Guest Column: Decoding Profitable Programming in Radio: Vineet Singh Hukmani

The right formats will be additive to business, but any mistake will be a costly one as the One time entry Fee for Delhi Mumbai Bangalore together are in excess of Rs 390 crore, says Hukmani

e4m by Vineet Singh Hukmani
Published: Oct 21, 2015 8:39 AM  | 7 min read
Guest Column: Decoding Profitable Programming in Radio: Vineet Singh Hukmani

It's a momentous time for everyone in Private FM Radio especially for Programming controllers who get to decide the destiny of their stations and companies by making the right format choices. The right formats will be additive to  business but any mistake will be a costly one as the One time entry Fee for Delhi Mumbai Bangalore together are in excess of Rs 390 crore not to mention the annual license fee of these stations together is in the range of Rs 1 crore a month!  Which means the mistake will leave no time for recovery and this time with such heavy one time entry fee and expensive annual licenses fees time is really money coupled with vicious competition which will not let the erring station recover and re –enter the fray with a ‘back format change’. Look at how the existing telecom brands (who pay huge entry fees) Airtel, Vodafone and Idea have made it impossible for new brands to create profitable entries into the market.
 
Additive business programming for networks 
 
Additive business programming models are evident from Radio Mirchi, the market benchmark on revenue where their bidding strategy has strengthened the ‘core mainstream Mirchi network offering’. It also allows for creation of a parallel and substantial ‘Hindi Retro network’ which is a Rs 400 crore annual market this hits out at competition like Red FM and Radio City and possibly MYFM in smaller markets. Furthermore the Mirchi Programming bastion allows for ‘regional networks to flourish the most promising ones being the ‘West, Marathi and Gujarati network’ which is likely to be in excess of Rs 190 crore, The north Punjabi network again in excess of Rs 100 crore per annum and the south network of Kannada, Telugu, Malayalam and Tamil’ which is possibly in excess of Rs 260 crore!  What is evident from the strategy is that the programming decisions will dictate the revenue strategy where the right one will result in exponential additive growth and the wrong one will diminish size of market, clients and overall employee confidence in the brand at a national level.
 
Big FM which has the highest growth rate in revenue and is close to challenging the market leader. The company with the highest growth rate in EBIDTA margins has cemented its place in the very lucrative “Hindi Retro” segment by gaining mass programming leadership in markets like Delhi and Mumbai which are the highest license fee markets. This confidence has rubbed off on the smaller markets and BIG FM is growing on this strength. Every client mass or otherwise is seen advertising on this network driven by listener loyalty. It remains to be seen whether Red FM or Fever rises to the opportunity in this segment which more and more national or local clients are gravitating towards and RAM showing a constant 15%+ market share for this format in any city of operation.  This format of Hindi Retro is the best example of National additive programming.
 
Big City Programming decisions for a new station, Mass or speciality programming?
 
Let’s take a new Mumbai station as an example. The One Time Entry Fee here is Rs 120 crore. Amortized over 15 years is a cost of Rs 8 crore a year. The return on this capital even on a bank FD at a simple interest of 10% is Rs 12 crore per annum which therefore is the basic cost of capital. The annual license fee is Rs 3 crore a year. The conservative cost of operation of a typical Mumbai station is around Rs 18 crore per annum which would include marketing cost of launching a new station brand. This totals to Rs 41 crore per annum. Which is a total cost of Rs 3.41 crore a month. So in order to breakeven the new station in Mumbai has to generate Rs 3.5 crore a month minimum in revenue to breakeven. A Retro format in Mumbai therefore has a chance to play in Rs 95 crore Market in Mumbai alone, A Marathi station format in Mumbai coupled with a Strong Marathi network in Maharashtra is a playground with over Rs 110 crore and this is a growing base for sure. 
 
Speciality programming format like English in Mumbai or Talk radio at this new license fee: 
 
The market size in these segments is currently lower than Rs 24 crore per annum. Without the coupling of other large cities like Delhi + Bangalore to offer a ‘national speciality network’, at these costs of Mumbai, attempting ‘speciality programming’ is suicidal to say the least. Speciality programming formats in large ‘influential markets’ like Mumbai tend to become the face of the brand nationally and therefore the mass network will loose mass clients at a national level due to its ‘speciality’ Mumbai/Delhi image.  Moreover, Single city speciality formats like HIT 95 in Delhi which has changed to Hindi now as it could not become profitable in ‘speciality programming’ even at an One time entry fee of below Rs 10 crore, Chennai live which is English in Chennai which is possibly at a revenue of below Rs 30 lakhs per month and Indigo in Bangalore will come under huge profit pressure after the new annual license fee.  The absence of ‘speciality programming networks’ in these stations do not offer any scope for price increase or client count increase as these are too expensive to execute. An established company offering speciality programming already in Delhi and Mumbai can easily go the same route in Bangalore thereby making the existence of single city formats even more dangerous for single city players.
 
