Radio constitutes a small but significant part of the media and entertainment industry and despite facing several stumbling blocks, as a medium, it continues to be impactful, said Nisha Narayanan, Director & COO, RED FM, and Magic FM, during a conversation with e4m.
Narayanan also explained how measures by the government to support the industry is the need of the hour. She also spoke on the sector’s performance in 2023 so far and shared many other insights.
Excerpts:
What changes would you like to see in the radio industry?
Despite facing certain stumbling blocks, radio as a medium continues to be impactful. Private radio operators still remain prohibited from broadcasting news and current affairs. Furthermore, high license fees restrict new players to enter the radio industry and create complexities to run the business by increasing operational costs. As a radio evangelist who believes in the tremendous possibilities of radio, I hope the norms are eased.
Relaxation in the licensing fees is essentially important to allow more players to enter the industry. Also, deregulation in the radio sector is vital to be even more experimental with content on radio. We need to create more flexibility in the industry by providing more opportunities for new players and hopefully, it will positively impact the overall growth of the radio sector.
How will the commercial broadcasting sector evolve when new norms about broadcasting news and current affairs are introduced in the radio industry?
Unequivocally, 20% of the content broadcast on the radio is local. Talking specifically in the discourse of Red FM, around 80-90% of our content is hyper-local. It is our indispensable pillar. Coming to news and current affairs, broadcasting AIR news is allowed to private broadcasters, but at a certain fee, which does not create much impact. Publishing AIR news, following Prasar Bharati’s guidelines, brings not enough value to private FMs. Also, it does not create differentiation among the radio players in the market. Private broadcasters must be allowed to get the news from other news agencies like ANI, Reuters and PTI to share the news content with the listeners. Also, to build the control mechanism, policymakers must focus on the broadcast code of news, and an organisation should be penalised in case of violating that code of conduct.
While we are at it, I would also like to highlight a key differentiation between news and current affairs. Private broadcasters must be permitted to broadcast news if not current affairs. News can be observed objectively whereas current affairs with their more inclined approach toward discussions and debates are subjective. Our aim should be to inform and educate the audience by disseminating more factual and researched content to the listeners.
Has Red FM achieved pre-Covid advertising volume?
We are back to our pre-Covid levels but after a stagnant period of struggle. The recovery has been through FTC businesses, various on-ground events, and digital properties as well. It is because of Red FM’s 360-degree approach with various verticals that we have been able to add to the growth fund. Moreover, the volumes are back, but the issue is the pricing. Advertisers brought down their ads. It has been difficult to bring back the value proposition. The biggest concern with the radio industry remains that we are in a dire need of a measurement system. If we look broadly at the other mediums, we see that television has a TRP rating, newspapers have IRS, but radio rating is based on IRS, which is readership. These facts don’t add up well for the radio industry.
How does the global economic slowdown affect the radio business?
I believe whenever a recession hits the first thing that gets cut down is the advertising budget. Since radio depends largely on an advertising revenue model, it definitely makes an impact. This is where our 360-degree approach becomes our parachute, with activations, digital, and RJs becoming content creators and influencers, we are able to make do.
We are creating boutique festivals, whether it is South Side Story or our upcoming music festival Swag Fest. We are focusing on ensuring that businesses are not run unilaterally but with more partnerships. We pool in strengths to create joint IPs to make them larger than life.
MIB has sought authority recommendations on issues such as removing the linkage to a non-refundable one-time entry fee (NOTEF) in the formula for an annual fee and extending the existing FM license period of 15 years by three years. How this is going to impact the radio industry?
If the licence fee is based on revenue sharing then it will significantly boost the industry. This way it will be based on the revenue we are making, which a lot of other radio stations are struggling with, and maybe for larger groups like us, the scale works. When some markets are not doing well, it compensates for other markets which are doing extremely well.
The moment you delink it with the NOTEF what will then happen is the basis of the revenue if you’re paying an X percentage share, it makes it a lot easier to breathe to facilitate operational work and allows more ease of work. The other recommendation that has come to us because of Covid and two years completely lost is if the license period could be extended by three years. In this case, the industry will get a boost and there won’t be too many players who may want to pack up and go, but probably more players who would want to come in and invest in the radio industry. This return will be a good step toward the overall growth of the industry.
The union government has recently announced the FM auction. Is Red FM participating in the recent auctions?
Red FM is one of the leading players in the radio industry. With 69 stations we are present across the country. We believe the current business needs to stabilize itself before we move to take on new responsibilities. Therefore, if need be, there are some newer towns that we will consider spreading our footprint towards. As I’m of the opinion that growth is outside the metros, which is why it will be a welcome change to have auctions and participate.
Do we expect a further increase in the revenue share in the radio industry in 2023?
The amount that you mentioned will surely increase. We really need to work on increasing the ad pie to come into a much more competitive space. The radio industry needs to reach a point that it hasn’t reached in the last two decades. Therefore we need to have easier regulation of more players, more frequencies, and more variety of content in terms of news and current affairs to be allowed as well. This will further increase the revenue share for the radio industry in the upcoming years.
What are RED FM’s plans for this year?
Our focus has always been on inclusion and diversity. It’s not about one size fits all. We are working more towards building communities like Swag Fest, which is a Punjabi-Rap-Hip-Hop Music Festival. Then there is South Side Story, which is about South Indian Music, and is a bigger platform in markets outside of South. The content being disseminated on radio platforms has changed over the last few years. We have come a long way from playing 100% Bollywood music to supporting indie artists by playing 40% independent music on the radio. The medium empowers. It is live. Since, the airwaves are always reachable, when all else fails radio thrives. For instance, in Bombay when the flood happened or when a flood or cyclone happened in the east, the radio worked at the front covering all the stories. The medium which has survived the onslaught of television, digital, and changing technology, will remain unaffected always. It only seeks a more enabling approach by the policymakers to reach its highest potential.
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