Tuning Into Radio Again

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In June 1923, the Radio Club of Bombay made its first-ever Radio broadcast, ushering a golden chapter in the history of Indian mass media. Five months later, the Calcutta Radio Club took birth. By the time the country got independence, India had six radio stations across six cities – Delhi, Bombay, Calcutta, Madras, Lucknow, and Tiruchirapally. Cut to now, as of March 2023, CEIC data suggests that India has 388 private FM Radio Stations. But the volume of radio stations is by no means an indication of its popularity. Pitch Madison’s 2023 report states that the Radio industry saw its share of Ad revenues shrink from 3.3% of Ad spending in 2019 to 2.3% in 2020 and has remained there as of 2022. However, the total media AdEx has gone up significantly from 67603cr to 89803cr during the same period.

The glamour of Digital clearly enamours marketers, but a new move by the Telecom Regulatory Body of India (TRAI) can bring about the revival of this old mass medium, or so we are hoping.

TRAI has developed a series of recommendations to help revive the Radio sector. Primarily, TRAI has recommended to the Ministry of Information and Broadcast (MIB) that private FM radio channels should be permitted to broadcast independent news and current affairs programmes, with a limit of 10 minutes per hour. Currently, private FM radio operators can only broadcast All India Radio’s (AIR) news bulletins without any alterations, and additionally, they are permitted to share details of local events and issues. It is believed that the move to broadcast news will help create an upswing for private Radio operators.

The Radio industry, which was heavily affected by COVID-19, is battling challenges in the face of on-demand streaming platforms and a series of systematic problems. As per media reports, the sector has not even touched its pre-COVID levels yet. Several experts point out that government spending on Radio has also decreased over the last couple of years. The Indian Readership Survey (IRS), a media measurement to track media and product consumption, has not been conducted since the pandemic, leaving advertisers with limited avenues to gather data. According to industry professionals, Radio Audience Measurement (RAM), another measurement platform, promises more accuracy in tracking radio listenership, but its sample size is confined to limited markets. On top of that, many smartphones today do not support Radio, further limiting the medium.

News, The Propeller
As per experts, the move to broadcast news on private Radio channels will be a significant development and propel AD spends and viewership on the medium. Rahul Namjoshi, CEO, MY FM, while thanking TRAI for the recommendations, explains that most of the major radio broadcasters belong to responsible news media houses with strong credibility, so they can handle content quality and news delivery easily. He expects that the industry will witness a boom if the recommendations are agreed upon by the government. Preeti Nihalani, COO, ENIL, Mirchi says, “This move will diversify content, making radio more informative and appealing to a wider spectrum of advertisers.” Similarly, Harish Bijoor, Brand Guru and Founder, Harish Bijoor Consults Inc. thinks that news broadcasting on Radio is going to be a disruptor, provided the mistakes of television news are not repeated.

Manoj Mathan, CEO, Mango FM remarks, “Radio stations like Mango, which belong to large media groups, will have a head-start with regards to news content as it can be sourced and created in-house.” He says that advertisers are likely to be interested in the news segment, but the amount they are willing to invest will depend on the exposure they gain, which depends on how the news is played out. “News and current affairs programmes without any time restrictions will bring in more variety to the content and will also see expansion in reach,” says Mayura Shreyams Kumar, Director, Digital Business, Mathrubhumi Group, adding that this move will attract the newer category of advertisers.

Nisha Narayanan, Director and COO, Red FM and Magic FM says, “We have been missing opportunities with serious brands and listeners who want a broader perspective. The unavailability of news and current affairs makes Radio lose a lot of advertisers, considering they see us as an entertainment platform rather than an infotainment platform.”

Independent Marketing and Digital Advisor Ashok Lalla notes, “News is something people constantly want to tune into. We have seen an entire genre of news channels carve out a healthy audience and advertiser revenue on television. Newscasting over radio may just be the growth lever the doctor ordered if the channels can handle it smartly and build strong programming around newscasting.” He further adds that this will attract listeners and advertisers. Nandagopal Nair, VP & Head, Brand & Communication, V-Guard says, “I think if private radio opens up to news, it will open another avenue. And I see there could be an opportunity for the medium because Radio is consumed on the go.”

Other Recommendations and Guidelines
According to experts, the proposal to mandate FM tuners on all mobile handsets will extend the medium’s reach, and advertisers will be able to connect with their target audience not only through traditional receivers but also via mobile devices, increasing touchpoints and engagement frequency. Notably, TRAI’s initiative to separate the annual licence fee from the Non-refundable One-Time Entry Fee (NOTEF) can be a substantial cost-saving measure. Currently, Radio operators pay an annual licence fee of 4% of the gross revenue of their channel or 2.5% of the NOTEF, whichever is more. According to reports, TRAI observed that almost half of the Radio operators end up paying over 4% of their gross revenue when the fee is calculated based on NOTEF. Preeti Nihalani believes that this proposal will also indirectly benefit advertisers, as radio companies will be able to allocate more resources for research, audience measurement, product innovation, and creative AD campaigns.

