Not all phones.
Vanita Kohli-Khandekar: Okay, now you have to explain this to me. Why are we not at a better number on reach and revenues and Shrikant I want you also to jump in on the both these questions.
Yatish Mehrishi: So I'll address both the questions on the smartphone. That's a challenge which I said I'll come back to on that. But on the numbers, why not going up?
There are multiple things. A lot of money has gone to the digital world in the last 10 years. Initially people thought brand but now if you look at business, everything is going towards performance marketing, correct?
Because the CFOs are asking results on that. So look at three points. One in the last two, is post-COVID world.
Because the business is not doing well, everybody was looking at profitability. Clients put pressure on agencies. The agencies put pressure on publishing houses and the prices crashed.
So if you look at the yields which have crashed, the volumes are still very high. The yields have crashed from, it's still 25% down pre-COVID levels, which is a very, very sad story. Even though the listenership is going up, the number of clients are going up, but the yields are down because the companies and clients are putting pressure and they have pressure.
Because if you look at last three quarter results also, profitability is doing well, revenues are not growing. So people are cutting costs and making monies. It's not the natural growth of revenue growth and results into profit.
So there are pressures on agencies. Agencies are fighting to get clients and they are putting yields for each publishing house. I'm watching radio, it's across the board and we talk to all agencies.
They are also facing the same pressure because the clients are putting immense pressure on the yields. So yields are down and that's one reason the industry is not able to grow. I was with Urban Fashions three years back.
A lot of brands are forced to spend monies on e-commerce, like 3%, 5% as a marketing service. So a lot of, and that's, it's just for listing. I'm saying a lot of money, you'll keep hearing with commerce saying thousand crores advertising revenue.
It is a zero-sum game. It's not going to be like, this is additional monies coming there. Some money is going to go out.
So that is what is happening. So the brand building money is completely stopped. It is largely moving towards performance marketing, economy, and the company's earnings not being so great, the revenue not being so great.
So there's a cost cut pressures and that's the reason the yields have gone down. Even the behaviour chain where we say, you know, and people say we are a very small medium, we don't do radio, it's fine. But let me get, everybody's talking about that influence, everybody's talking about that e-commerce side, let me do a performance marketing spend.
So that is where the spends have gone down on radio for the last four years and not coming back. To give you perspective on volumes, we are higher than pre-COVID levels. Number of clients are 15% higher than pre-COVID.
The mix has changed from corporate to retail. Now you also know corporate will spend more amount of money when a Tata does a campaign. The amount of money they will spend compared to a soft front in a smaller city will be very low.
The rates will be a little different. So because it has become a retail skewed earlier, pre-COVID, it used to be 50% corporate, 50% retail business. Now it's become 70-30.
70% retail, 30% corporate. When you say corporate, you mean national advertisers? National advertisers.
With a national footprint. Yes. So when you look at national advertisers have gone down, they have moved toward digital and not just digital, they're not digital ad sales, they move to digital performance marketing where the monies have gone by.
That is the reason the industry, traditional mediums are not able to grow because the yields have gone down. It's not the volumes are low. The volumes are still high, the mix has changed, the type of clients have changed.
So that's where the business has struggled on the ad sales revenue. And for that reason now to compensate that people have started doing events, activations, using influencer marketing or we'll say doing multimedia solutions. Every traditional medium is now doing brand solutions.
You can call it multimedia or brand. It's to compensate that because everybody's fighting for the same amount of money type of stuff.
Vanita Kohli-Khandekar: That's why people are dropping the word radio from their companies. You guys did it I think in 20 or 21.
Yatish Mehrishi: Yeah we did just for post-covid.
Vanita Kohli-Khandekar: HT did it last year if I'm not mistaken. So that's why and I think roughly what, half your revenues are non-radio now?
Yatish Mehrishi: For us because we took over Ghana, so now yes 50% that was my target three years back to make it 50% radio, 50% non-radio and be true to the company's name of entertainment and become an entertainment company rather than a radio company. So yes now we are at 50% radio and 50% is non-radio which includes Ghana also.
