Industry leaders witnessed a positive outcome during the time with a 50% value growth in revenue as compared to pre-festive months and saw a 75% recovery level from the pandemic downfall
Just like the OOH sector, the radio industry trod a rocky path with dwindling ad spends at the onset of the COVID-19 lockdown. There was a strain on the revenue front in Q1 and Q2. According to TRAI in the APJ quarter, for 366 private FM Radio stations, the ad revenue generated was Rs. 98.41 crores as against Rs 400.64 crore generated for 367 private FM Radio stations in the JFM quarter.
The festive season has always been a time for media companies to meet the targets for the year. In India, the festive season sees tremendous growth in business with about 40-45% of annual business taking place during this time. This year, with the ongoing pandemic, the radio industry saw sectors like Electronics, BFSI, Automobile, FMCG, Consumer Non-Durables and e-commerce advertising on the audio medium, bringing some respite from the early days of the pandemic.
e4m spoke to Radio industry experts to talk about the revenue growth they witnessed this festive season and the brands that contributed to their success story.
Festive Season Spends: Growth and Decline Abraham Thomas, CEO, Reliance Broadcast Network Limited sharing his perspective said, “The festive season has always been a period to look forward to for the radio industry as many brands leverage the medium’s expansive reach to engage with their target audience. We have seen about 50% value growth in revenue as compared to pre-festive times at BIG FM.”
Thomas stated, “Marketers have leveraged the festive opportunity, thereby leading to a significant spike in ad spends. This season also sees many offers, discounts by brands that the consumers are happy to avail, especially in the current times with people engaging in purchasing only essentials all year. This is the time when they tend to splurge. During such times, radio becomes a preferred partner for brands owing to power to influence the masses across the country, high engagement and RJs being a trusted voice. The market has seen a growth of about 40% in ad-volumes as compared to pre-festive times and BIG FM too has shown similar growth.”
According to Ashit Kukian, CEO, Radio City said that this year positively from a volume perspective and comparing volumes to last year, this year we saw a volume increase in a marginal percentage. “It has been a positive sign from an industry perspective. The count of advertisers has also increased from last year. The Festive season extended right from the second half of October to the beginning of November which has helped this year. The first half of the year saw a -50% of volume de-growth which has moved into a 50% growth from the last months. That is why festive revenue was a positive story after a lull of 6-7 months.”
Preeti Nihalani, Chief Revenue Officer, Mirchi remarked that after a disastrous Q1, where volume dropped 75% and Q2 with -30%, October and November combined volumes have come back to previous year’s level, which is moderately positive.
Did festive spending come as a counteractant for revival? Thomas remarked, “The festive season usually witnesses 40-45% of the annual business occurring during this period. We have seen sizable growth in ad spends with brands leveraging the strengths of the medium. We have reached about 90% of pre-COVID-19 times in volume as well as market and about 70% of the value. Also, we believe the radio industry is already on the path of recovery and the festive season is further helping accelerate it, shooting the revenue up significantly.”
Radio City’s Kukian shared, “The festive spends has helped in the revival growth. In the first quarter, the revenues were down by 70-80% which got corrected to 70% kind of scenario in the second quarter. This has brought it to a 60% level in terms of recovery over the last quarters. With festive revenues, we have reached a 75% recovery level.”
Mirchi’s Nihalani said, “Growth in volumes has given the Radio sector a big breather, but unfortunately there is a pressure on yields and thus revenue growth is a bit behind volume growth. We are hoping that this momentum in volumes will continue and pricing will be corrected as there is more consistency in demand.”
Talking about how they have stayed ahead of the game during this pandemic market environment, Nihalani shared, “At Mirchi, we off-set some of the radio revenue shortfalls through non-radio activities in the Digital and Live businesses of ours. We recently also re-branded ourselves from Radio Mirchi to Mirchi. We are no longer a radio-only company, 35% of our revenues are generated from non-radio/solutions business.”
Brand activity Thomas commented, “During this period, categories such as Automobile, FMCG, Consumer Non-Durables and E-commerce are significantly active. At BIG FM, we have seen good engagement from the Real Estate & Construction category. Apart from this, brands from sectors like electronics, Steel Industry, Oil Refinery and Jewellery have also come on board during the festive season.”
Talking about the brands that contributed to the growth Kukian shared, “The category that helped reach this kind of positive growth is Real Estate. Surprisingly Real Estate in the last few months have been really doing well and has been a growing category recently. Followed by the Automobiles sector which has been a big category spender. Food and soft drinks is another, which is not surprising because consumption continues to happen and is only growing. With Radio primarily finance brands have a good relationship and it is a growing category. There is also a lot of banks and insurance companies advertising on the radio. These are the categories that have grown and are contributing to radio spends in the last three months.”
Nihalani signed off by saying, “Growth in volumes is not consistent across the categories. FMCG, Auto, Real Estate, BFSI, E-com, and OTT players have led the growth. These categories contribute to 50% of the volumes.”