Multiple frequency pit falls in a city
 
So if a radio company already has a mass format station in Mumbai/Bangalore and a great position on monthly revenues to the tune of over 5cr a month. Imagine the second station is now a “speciality non mass format”.  What are the pitfalls?
 
1) Advertisers and Clients are not bound to choose ‘both’ from the same stable and if they begin to choose the ‘speciality play’ over the mass play, revenue will actually move from the mass play of the same player to the ‘speciality play’ leaving the net gain on revenue for the company zero or even negative. So the format choice may derail breakeven calculations from day 1 
2) The only choice then for the player is to discount the combo which brings down the national image of the player as a ‘discounting network’ in the eyes of the large clients in Mumbai. Most networks have tried very hard to increase rates.
3) Client count must not get sacrificed by format change. It is known that mass real estate, mass retailers and many other hyper local services are currently not confident about speciality formats. These form a large chunk of local revenues for any radio station.
4) Creating and Selling ‘speciality programming’ is a huge national level mindset change with every member of the team be it programming, marketing or even sales.  The pressures of financial gain will finally be passed on to sales teams who fill find earning 3.5cr consistently month on month impossible in that city in speciality programming formats. This will result in attrition and loss of faith. 
 
What this boils down to is that programming controllers and their teams hold the key to creating a ‘saleable and therefore’ profitable product and a stable company.  Allowing a good balance of ‘head’ with ‘heart’ will take care of the spectre of huge costs of phase 3.  And letting your heart go to ‘try something’ different will damage the company beyond repair.  
 
I have always believed that product strategy defines business.  Even though Smart watches are really cool, you would not find a player giving up their phone business to enter a seemingly cooler market.  Sometimes ‘cool’ leaves you with a heated collar because your business goes in the red!
 
More power to every programming team in Radio. All the best. May your decisions be wise ones.
 
(The author of this article is Vineet Singh Hukmani, MD & CEO Radio One. The views expressed here are solely those of the author and do not in any way represent the views of the publication)
 

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TRAI releases Consultation Paper on reserve price for auction of FM radio channels

The regulatory body has asked for written comments on the consultation paper from the stakeholders by November 6

e4m by exchange4media Staff
Published: Oct 17, 2019 1:19 PM  | 1 min read
TRAI

The Telecom Regulatory Authority of India (TRAI) has released a Consultation Paper on "Reserve Price for auction of FM Radio channels".

The Ministry of Information and Broadcasting (MIB) sent a reference dated August 22, seeking recommendations of TRAI on reserve prices for 283 cities (260 new + 23 existing) under FM Phase-Ill Policy.

Accordingly, this Consultation Paper has been prepared to seek the comments and views of the stakeholders on issues related to estimation of the reserve prices for auction of FM Radio channels.

As part of the consultative process, the Consultation Paper has been uploaded on the TRAI website.

The regulatory body has asked for written comments on the consultation paper from the stakeholders by November 6. Counter-comments, if any, may be submitted by November 13, the paper said.

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Radio Mango Nerolac ‘Pulikkali’ celebrates the essence of Onam

Radio Mango in association with Nerolac Healthy Home Paints flags off an Onam folklore-themed roadshow in Kerala

e4m by exchange4media Staff
Published: Sep 13, 2019 6:44 PM  | 1 min read
Radio

Radio Mango in association with Nerolac Healthy Home Paints launched ‘Pulikkali’, an Onam folklore-themed state-wide roadshow that resonates with the ideology of unity among all people, regardless of their caste, colour or religion.

The road show brings to life the most vibrant and eye-catching ritual of Onam, the Pulikkali (Tiger Dance). The campaign also fondly recalls the popular Onam folk song ‘Maveli Naadu Vaneedum Kaalam, Manushar Ellaarum Onnu Poley.’

It is designed around the ancient folklore of the golden reign of King Mahabali when there was no discrimination on the basis of caste or class and there was neither crime, nor corruption.