Vanita Kohli-Khandekar: Gaana and you also create content for streaming programmes.
Yatish Mehrishi: Yeah we do content for streaming platform. We do almost 300 events a year. So we do a lot of events, branded content.
Vanita Kohli-Khandekar: I'm going to come back to them but Yatish what you have talked about is lower yields basically coming from lower rates and Shrikant I want to bring you in here because we'll address the reach question because the thing about smartphones and why more people don't have radio but Shrikant where are we on CPMs or the cost per thousand for radio and why are they lower? Is it because it is treated like a performance orientated frequency medium? I mean as a media investor where do you come in on that?
I mean you are the guys who are pushing down the rates.
Shrikant Shenoy: So right see radio remains the most cost-effective medium and there's no doubt that when it comes to getting great ROI video remains the number one medium. So in a sense that has not really changed from what it used to be. We still see around say on an index of maybe 100 for radio, 100 for TV.
You have radio coming in at about 80x, 70x or so. So clearly radio remains one of the most attractive mediums for advertisers and it continues to play that role. However when it comes to television they have been able to successfully reinvent themselves in the sense that the kind of properties one can look at investing in on a television like cricket for example has been really successfully packaged as a great viewing magnet getting you a great amount of reach though at high cost but the kind of impact and the kind of lift it delivers across metrics whether it is awareness or concentration or you know getting a quick visibility in a short period of time. That kind of excitement is something that in a sense television has been able to achieve through a really aggressive promotion on the part of these broadcast networks.
So something of that sort that kind of a redefinition and a kind of aggressive push is something that we've seen more in the TV space than in most other mediums. I think that's one big reason why it's difficult for radio to make space because it's starting out with a huge disadvantage because TV has always been seen as the numero uno medium as the medium which will deliver you that pan India coverage and in a way they've been able to successfully reinvent themselves as I said through properties, through connected TV, HD TV, great viewing experience. So there are some inherent built-in advantages of these other mediums which make it difficult for others to grow in a sense.
So I think the fact that radio has been able to hold on to that two percent share is in itself creditable. I mean I think that itself is something which would be very difficult in today's environment where you know advertisers seek newness and everything. I mean for example out of home as a medium has also been able to hold on by in a way reinventing itself with digitisation.
We call it digital out of home now. That is in a way help them drive greater share of the pie. Somewhere maybe radio also needs to do something to reinvent itself if growth is something that we would expect to see.
But as I said even holding on to that two percent is great and we see the volumes month on month we track and we share with our clients what's a ship and we see radio continuously holding on. This advertisers like auto have continued or services finance these are categories which continue to invest and believe in radio so that is a great class going for it.
Vanita Kohli-Khandekar: You've addressed like four questions which I have for Yatish coming in but essentially Yatish programming has been a big problem for radio because your licence conditions from right from the word go from 2000 onwards have a walked your revenue structure because your licence fees were crazy. In every phase of licencing the industry has paid out more money than it has made in revenue in that particular year. So that has been one deformity.
And also you're not you know I don't know why news was not allowed it's still you still have to take 20 you can do 20 news but it is you have to take an AIR feed you cannot do news on your own. For a medium which is so local not being able to do news is a huge handicap and then there is I don't know why spoken radio. So if you're talking about a market we're doing a podcast right now.
The fact is podcasts I don't know how good they are as revenue generators but podcasts have taken off in India in whatever small form. Why have there been not more variations in programming formats on radio with due sympathies for the licencing conditions in place.
Yatish Mehrishi: Yeah so you see you touched on the right but the thing has been there has been licencing conditions news current affairs and sports has not been allowed. You can't touch upon sports a cricket commentary is allowed on all India radio but not on FM radio stations. Now just look at in Bombay you not have the frequency of all India radio in your car.
