India’s radio industry shrunk by half in 2020 — from Rs 3,110 crore in CY19 to Rs 1,430 crore in CY20 — in the wake of the pandemic. As per the FICCI-EY Media and Entertainment Report 2021, the industry is expected to recover partially in CY21, ending the year with a total revenue of Rs 2,330 crore, and reach 2019 levels only by 2024.
Radio channels are eagerly waiting for on-ground events to kick off to revitalise their revenue. In the meantime, they are relying on digital solutions to supplement their core advertising revenue stream. In early 2020, it was estimated that non-FCT revenues, or those from integrated solutions, account for 7-8% of the total revenue earned by the medium. This has grown significantly since March 2020 — for some radio channels, this accounts for 15-20% of their revenue. By 2023, the FICCI-EY report predicts, radio broadcasters are expected to earn about 25% of their revenue from channels like OTT, AR/VR radio, podcasts, audio influencers, etc.
Between 2015 and 2019, the radio industry had been growing at 7% CAGR, as per a GroupM report. Since 2019, however, the industry has been on a downward trend — revenues fell 7.5% in CY19, as per FICCI-EY — and the pandemic made things worse thereon. Radio commands about 2-3% of India’s overall advertising pie.
Typically, retail outlets and brands in the FMCG, health and wellness, real estate and education categories advertise on radio channels. “Radio is a preferred partner for brands owing to its mass, local reach and high engagement,” says Megha Ahuja, VP – digital media planning, Carat India.
But other media tend to have an edge over radio. “Digital is highly measurable and TV viewership is measured by an industry body. Radio, on the other hand, does not have third-party measurement; advertisers need to rely on radio channels themselves for measurement,” says Jehil Thakkar, partner, Deloitte India.
As a result, advertisers find it challenging to trace a clear path from airing an ad to generating a lead, and making a sale.
Radio players are, hence, developing digital assets that they can monetise. Mirchi, Entertainment Network India’s radio brand, dropped the ‘Radio’ prefix in December 2020 in a bid to “pivot from a pure play radio company to a full-suite solutions provider for our consumers and advertisers”. The company’s CEO and MD, Prashant Panday, notes that core radio (FCT) revenue was down 51% in FY21 over FY20, whereas multimedia solutions led revenue was down only 19% in the same period. “Our digital business was up 34% in FY21 compared to FY20. Going forward, multimedia solutions will fare better than core radio,” he adds.
Going digital includes mirroring radio content on social media channels, YouTube, and syndicating content. For instance, Radio City shows including Babber Sher, Salaam-e-love, Kissa Crime Ka, Bharat Ki Amar Kahaaniyaan and Invincible Indians are available exclusively on Spotify. “The profile of audiences on radio and audio OTT platforms are different. By partnering with audio OTT platforms, we are expanding the reach of our content,” says Ashit Kukian, CEO, Radio City.
About 15-20% of Radio City’s annual revenue comes from non-FCT solutions. In the long term, Kukian expects this to go up to 35%.
Big FM entered into a content partnership deal with Spotify last year. Leveraging radio jockeys to create shows exclusively for audio OTT platforms is the next logical step, say analysts. “Audio streaming platforms have approached us to create shows because of the talent we have in-house,” says Abraham Thomas, CEO, Big FM.
The next step for radio broadcasters will be to direct listeners to their own digital platforms. Mirchi’s Panday says the company, which has not focussed on podcasts until now, has “big plans” for FY22. The radio channel plans to launch its own podcast platform by the end of the current fiscal.
Radio City revamped its app in 2020 to include not just audio content, but videos, too. Big FM, which streams live radio on Big Radio Online (BRO), has been building online destinations for its audio content, informs Thomas. Analysts say that to reap benefits, radio channels would need to invest in promoting these platforms.