Fearing a drop in listenership as listeners move to OTT music streaming space, private FM radio broadcasters are now airing fewer advertisements. From 18-20 minutes for every 60 minutes of programming, advertisements now account for just about a fourth of the time every hour. However, in an effort to protect their toplines they’ve upped advertising rates by about 7-8%. In some smaller markets, the rates are up by as much as 20%. In absolute numbers, though, the increase isn’t too much because prime time spots in the metros cost between Rs 800 and Rs 1,200 while in the smaller towns the rates are only Rs 200 to Rs 300.
But the strategy has cost stations some revenue, concedes Prashant Panday, MD and CEO, Entertainment Network India (ENIL), which runs Radio Mirchi stations. “In our opinion, that’s a temporary loss, given the listenership has strengthened after this initiative,” Panday observed. Panday added that on some of his stations advertisements are down to ten minutes an hour and it’s paying off. “We have emerged the number one station in Chandigarh beating two well entrenched players,” he said.
Given how music streaming apps are now easy to access with the sharp fall in data bandwidth charges, radio stations may not have an option but to keep ads to the minimum.
As Rohit Dokania, VP, research, IDFC Securities, explains “listeners are more likely to switch to streaming apps because the costs are falling”. Nisha Narayanan, COO, RED FM, which is owned by Sun Group, confirms that listeners are complaining about the large number of advertisements and believes capping ad inventory is the only way to build a differentiated product. Asheesh Chatterjee, CFO, Reliance Broadcast Network, too feels listeners views’ must be heeded even if the rules don’t call for a cap on ad inventory for radio broadcasting. He believes it’s easier to broadcast fewer ads now because post the Phase III auctions, the inventory has increased. “With fewer stations it was hard to sustain the business without 18-20 minutes of advertising,” Chatterjee said.
The metros, of course, continue to be the bigger revenue generating markets. And broadcasters are trying to beef up weekend programming to try and earn more revenues. Apurva Purohit, president, Jagran Prakashan, which runs Radio City stations, says she is trying to build up weekend advertising inventory by creating special shows. This follows from an AC Nielsen study which found that listeners spent almost as much time listening to the radio on the weekends as they did on weekdays.
Sun Group’s Narayanan is focusing on events to drive revenues. “Projects such as Yellow Taxi Music not only help enhance the image of our brand, they also generate revenue. The idea is to gradually reduce the dependency on radio advertising and create additional revenue streams,” Narayanan explains.
The Indian Readership Survey reveals listenership in the 11 am to 2 pm time band is as strong as it is in the morning and evening though there is a slight drop in during the afternoons. – Financial Express