Much Hope In The Air

A lockdown was announced with immediate effect in March 2020 and like every other industry in India, the media fraternity too sensed a wave of shock. With prospects of production in both manufacturing and the services sectors being curtailed by the lockdown, most advertisers cut back on their discretionary spending to preserve cash. Like the rest of the media and entertainment industry, most radio channels found their revenues from advertising in April and May to be negligible. A slight recovery in advertising revenues though, was evident in the month of June.

According to a recent report, the radio industry had grown at a CAGR of 6.68 per cent for five years from FY2015 to FY2019. However, contraction in the radio industry by 11.1 per cent during FY2020 was a relapse and the industry size now resembles that of FY 2017. Preeti Nihalani, Chief Revenue Officer (CRO), Radio Mirchi, admits that like most industries, radio too suf-fered a loss in advertising revenues. Overall, profitability of the industry increased, however, owing to the massive cost cuts that radio channels undertook.

"Businesses across the country have already started picking up and the economy is steadily beginning to stabilise again. Radio is a powerful medium, and its clients have got huge value by advertising on it. A great learning has also been to reduce costs and manage budgets more efficiently, so I think the business will recover in FY 2022, a quarter behind the economy which is currently expected to recover in Q4 FY 2021," says Nihalani.

Ironically even as revenues got constricted, a growth in listenership was evident in radio channels through the lockdown. In an independent survey conducted by the Association of Radio Operators, the total daily duration of listenership increased by 28 per cent during the lockdown, supported by a significant increase in average daily duration per listener and a slight increase in the number of listeners.

The trend is believed to have been partly spurred by the work from home culture that set in after movement got restricted because of the pandemic. Outdoor activities became impossible and radio audiences forced to stay home, tuned in more often to their favourite channels. The duration spent listening to the radio shot up phenomenally and new listeners joined the flock.
There were no significant technological disruptions during the six-month-long lockdown, so content generation for radio channels remained unhindered. To cope with low spends on advertising, radio channels have been experimenting with newer avenues of earnings.

Says RED FM and Magic FM Director and COO, Nisha Narayanan, "Covid-19 has redefined the way any business in any industry is operating. The radio industry was already struggling due to the liquidity crisis before Covid. Later on, it was hit badly because of the pandemic with nearly negligible revenues in the first few months of the lockdown."

Going Digital
Narayanan was optimistic about the future of the industry and said that in the days ahead collaborations would prove a great way to achieve business and marketing objectives. "It's not that digital was not part of the strategy before Covid, but the pandemic has sharpened the digital focus for the industry. We now use our digital and non-traditional revenue strengths as a key element for developing solutions for advertisers for the coming times ahead," says Narayanan.

To stay relevant to their listeners and adapt to the growing trend toward digitisation, radio players have continued to build on their digital and OTT strategy. Such integration with digital has provided radio channels opportunities to monetise content and expand their revenue streams.

The air waves certainly are pregnant with hope and radio channel owners expect to see happy days in the year ahead.