If listenership is happening in car and if I want to listen to a commentary you can't because it's not allowed. You're not allowed to be in current affairs you're not allowed to do news. So their restrictions makes you just to play music.
I can innovate on music formats and people have done. If you look at competition done a story format because like a podcast only and it was built on stories. Our longest trending content is Sunday suspense in Calcutta.
If you are Bengali if you listen to it people vouch by it. It's been running for last 10 years so it's been the oldest podcast form. It has been going on but you touch it right because we are an ad funded medium there is not much ad revenue coming in.
In podcast you can do more podcast but there is no monetization visibility. I see what you get on radio per se right now. So it's not that we have not tried to innovate we have been bound by a lot of restrictions on the type of content we can do.
So we are supposed to do only music related content and with the business going down and we don't have multiple frequencies in many stations. We tried that in the phase 3 when we took you know multiple frequencies in top 10 cities to innovate on that that you know the second radio station will innovate on that but COVID happened demonetisation happened the business didn't take off the yields have gone down so you're not able to innovate on the second station. Everybody just has one frequency so they will go towards the mass media what mass wants is music.
You know all research says when people come to listen to radio it says they want to listen to music. Maybe that's what we have already only offered and that's the reason they are saying it or even if I do it because I don't have any the medium and the business is right now not growing as it used to grow 10 years back people are limited to innovation and subject to the three conditions also not even to cover news current affairs sports or anything even for that matter when you have ICC or BCCI comes with guidelines of even doing a score update that you can't do a live update. You know you have to do a deferred update of this is the score right now so you can't do as the wicket falls if radio is a media which is a live medium in India Pakistan match and a Babar Azam gets out I can't tell him that you know it's his out I'm ready to break the song and give a breaking news like a TV or a news channel but I'm not able to do that it's not the intent it is just that you're handcuffed on both hands and so you're not allowed to do this.
Vanita Kohli-Khandekar: That is why there is so much talk of so you have your Gaanas and your spotify's for streaming music you have video streaming you have podcasts happening but you have this it's a very anachronistic situation to be in you are a audio medium but you are limited to one genre of audio programming so let's assume that it is going to be only music where are we on increasing reach overall reach why have we not been able to progress there?
Yatish Mehrishi: If you ask me what is the biggest challenge I think people are still consuming right advertisers using it like real estate the politicians are using I'd say election advertising is always at highest level type of so you look at any elections I think red box is the best medium type of thing so you're not worried about people not listening my worry in the future is these smartphones and that's where we spoke about earlier also about Ghana these smartphones the problem is any smartphone which is more than 15,000 rupees doesn't have an FM tuner so that listenership even if I want to grow the listenership my worry is going to be the hardware the software is not a the problem is the hardware where in our homes the transistors have gone by no longer you have the music system with the cassette system no longer they are there yes Saregama helped I think thanks to Vikram of doing Carva and FM radio the bluetooth speakers come with FM radio so that is a delight on that part but the biggest consumption which is the mobile device which has become the you know the device of all that's the core device everybody has IOS Apple has not been having FM tuner from day one any range of phones smartphone more than 15,000 doesn't have this is where the key issue lies for FM radio listenership to grow the day all smartphones have FM tuners again the listenership will have a different flip so it's not that people are because you don't have consumption and my office used to be 10 minutes away I had to buy a radio set in my home to listen to music because if I don't have my distance was 10 minutes or now it's half an hour I can listen only in the car