The recommendation seeking the extension of the existing FM licence period of 15 years by three years will notably help the Radio channels make up for the financial dents that the pandemic left. Additionally, TRAI’s suggestion to take appropriate measures to provide relief to the FM radio operators will be beneficial to the Radio operators. On top of it, TRAI has also stated that the programme code of conduct applicable to All-India Radio should also be extended to private FM stations. Notably, private radio operators are permitted to broadcast AIR bulletins without any alterations.

Manoj Mathan elucidates that AIR has a general code of conduct and a commercial code of conduct. He notes, “The general code advises against things like criticism of friendly countries, attack on religions and communities, hostile criticism of State and Centre, anything amounting to contempt of court, and anything obscene or defamatory. Whereas, the commercial code has details of the dos and don’ts of advertisements on radio.”

Mayura Shreyams Kumar says, “As a media organisation in existence for more than a century, we are committed to the plurality of news and views, and hence we have not considered exploring this facility of using AIR bulletins.” She adds that even now, certain non-news and current affairs broadcasts are permissible, and almost all private FM radio operators are carrying such content.

Manoj Mathan states, “News is relevant and has better consumption when it’s current, especially on a medium like radio. AIR broadcasts news at fixed slots. Waiting for this to be broadcast and then using the same on FM radio leads to a delay in the news for our listeners, defeating the purpose of the news being current.” He points out that as per current rules, AIR news bulletins have to be broadcast ‘as is,’ meaning nothing can be altered, including the content and voice being used. He believes that this alters the soundscape of a station, besides the fact that it is not ‘current’ enough. He further adds that there is a paid licence one has to take from AIR before using the news bulletin, but upon asking about the cost of such a paid license, he informs, “As far as I know, no private FM station has taken this licence for the reasons listed above, and hence I am not aware of the actual cost for the same.”

Benefits and Limitations of the Medium
Digital and New Media Advisor Sanjay Trehan says, “Radio is the most cost-effective and relevant medium for mass dissemination of information, but it has not caught the fancy of media planners because of some limitations of the medium as well as an ‘urban bias’ in planning.” He elucidates that Radio is a linear medium that offers limited interactivity and lacks audio-visual properties in the age of moving images. He adds, “While recent trends suggest that radio is gaining currency in Tier II and Tier III cities in India and ad volumes are rising in regional markets, radio as a medium suffers from fragmented audiences, limited data, short or distracted listener attention span, and increasing clutter.” Nevertheless, he thinks that on-demand radio will do well with niche audiences.

For newer brands, the brand recall is largely visual. This limitation of Radio makes it an unfavourable choice for several new-age brands. Shankar Prasad, CEO, Plum Goodness remarks, “Our brand recall is still visual, in the sense that I am not a Coca-Cola where the name brings a visual to the mind. In our case, the visual brings a name to the mind. We need to show a visual before people recognise us.” However, he believes that as the brand’s retail footprint increases, its oral familiarity will also widen, and that’s when the brand will locally start driving awareness, consideration, and even bottom funnelling into some of the retail assets via Radio.”

Harish Bijoor notes, “There is a complete lack of innovation in radio. Licencing is fragmented, and there is no one national player except for All India Radio, which remains the biggest and best of them all in more ways than one. Privatisation is yet to yield results and impact in a pan-India manner of speaking.” He states that Radio is one completely ignored medium in India as far as policy-makers are concerned. “We have been speaking of reform, but little has hit the road. In the bargain, it has been pushed into a niche of its own. So small that few are bothered about the sector,” he adds. He believes that radio is a sector and an industry on its own and it needs to be treated as the ‘Radio Industry’, not as an adjunct and add-on after all other media vehicles have been handled.

Nilesh Malani, CMO, Polycab informs us that his brand advertises on radio, but only for localised insight and promotion. On similar grounds, Ajay Maurya, CMO, Fastrack says, “We mostly use radio during our tactical interventions, whenever there is some kind of activation or promotion that we want to deliver to the last mile consumers. But we use it very rarely for any ATL campaigns that we deliver through brand campaigns.” On the contrary, several facets of Radio give it an edge over other mediums. As per Ajay Maurya, the most important aspect of radio is that it can gather the attention of consumers when they are travelling or driving and are away from phones.

Nandagopal Nair explains that radio is a great medium for the dissemination of region-specific information. He states that V-Guard uses radio strategically in certain markets to announce discounts and local updates.

Vanda Ferrao, CMO, Wow Skin Science says, “Radio is a good medium for reminders. Once you see a certain creative on your Digital, because of its auditory nature, it is good for reminders.” She shares that at the current stage where Wow is in, it does not use radio, but as the awareness of the brand increases, Wow will explore using radio.

Ashok Lalla says, “Radio has never been a primary advertising medium but a support medium. With the growth of Digital media options, including streaming audio services, advertisers have tended to gravitate to them rather than look to build brand outreach via conventional radio advertising.”

