Radio will see a growth of 15 to 20% YoY: Harrish Bhatia

MY FM, managed by DB Corp, bagged 14 new frequencies at a total cost of approximately Rs 32 crore. A rather prudent buy, one must add, when one compares with the final price for a few individual channels.  The stations have been picked post careful analysis and the group’s existing infrastructure and learnings in specific markets and regions. Zeba Anwar from Adgully.com spoke to Harrish Bhatia, CEO, MY FM on the station’s auction strategy, future plans on FM universe at large. Excerpts of the interview:

AG: What would be your strategy for new territories?

Harrish Bhatia: For us the only new territory would be Maharashtra, but in a way even it is also not new because we already have a presence in Nagpur. Our strategy has been very clear from day one: to always be customer (listener) centric. There will definitely be nuances specific to different markets like Nashik, Aurangabad etc. Hence we would definitely do our homework before we go on air and understand listener preferences as well as the market per say.

AG: Were the spends in sync with what was planned? Any stations you missed out on?

HB:  There was an amount which was kept aside as per planning and it was a group strategy. We were very clear in our mind that we want to focus on tier 2 tier 3 markets and the money was spent keeping the broad strategy of the company in mind. As for the stations we wished for, I would say Patna. However, we realized that it would be difficult for us to make money there as the asking price increased, so we had to drop Patna.

AG: What are the key things that one should take cognizance of while managing FM stations?

HB: Well, there are always three to four things which need to be kept in mind. One should know that with radio you have to keep the cost under control and one has to be consistent in being a very efficient company. If you are not efficient, you can’t make money in radio.

Secondly, every city is different so we follow the strategy of customer centricity. It means that whatever you do on radio whether before launch or post launch, you must test it with the consumers and tweak and modify it based on their feedback. We do extensive sampling before we go on air and once it is on air we again do a dipstick. It is true of station in totality as well as individual programmes.

Thirdly it’s a local medium so one needs to keep local customer in mind as in what are their expectations and preferences, as in India taste changes every 100-200 Kilometers. You need to be very alert and be open to market needs and create things according to the customers.

AG: When do the new channels go on air?

HB: I think, it should take about 4-6 months because the new stations will have to put up a new compiler and other needed things. Although infrastructure is ready in these stations, it would still take about 4-6 months at the least.

AG: In some of the cities final price was way higher than base price.

HB: Yes, in some of the towns demand was very high, hence the prices too went high. But I am sure those who have bid must have done their homework well. As most of them have been a part of FM scenario for 7-8 years at the least, they know the business and returns it would get.

AG: Do you see consolidation of FM as a good sign?

HB: Consolidation started happening much before the Phase 3. We have seen a big print group buy another big radio company, and how another radio company wanted to go to yet another company. Consolidation is good for FM at large as that is how the growth would come. If you have too many players, for example like the news television, the industry struggles with profit. I think it’s good that it is getting consolidated.

AG: How do you plan to ride the digital wave?

HB: We have not yet taken a conscious decision on digital front. The Government policies are yet not clear on digital. We would be ready with a plan once we have more clarity on this front. The worldwide statistics, meanwhile, says that FM does well on its own.

AG: Also are we going to see any changes in the business model in the coming time?

HB: No. right now we are looking for expansion. Five years from now I can’t say but for these five years, I don’t think we are in need of any drastic changes.

AG: Where, do you think, radio is headed from here?

HB: Future of FM is great. As I said, FM will grow; it would emerge as the right place for people who want to grow further in life. It will offer more jobs now; I believe that the industry will have around 5000-6000 people. Let the Phase 3 fully launch and expand, I believe another 2000-3000 people will be added.

AG: Last question, do you see radio’s share in media spends increasing?

HB: Yes, because radio is one of the most promising media bracket right now and today it is contributing about 3-4% of ad spends. We see it increasing to 7-8% with the coming of new FMGC brands and with the completion of Phase 3.

I think Radio itself will see growth of about 15-20% on annual basis. Intelligent clients know that in this world of disruption there are too many distractions. The customer is not always available, be it TV, Print, radio, digital or outdoor. Hence brands need to have a cross media strategy to get maximum mileage and reach.

zeba@adgully.com