where am I going to listen because if I'm using an Apple phone I don't have a consumption device so the issue the challenge is going to be the hardware and not the software we are doing really well in fact to give you a thing we were proud receivers of a president's award for voter awareness in Delhi we were the only media to get that award of voter awareness it's not that we only participate in we won the award but not just radio stations print television everybody so the medium is effective media people are listening to it the challenge is going to be get the hardware and we are thankful to the TRI who recommended again the recently the TRI commission have come again that FM tuners have to be mandatory in all smartphones that was
Vanita Kohli-Khandekar: September last year I remember it's come again recently again has it become policy or no no so they have mandated
Yatish Mehrishi: they've given a given an advisory they're not mandated there is a discussion which are going on between media and luckily for us now the ministry is same so we have representation going towards the ministry that it should happen in times of calamities even a telephone network doesn't work everybody works you know it has been a proven model across globe when a flood situation or Hawaii flood happened or any fire happened the radio network works the best it's the simplest medium the easiest medium and if FM tuners are available on smartphone people are able to communicate that so that's the biggest challenge Vanita we have in today's time to grow the listenership the listenership as long as it is there wherever it is there people are consuming it if we can get the smartphones thing going up that will be much higher
Vanita Kohli-Khandekar: you know speaking of listenership one of the issues Shrikant has been the non-availability of metrics you have for the four metros and I think IRS hasn't been done since 2019. 2019 was the last numbers we had does that ever impinge on the way you look at the medium and also a lot of the advertising like Yatish was saying is local now you're talking 50-50 now Yatish or more no no pre-covid is 50-50 not 70-30 so is that a lot of this advertising doesn't go through a media agency is it direct advertising I'm just curious Shrikant therefore does that change your perspective of the medium
Shrikant Shenoy: so talking of the measurement challenge actually we don't really see it as a challenge because it's not something that advertisers had ever been used to even ever since radio started it has always been say television or digital which has been the mediums which have traditionally been in the focus of the measurement space and when it comes to the current day I think things have gotten a lot easier because there are a lot of substitutes available we do our own proprietary research called connections where we measure pretty much the same things that a TGR and IRS measures in fact we go one step further going beyond reach to effectiveness in fact the impact of radio across the panel like we can see how radio works at the top funnel median versus mid funnel and bottom funnel so that gives us a very real and implementable kind of a metric to work with like we see that radio continues to be a great top funnel medium it ranks among the top 10 right up there we have also been able to see that there's a small shift in terms of engagement where you know people are moving towards slightly higher listening as in they listen for more time than they used to so clearly the engagement levels have gone up I mean it could also be a factor of people being stuck in their car than traffic and simply listening more but whatever it is there is more engagement we see how it is different versus a podcast where a lot of the younger audiences who like snackable content maybe just 10-15 minutes that's where the shift is going towards so all of these metrics are there they are available further we do a lot of modelling now modelling has become extremely easy you know there are off-the-shelf modelling solutions which many of the large digital tech giants have say google has its own system which is available for free we have our own proprietary system called interact which allows us to do modelling even for the smallest client with the minimum of metrics because we use other surrogates to fill in so it has been able to isolate
Vanita Kohli-Khandekar: what is the impact of each medium on the result set the metrics that purchase or consideration on the top funnel bit just to interrupt on top funnel bit can you just give an example to my listeners on what category where you think it works well as a top funnel middle funnel bot...
