MD and CEO, ENIL
Transforming from analogue radio to digital radio, what are the challenges the radio ecosystem faced?
Let me clarify - when you say “digital radio”, it usually means “digital transmission” – HD Radio, DAB, DAB+, DRM etc – which we don’t have commercially in India. What we have is FM radio, which is analog. However, if you mean “internet radio”, we run 24 stations on Gaana right now. It is a whole different kettle of fish from FM radio. People consume it at their own convenience. The product is far more narrowly designed, because the target group is far more tightly defined, unlike FM radio, where a station must cater to a wide number of people spread across a whole city. Internet radio is also measurable – we get instant feedback on time spent by the listener, which songs were liked or skipped, time/day of consumption etc. Therefore, it can be designed in a far more customized manner for the chosen target group. I wouldn’t say it’s difficult for FM programming professionals to learn the tricks of internet radio. That being said, it takes a certain amount of time. Once they’ve learnt it. FM programming professionals thrive in making internet radio stations because they can use the data to fine tune the product. Radio stations built by OTT platforms cannot compete with our stations because they simply don’t understand music and/or programming!
Mr. Prashant Panday, MD and CEO, ENIL talks about the future of Radio in India
Scaling back on media buying, did the radio industry go through some major strategic changes for revenue?
Unfortunately, most radio broadcasters have adopted the age-old method to beat the slowdown brought about by the covid pandemic - cutting price, which does harm their interests. Mirchi has however always believed more in selling “solutions”, in which radio is but one component. For example, when we design a campaign to launch a mobile phone, we pack in multiple media vehicles – on-ground events, videos, social media, maybe even newspapers, OOH and TV. Radio forms the kernel around which the whole solution is built. We never offer FCT alone if we can help it. We have been doing this for 15 years. However, now with the pandemic, the solutions approach is finding huge traction. Advertisers now don’t want to simply buy media. They want solutions to the challenges they face. We gain from our experience in this area. As much as 1/3rd of our revenues come from Solutions. Within this, 11.5% comes from digital products (11.5% of total revenues). In a few years, we hope to make digital 1/3rd, solutions 1/3rd and core radio about 35-40% of total revenues. There is room to grow in each product line!
With increase in 5G penetration consumption, has accessibility of radio in India become wider?
By 5G, I am assuming you mean “data”, because 5G itself hasn’t been launched yet. Yes, internet radio is available to the 300 million or so monthly users on music OTTs. Gaana alone has about 200 million+ users, so Mirchi’s 24 stations are available to all of them. However, because of constraints imposed by music royalties, FM stations in India are not available online in a simulcast format. That’s a huge miss for all – the public, the music companies, the artists and the FM broadcasters.
How can the government aid in expanding and improving communication reliability?
I don’t know what you mean by “communication reliability”. But what the government can do to increase FM radio coverage and consumption to open up the spectrum very quickly and allow many more channels to come in. Offering all available spectrum with 400 KHz separation between channels (instead of 800 KHz today), will allow 15 odd private FM channels in each city, compared to the 8-9 today. After doing this, the government must redesign its auction process. Huge reserve fees in the past auctions killed auctions of both Batch 1 and Batch 2 of Phase—3. If it doesn’t reduce reserve fees drastically (possibly even down to zero) or change the auction process so that auction prices can go UP or DOWN (currently, prices can only go up), further auctions will be fruitless. Then of course the absolutely illogical ban on news and current affairs, when no other medium is similarly banned. There are so many points lying in the Government’s court, but there has been absolutely no action at all.
Do you think podcasts, content syndication has gained prominence with digitization of radio?
Of course, they have. Everything digital has gained prominence. The whole internet world is about infinite choices. It’s about consuming content on-demand. It’s about infinite access from around the world. Podcasts are an extremely interesting development in the audio space, even though their monetization is small right now. Podcasts do not compete with FM radio. They only fill up the content gaps left by very broadly defined FM radio products. In the US and other countries where FM radio is well developed, podcasts have not hurt radio. They have added to the overall consumption of audio.
Do you think Radio has largely helped in Education in rural areas during lockdown?
No unfortunately it hasn’t. Several reasons for this. First, there just aren’t enough frequencies available, so that a few could be dedicated to education. Second, the auction fees are so high, most broadcasters focus on entertainment on their current channels as that can be monetized the best. Third, the government has done nothing to promote differentiated content on FM radio. I think FM radio could be a very strong medium of education for the rural poor as well as the farmer community.
Are the non-radio solutions business a response to the affected radio industry?
Not for Mirchi. Like I mentioned earlier, we started “solutions” almost 15 years back, when conventional FM radio was still in its infancy and growing rapidly. But most other radio broadcasters have been forced to add a small number of non-radio products (they don’t offer solutions really) to their radio offerings. Most broadcasters package their RJs and their videos for release on social media. However, this is a tiny part of solutions. The bigger part – on ground activations, TV impact properties, concerts, college fests, Plain-Old-Telephone-System based solutions, web/app content, original content, podcasts, film promotions – there is so much more to Solutions. At Mirchi, we offer all of these. That too, at a hyper-local level in each of our 63 cities.
How has the reception been post rebranding?
The rebranding was not the beginning but the culmination of our Solutions/Digital transformation. We are already doing 1/3rd of our business through Solutions/Digital. So, the rebranding is not something new that needs to be tested in the market. However, post-rebranding, we have embarked on an addition to our Digital strategy. In addition to our focus on digital content, we are now also setting up our own web and app platforms. You will see action on this front by end 2021! Our platforms will carry a huge amount of audio and video content. Imagine 300 creative people making content every single day! Not one digital company has such talent under one roof. Mirchi will be the 800-pound Gorilla, which has decided to charge the internet! If all goes to plan, we should have as many users of our digital platforms as of our FM one in just 3 years from today (upwards of 50 million at least)!
After rebranding Mirchi, you have entered three MENA countries, what is the thought process behind this move?
We look at PIOs as a ready opportunity for us. Many of these people return to India once every few years. They are proud about their Indianness, their language, their culture. It’s but natural for us to take Mirchi into their homes, and their cars in whichever country they live in. That’s why we have launched Mirchi in the US, UAE, Qatar and Bahrain. We have plans to launch in more countries, but we will have to wait for the right opportunity – you don’t get FM or AM frequencies readily in most markets. In the US, we are also planning to launch app-based language stations, starting with a Telugu product targeting the Bay Area. There are a lot of exciting opportunities for us in global markets!
What kind of response do you anticipate in international markets?
We have had some great experience in the UAE in the last 8 years that we have been there. We rose to become the number 1 Hindi channel in the UAE! Even in Bahrain, where we existed earlier in a brand-licensing arrangement, our product was consumed by one and all. In the US, the response to our lone station in New Jersey is terrific – with people writing in with their accolades. We have just launched our Hindi product in the Bay Area also. In general, response to Mirchi is extremely satisfying in all markets we have launched in!