The dynamic crew of entertainers, dressed as Pulis (Tigers) accompanied by Chenda Melam (traditional percussion) artists will travel across Kerala for 15 days as part of the campaign to emphasise the fact that no matter what, we all are one and whatever the colour, we must unite to make this Onam colourful.

The flag off to the ‘Pulikkali’ roadshow was conducted in Kochi by Malayalam actor Saiju Kurup in the presence of Ravindran Nair, Programme Director, Radio Mango, and Rajesh C., Kerala Regional Sales Manager, Nerolac Healthy Home Paints, at Malayala Manorama’s Panampilly Nagar office.

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PM Modi lauds Fever FM’s #PlasticSeBreakUp initiative

In a tweet, the Prime Minister congratulated Fever FM for its innovative campaign to ensure reduced usage of single-use plastic

e4m by exchange4media Staff
Published: Sep 13, 2019 5:46 PM  | 2 min read
Fever FM

As part of the Fever Voice of Change CSR initiative, Fever FM launched the ‘#PlasticSeBreakUp’ campaign to make India free from single-use plastic.

Drawing inspiration from Prime Minister Narendra Modi’s message this Independence Day, the initiative urges all shopkeepers to do away with single use plastic bags.

PM Modi too tweeted in support of Fever FM’s Bharat Positive initiative. He said ‘I congratulate Fever FM for their innovative campaign to ensure reduced usage of single use plastic. I urge shopkeepers to take part in this campaign with vigour. Such efforts will add valuable momentum to the Swachh Bharat Mission.’

Talking about the initiative, Harshad Jain, CEO – Radio and Entertainment, HT Media Ltd and Next Mediaworks Ltd., said, “We are extremely grateful to our honourable Prime Minister for his encouragement and appreciation of our latest Bharat Positive campaign, and assure him of our unending support. This encouragement gives us motivation to continue our work with greater zeal to bring about a positive change in the country. We are committed, with our latest campaign against single use plastic, to drive the citizens towards a plastic free India. Bharat Positive is a Fever Voice of Change (FVOC) initiative, the biggest CSR in the history or radio.”

Gautam Gambhir, cricketer, MP and face of Bharat Positive initiative, said, “Credit to team Fever and the listeners of the radio station. PM sir noticing the campaign is no mean feat, it just gives a shot in the arm. Of course when Mr Modi talks, the world listens. There’s substance in his thoughts and him putting the weight behind ‘Plastic Se Breakup’ campaign will only galvanise the whole movement. The fact that his following cuts across age groups is another huge plus. Through PM’s support, the youth, the mid-aged and the elderly, everyone will know about this campaign.”

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RED FM's ‘Pride Ki Side’ campaign highlights LGBTQIA + issues

To celebrate the first anniversary of repealing of Section 377, the initiative will provide a platform to share stories and highlight challenges faced by the community

e4m by exchange4media Staff
Published: Sep 9, 2019 7:03 PM  | 2 min read
Red FM

93.5 RED FM has launched a brand-new initiative – ‘Pride Ki Side’ to celebrate the first anniversary of repealing of Section 377. The initiative will provide a platform to share stories and highlight the various challenges faced by LGBTQIA+. The concept of this campaign majorly aims at educating the masses about the pride community.

RED FM has joined hands with Naz Foundation and Breaking Barriers – a project by students of Tagore International School, Vasant Vihar, Delhi, to sensitise the society at the grass root level.

RED FM is targeting the children at a young age so that they become compassionate and kinder towards LGBTQIA+ children.

To support this belief, various workshops are being conducted in schools to provide a safe and respectful learning environment for everyone. Trained and certified counsellors accompanied by RED FM’s team and RJs are conducting the workshops.

Speaking about this campaign, Nisha Narayanan, COO and Director, RED FM and Magic FM, said, “Looking at the status of LGBTQIA+ community in India, it is high-time we start educating the people about them. Everyone should have the right to openly appreciate and practice who they are and love who they want. At RED FM, we believe in supporting this movement through our humble initiative ‘Pride Ki Side’. We want to raise awareness in the public about the challenges faced by them. We hope more people will come forward, share stories and help empower each other. Our vision is to create an inclusive environment and encourage our audience to adopt a progressive and compassionate outlook towards the LGBTQIA+ community.”