Shrikant Shenoy: so you know when it comes to doing our auto launches and we've been handling all the top auto brands like Tata Motors Mahindra as Yadish said the video has been an indispensable part of the of the mix so whether it is the launch of the say of Mahindra Athar or the new electric vehicles they are putting out you will see radio in the plan whether it is in the form of sports or RJ engagement it is almost part of the auto launch grammar so to speak that you would have there will be a full page ad there will be radio there will be a certain number of things which are definitely there for that kind of an audience which we may look at radio as a passive medium but there's this very strong impact in terms of branding when it comes to say in-car listening where you are talking to the very audiences that you want to finally talk to i mean upgrade your car and move on to a better car that makes it a great medium for say a category like auto needless to say when it comes to FNCD also it works well in a different way i mean there it could be more about reinforcing and driving the the top of mind recall so that when it comes to the point of purchase it's the one brand you think of so i think it's an extremely versatile medium
Vanita Kohli-Khandekar: but Yadish you mentioned more performance marketing the examples that Shrikant is sharing seem like more like brand building recall Shrikant do you see it sort of veering towards or it's all users i'm just curious is the medium more about because you said frequency and i would have thought that would mean more about recall and awareness but Yatish is talking performance marketing
Yatish Mehrishi: no what is that what i meant was people marketers are spending more money towards performance marketing on digital not performance actually on radio per se yes radio works really good for test drives you know to get people to the shop to the showroom radio works a great medium to look at a test drive to get footfalls to your showrooms be it an apparel be it auto and all when i meant performance marketing i was saying the budgets are moving towards performance marketing on digital rather than brand building people are not spending as much as they used to earlier compared to it right now so auto is a great example real estate is a great example where real estate because it's a last mile thing and when you touch measurements and i'm just adding up on that the cars have gone from 30 million to 60 million there are marketers who are asking for measurement when there is measurement available they know that they complain about traffic and that's what they're listening to radio but when you come to spend you know the first question you answer who is listening to it you are listening to the cars but you are asking me data point and as i said i give you the six lakh if i was to give my own data people do not believe it they would want a syndicated research but our same data coming from a digital large tech player would be like a bible
Vanita Kohli-Khandekar: i've had this conversation just recently with Girish Agarwal he says google you guys accept it but for tv and print and everybody you want a proper metrics you know but this is a different conversation and Shrikant i'm going to invite you again for this on this whole issue of metrics which is bothering me as a writer more than anything else Shrikant sorry i interrupted you you were talking about how it works across the funnel for different categories
Shrikant Shenoy: yeah so what we've been able to see through our research and we you know done a study of some 10,000 brands using leveraging our global network to see what is it that drives say visibility and say variance what we call it in the sense of embedding how strong the brand is able to derive or you know amplify itself leveraging local cultural levers that's something where we can identify what's the role that the television is playing versus the radio versus out of home and so on and we see that radio's role is definitely strong there also in fact we've been able to bring it down drill it down to a brand level not just at a category level and we see that every brand's dna definitely has a strong contribution of radio in it so you know then we've got metrics had accurate as that through the help of modelling you know you don't really need a ram anymore i mean ram definitely needs to be there out there in the industry for the larger good of the industry because not everybody has access to modelling tools so definitely whatever ram is doing the four metros is something which is good but i don't think we are missing it really and when it comes to larger and smaller advertisers well we have a mix of both we have a lot of local advertisers also like say we have an office out there in chennai where you know a whole lot of local retailers jewellers coaching institutes are part of the mix and we're able to in a way recommend radio for multiple reasons not only through our experience across other brands but also through the kind of feedback that these clients have from their own networks many of them their customers their staff vouch for the effectiveness of radio their loyal radio listeners i mean as much as a newspaper is part of the morning routine so also radio certain programmes certain shows certain rjs are very much loved and liked in these local markets and so there's feedback from the client as well that you know definitely let's look at some presence on radio as well so i don't think metrics is really making much of an impact or affecting our investment in video to a large extent