Preeti Nihalani brings to light that the advertising industry, valued at Rs 68,475 crores in 2019, expanded to around Rs 85,769 crores in 2022, with a notable 93% of the incremental spend (Rs 16,089 crores out of Rs 17,294 crores) directed towards digital platforms. She states, “In the present landscape, traditional media, including radio, must evolve and embrace Digital. Incorporating Digital elements such as online streaming, podcasts, and active engagement on social media platforms is crucial for radio stations to expand their reach and offer advertisers more holistic campaigns that seamlessly blend audio and Digital advertising.”

Nihalani shares that Radio has a remarkable ability to engage with its audience on a personal level, and is versatile. Its audio-only format allows it to create a theatre of the mind. She adds, “The medium is cost-effective and offers advertisers a way to reach a broad audience without the high production costs associated with visual mediums.”

Nisha Narayanan voices, “Radio can amalgamate multi-media and engage audiences more effectively. It fits nicely into a marketer’s plan to reach a larger audience through various forms of media.” She adds that Radio benefits both the audiences and the advertisers as it is 24x7 available, immediate, interactive, hyperlocal, adaptable, and cost-effective.

Other Major Challenges
Despite the medium’s own set of limitations and advantages, Radio is also witnessing a series of other challenges. Nihalani further says that government spending on radio advertising has seen a significant reduction over the past few years. She observes that there has been a notable decline from a point where government advertising contributed between 15-20% of their overall revenues to now representing under 5% of their total revenues. She, however, anticipates a substantial increase in government spending on radio advertising, with several state elections and general elections on the horizon.

Nisha Narayanan says, “Unlike any other mainline media, FM Radio is the only one that has to pay both a one-time entry fee and an annual license fee. This fee is a guaranteed minimum amount or a percentage of our revenue, whichever is higher. Even when we faced financial challenges due to the pandemic, multiple lockdowns or a slowdown in business, we had to fulfil these financial commitments. We even had to pay interest on delayed payments because there was no moratorium offered to our sector.”

The data boom in India has also given rise to many audio-OTT platforms that support on-demand streaming and provide more options and flexibility to users. Nonetheless, private radio operators believe that these two mediums can coexist. Preeti Nihalani states that Radio and audio streaming platforms are not necessarily in direct competition; instead, they coexist. Radio Mirchi has a long-standing partnership with streaming giants such as Gaana and Spotify to feature their audio podcasts and marquee audio shows.

Nisha Narayanan notes, “Radio is a media multiplier. It stands out because people discover music and other content mediums through it, driving popularity, likes, and downloads. We’re a vital tool for music labels and even online platforms to help people discover all sorts of content - not just music. Unlike curated lists or podcasts, radio has a unique ability to help content find its audience.”

Mayura Shreyams Kumar while comparing Radio and OTT-audio platforms says that FM Radio is purely a common man’s medium and is very local, whereas, streaming platforms come with a subscription fee. She remarks, “While private FM Radio is highly regulated, there isn’t any regulation for OTT or streaming platforms. In the long run, this will affect the level playing field of FM Radio.” She adds, “Radio has a reputation of being dependable, and a trusted local medium with a global outlook, and all of it comes free. The ads are unskippable, unlike the streaming platforms, thereby giving value for money to the advertisers and the listeners alike.”

Manoj Mathan observes, “Both OTT-audio platforms and radio are here to stay and have their own space and consumption patterns. Radio has the advantage of playing curated music along with RJ talk, while OTT audio has the advantage of the convenience of listening to what one wants. However, radio brings the joy of discovery and familiarity of music and RJs.”

Rahul Namjoshi says, “The two mediums can co-exist. Radio has the surprise element, whereas streaming apps map individual song preferences and make playlists. Radio is also extremely hyperlocal, giving real-time city information and updates, which no other medium can deliver as yet.” He shares that advertisers realise the potential of this medium very well and that the radio inventories are full, but it is they who are refusing business to maintain a great listening experience. He suggests a conscious effort from all radio players to ask for the right price for the product. According to him, MY FM is witnessing better volumes than pre-COVID times, and if the radio players can get pre-COVID rates, then they will surpass the valuation.

Nisha Narayanan states, “Advertisers are investing in radio as a medium, but we are still operating on pandemic rates and offers in addition to bonus offers or heavy discounts.” She highlights that instead of focusing on competing with clients and agencies, most radio players are just trying to outdo each other by offering cheaper rates.
Ashok Lalla suggests, “Radio channels should not look back and instead peg their growth plans based on forward-looking projections. Stronger online radio integration, better brand solutions, and better metrics to demonstrate the success of using the channel for brands is how they should approach things.”

Much like the ignored middle child, the Radio languishes between the Newspaper and the Television, and with the introduction of the youngest darling Digital, it certainly has developed a feeling of inferiority. But with TRAI’s latest decision, it can find itself on an equal footing, with some of its relevance making a comeback.