Commenting on the association, Anjali Gopalan, Founder and Executive Director, The Naz Foundation Trust said, “I am so happy that RED FM has taken this step to highlight LGBTQIA + issues. The Naz Foundation (India) Trust is proud to be part of this journey.”

To ensure maximum outreach, RED FM has also introduced a daily special morning show on their radio channel with a counsellor. This engaging and interactive format of the show will address queries and problems of the community who face bullying, hatred and discrimination at institutes or workplace.

Besides this, RED FM has also invited a well-known LGBTQIA+ influencer at their studio who will share stories of courage in dealing with cyber trolls, verbal harassment, and how they moved-ahead and dealt with such situations.

The campaign, which began September 4, runs till September 13.

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Dia Mirza supports BIG FM’s green Ganesha initiative

To spread awareness about using eco-friendly Ganesha idols, BIG FM held a two-week-long contest and 15 winners were felicitated with a Tree Ganesha by Mirza

e4m by exchange4media Staff
Published: Aug 30, 2019 7:06 PM  | 3 min read
Diya Mirza

For the 12 th year in a row, BIG FM has brought to light the importance of celebrating festivities in an eco-friendly way through Ramky’s BIG Green Ganesha.

The initiative promotes the use of eco-friendly Ganesha idols and its celebration with minimum environmental damage. RJ Rani, the face of Ramky’s BIG Green Ganesha initiative, hosted the event, which was graced by actress Dia Mirza, Sujiv Nair from Ramky Enviro Engineers Ltd and Ram Kharpuriya, Director - Greenland Farms.

15 lucky contest-winning listeners were felicitated with a Tree Ganesha by Mirza, at the BIG FM office.

To spread awareness about using eco-friendly Ganesh idols, a two-week-long contest was held and it resulted in widespread response from listeners across Mumbai. BIG FM Mumbai associated with Tree Ganesha as they create eco-friendly idols which are made of natural soil and also melts completely after immersion in water bodies as compared to non-biodegradable options that create pollution.

Commenting on the initiative, a BIG FM spokesperson stated, “BIG FM has always tried to bring about a positive change in society. BIG Green Ganesha has been our on-going initiative for the past twelve years which is amplified through on-air and digital channels. We at BIG FM believe in ‘Change starts with you’ and through this campaign tried to raise awareness on the environment pollution created with non-biodegradable idols. The campaign has been very successful till date and we are happy and proud that we as a medium can offer our listeners entertainment with purpose.”

Nair, Chief Human Resources Officer of Ramky Enviro Engineers Ltd, commented, “The Green Ganesha initiative is our contribution to the environment. Being in the space where we closely experience the hazards that affect the environment, we are trying to make Green Ganesha an awareness campaign and save the environment from the use of harmful products. Through this we urge the people to acknowledge an environment-friendly celebration by adopting the use of eco-friendly products.”

Mirza added, “I am very happy to be here. Moreover, I am extremely grateful to BIG FM for this campaign that has been raising awareness over the last 12 years. For the past few years, I have been associating with beach clean ups post the Ganpati Visarjan and it’s very disheartening to see the remains of the idols washed back ashore. Three years ago, Dattadri (Kothur of Tree Ganesha) and I made one of these tree Ganeshas together and it was a beautiful feeling. The happiness you feel while doing something for the better good just elates you to a whole new level. I urge more people to opt for eco friendlier methods, for not just their Ganpati celebrations, but in their day-to-day activities as well.”

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Radio Adex: Ad volume sees 8% decrease in indexed growth in Q2 2019

Paytm.com continues to be the top brand to advertise in the services sector in the first half of both 2018 and 2019

e4m by exchange4media Staff
Published: Aug 21, 2019 8:31 AM  | 2 min read
Ad ex Radio

The recent Radio Adex report for ad volumes in the medium for the first and second quarter of 2019 shows 8 per cent decrease in indexed growth.

In the first quarter (Jan-March), the service sector had 31 per cent share which came down to 26 per cent in the second quarter (April-June). The retail sector saw increased share in the second quarter. From 8 per cent in the first quarter, the ad volumes from the retail sector increased to 11 per cent. This was the time when IPL, General Elections and World Cup were ruling the roost.

Interestingly, Banking/Finance/Investment sector which was one of the top advertising categories in the first quarter with 12 per cent share, doesn’t find a place in the top five super categories in the second quarter. Education makes an entry in the top five list for Q2 with 10 per cent share. Auto jumped from 8 per cent to 10 per cent, while food beverages declined from 10 per cent to 9 per cent.