Vanita Kohli-Khandekar: yathish if i was to ask you what are the two or three things and you can answer this from mitchie perspective or from an industrial weapon i i for me mitchie is like a great proxy for the industry because you're the largest 63 stations i mean and you've had it right from the beginning even in 98 when there was no private i mean times was the guys who had that band on air which is to run the fm station so what are the two or three things that are needed to get radio to a position that it deserves as a medium because it's a medium with if i include air you know you're talking about a medium with almost over 90 reach and if you're talking about growth coming from small tier two tier three towns so i mean mediums potential is obvious so what are the two three things that you think are needed whether it's a policy level whether it's at an industry level or at the company level
Yatish Mehrishi: so two three things uh i'll just touch first what the industry needs to do industry needs to be true to the medium of playing more music and less ads and it's a double whammy because if you if i reduce number because the yields are down you're compensating by playing more ads so that's not right as an industry there are some players who play immense number of huge number of ads that become like a classified station rather than a music station so from an industry point of view i think people need to really really look at and be true to the medium that you should play what do you the print used to call the ad edit ratio even in radio stations the music to add ratio needs to be really really looked at what is it currently so on an average it's right now 10 minutes but it is superficial because some stations can go up as high as 30 35 minutes in an hour you're going to play 35 minutes of ad or 40 minutes of ad in an hour during festivals you're not doing just to the medium you're killing the medium before even the people are killing it because you're not coming to listen to ads on the radio station from an industry point of view i think even if there is no code from the government of the added ad music ratio people need to sit together and get that right because you can't kill the like that because that's number one the jock content can look at the type of audience you can do so when i said bombay is 70 percent in cars 65 percent male if i can talk more on finance you know address to the audience don't do what you want to speak to it if you can do that that's an innovation the jocks can bring in you can't have the same jock in doing the same stuff again and again again and again you know so that what the change is the industry level we should be looking at for most important is the music part coming on the external stakeholders yes that era is recommended been for last one year now we need the government to support us on allowing free things which is news current affairs and sports it will help us a long way the second is as i said the most important for me which keeps me awake is the fm tuners in smartphones because that will give a biggest flip to the network to the industry because the listenership will keep going the third is we need to sit with the music industry labels to understand how do we stream radio on digital globally radio stations are allowed to be streamed on digital media because the licencing are so high the music licence so high you are not able to stream the radio stations on a digital network so even if the smartphones are not there just imagine if i had a digital app and i could stream it i don't need a gana or a spotify to do it or i don't need a smartphone then i'm there as an app i don't need a fm tuner so if that was possible then the medium's longevity will also be there you could start measuring it because it's a digital medium what people you could do performance you could do banners you could do a lot many stuff and that part you know if you go back to us clear channel 850 fm stations are available online we are not able to do it
Vanita Kohli-Khandekar: what holds it back is it a regulatory thing i'm not getting that no it's a music licence the music
Yatish Mehrishi: licences are prohibited you have seen how music pre-music streaming service have closed down gana closed down ring closed down reso closed down because the music licencing was prohibitive people have to pay for music so i'm just saying we need to sit with me i'm not being against the music industry it has to be set through and get the right pricing for the medium to survive we took over gana we went behind a paywall because we said we not give you free music and that's where it works similarly for radio if it can work out then the longevity will be there the medium will flourish much more i think so between government the tribe conditions can help massively i spoke about the internal stakeholders of being true to the medium on music and support from the music industry to allow the streaming of radio stations at the right price will also help a long way
Vanita Kohli-Khandekar: perfect perfect because you're talking about reducing your content cost this is just to explain to my listeners that when you say licencing you mean that for you music licencing of that music is a cost and if that goes down it makes it more viable for you to do it online correct yeah online the pricing are very different
Yatish Mehrishi: when spotify or saavan pays that the cost are very high which a radio companies cannot afford to do digital otherwise everybody would have they would have the radio company would have been the first to be the music streaming services rather than a gana saavan or a wing coming in the radio companies would have done it but because they were prohibited and they didn't
Vanita Kohli-Khandekar: have the vc funded money and therefore you saw how much more clip and radio just curious i mean if i was for you it is two percent not two percent of uh i remember there was a decision by the court
Yatish Mehrishi: yeah so it's sub judice i don't want to touch on it okay yeah the court case goes on uh and i so now i'm part of the ci i was talking to devra i think the industries need to sit together rather than keep fighting it is not helping them not helping us so fine on content cost therefore
Vanita Kohli-Khandekar: uh she can to come back to you again the last question to you would be and you know i i love the fact that you you look at it across other all sorts of medium you know unlike many of us here what would be your two or three pieces of advice to radio operators and i know you don't want them to increase that a year but but but if they had to get a better share of wallet or a better rate or even as a medium what would your advice be today so first of all i think from a marketer's
Shrikant Shenoy: perspective from our client's perspective we look at radio often as the the medium which will take us to the last customer sitting down there like say for an itc we know that okay we wanted to say a mark home or we want to reach a certain rural pocket so far digital print has been one of the key ways to get there especially with you know smartphones and feature phones going right down there but i think radio really has a strong local connect that strong last mind connect which it's not being leveraged fully i mean they have that advantage and we know even the prime minister uses radio for his monkey bar to reach that kind of an audience so somewhere that reach of fm as a medium to be able to reach every corner of the country that is a strong advantage which i think no other medium really has and that's something which i think radio can use to advantage especially for fmcg where that clearly is still a bit of a challenge when it comes to planning that's really important second you know we've been handling plans like spotify and they bring in a lot of the kind of success best practises that they've done across the world into india like say their raft campaign and so on so somewhere it's an extremely savvy kind of a platform which knows exactly what works for the gen z there's a huge amount of research they've done when it comes to targeting these younger audiences and what really interests and excites them and they've been able to successfully use that in reaching out to them and spotify managed to get its position at number one in a very short span of time thanks to all that data back investment that they did so somewhere maybe radio needs to also invest a bit more in research in terms of understanding its listeners a little better in terms of understanding each market a little better to see what how can it become smarter more aggressive more dynamic like some of these podcast platforms because they have their own strengths and a lot of legacy because they've been here for much longer than many of these podcast networks so i think somewhere they need to leverage that to become a little stronger lastly of course in terms of leveraging their rjs which we discussed earlier in the discussion they are extremely strong in this influencer age and you know we see why many influencers go up and down in our influencer tracking mechanism we have something called an influencer power index which tracks social mentions and sees how the ratings fluctuate when it comes to rjs it's extremely stable so whatever network whatever station network i look at the kind of stability that these rjs have in terms of their connection with audiences is extremely stable so unlike some others who keep going up and down depending on say the success of their movies or what kind of treatments in akin media it's a bit of a volatile game but rjs have a strong loyal consistent enduring kind of a connection with their listeners and that's something which again only fm has so maybe they can leverage that to advantage in a more powerful way
Vanita Kohli-Khandekar: super you know this thing of rjs being stable influencers is completely new because i've just done huge pieces of work around influencers but in the comsco study which is what i used i haven't seen rjs mentioned all sorts of celebs and others but rjs
Shrikant Shenoy: yes it's a huge world and you know when it comes to influencers definitely the top bracket and whoever scores right on top of these metrics will be the film stars the cricketers a whole lot of tv actors also who who by sheer kind of reach and the kind of work they do enjoy a huge base so definitely they are right up there but as i said the cost the roi of investing in such influences is also extremely high it's a bit of a hit and miss because we need to see whether that influencer matches the brand or not rjs may be in the tier two or the second tier of in terms of the sheer ranking score but when it comes to the variance in terms of the levels of engagement and the various metrics that we track the variance is a lot less so they are fairly stable whatever money you put in behind an rj you are sure you will get the returns for that so you know it makes much better sense for advertisers to get a kind of a short shot bang for their buck
Vanita Kohli-Khandekar: super thank you so much shrikant and thank you yatish for both of you for your patience and for taking some tough questions on this one because i really think it's such a great medium but just you know you can't see the scale when you look at the numbers it's just a travesty i think thank you so much again for joining me
Yatish Mehrishi: thank you it was a pleasure thanks shrikant it was a pleasure
Vanita Kohli-Khandekar (Host): The first experiments with private radio happened in the late nineties. Then in 2000 auctions were held for private FM frequencies. But by that time almost every other media – TV, print, film – had raced ahead. And unlike the others, radio’s freedom came with a heavy license fee burden and conditions that didn’t allow firms to own multiple stations or broadcast news and current affairs or even sports. This dampened the medium’s ability to monetise and or to do interesting things with its programming. As we heard from Yatish, some changes have been suggested by the Telecom Regulatory Authority of India. But they are yet to become policy. If they do, there is so much more radio could do and so many more people it could reach.