If we consider the ad volume in Radio for the first half of 2019 vs the first half of 2018, the indexed growth saw a decline by 9 per cent. Services continue to take the maximum share. In 2018, it was 30 per cent share while in 2019, it is 29 per cent share. Retail, Food & Beverages, Banking, Finance and Investment saw similar shares this year as was in 2018. Auto moved from 8 per cent in 2018 to 9 per cent this year.

Paytm.com continues to be the top brand to advertise in the services sector in the first half of both 2018 and 2019. Google Pay takes the next spot this year as compared to Amazon.in in 2018. Google, Cars24, Yahoo Cricket were the other brands which were a part of the top 5 brands in the first half of 2018. This year, Cars24 remained constant while there has been an addition of Hotstar and Phonepe in the list.

In the retail sector, except for Home Centre (Koz), all the brands that advertised on Radio in the first half of 2018 are missing from the top 5 brands list of 2019. While last year there were Great Eastern Trading, Central (Pantaloons), Max Retail, and South India Shopping Mall, in 2019, they are replaced by Alishan, Reliance Trends, The Chennai Silks and Lifestyle. In the Food and Beverages category, the Pan Masala brands continue to make a mark.

The cars category has jumped from 5 per cent to 7 per cent shares on radio, when compared to the first half of 2018 vs the first half of 2019. Properties/Real Estates have the maximum share of 8 per cent in 2019 compared to 9 per cent in 2018.

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FM Tadka goes for makeover with ‘Apni Suno’ campaign

Apart from the new positioning statement, FM Tadka also sports a new logo indicating dialogue within for a positive change

e4m by exchage4media staff
Published: Aug 19, 2019 10:53 AM  | 3 min read
FMTadka

Three months ago, management at the Patrika group decided to go for a makeover of FM Tadka. And just two weeks back, the revamp exercise reached a climax at film studios in Jaipur with RJs all across the country practicing steps for the new jingle video having both an aspirational and inspirational feel to it.

The radio network, spanning six states and 18 cities, started its teaser campaign on August 1 with a mascot named Mr. Mannki who ignited people's minds on the new message hidden in its pose which became quite a hit amongst listeners.

The campaign garnered praise from celebrities across the spectrum. Singers Sukhwinder Singh, Hariharan, Tochi Raina, Aastha Gill, and Hindi film industry stars like Tusshar Kapoor, Mallika Shehrawat, Urvashi Rautela, Sonali Kulkarni, director Nitish Tiwari, Super 30 founder Anand Kumar, comedians Shekhar Suman, Sunil Pal, Raju Shrivastav and sports stars appreciated the concept when it was shared with them during their visits to FM Tadka. The campaign, Apni Suno, talks about making a transformation in life.

“As a country, we have always followed Gandhi ji’s three monkeys, but now the fourth monkey Mr Mannki came with a message- to bring a positive change in your life and to the destiny of the country- Apni Suno. This network philosophy was aptly revealed on Independence Day,” the network said in a statement.

“From students as environment crusaders, young innovators to reality stars from smaller cities- there are many examples of people listening to themselves and carving a new life for themselves. It is this clarion call that FM Tadka is bringing to its listeners and propagating through roadshows, cinema, mall tie ups and artists across the country,” the statement read.

 Gaurav S Karrir, the National Programming Head, further reveals, “The prospect of a product change around was quite exciting. We took innovative ways like making Mr Mannki our mascot, mask inserts in newspapers, celeb led Apni Suno life changing stories and using Patrika power in digital, outdoor, print and tv to make people notice the new message of Apni Suno”.

 Saurabh Bhandari, National Head Marketing, Patrika Group, who has seen the radio product evolve over the years, applauded team Tadka and shared his vision, saying, “We at Patrika Group always believe to bring change in people’s life. Our endeavour FM Tadka's ‘apni suno’ positioning is yet another step in same direction, there has been a deep study and long research behind this, we are confident listeners and our trade partners will continue their love n support to FM Tadka.”

 Apart from a new positioning statement, FM Tadka also sports a new logo indicating dialogue within for a positive change. Shades of blue pointing at freedom of expression. The core TG now is 16-30 with music starting from 2008 and the playlist focused on melody.  FM Tadka's flagship Jaipur station now has a new team of RJs making the entire station live with focus on social impact plus technology and sports segments.

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