'In four years the mrkt will mature & experience a phenomenal explosion : Apurva S Purohit - Radio City CEO

With the government having completed the process of awarding the second round of FM radio licences, there's a huge buzz in the industry. Coming soon to a station near you will be new entries like Reliance (Adlabs) and the Sun Group (South Asia FM and Kal Radio).

In the middle of all this is Radio City, all of five years old, earlier part of Star group; now held by GW Capital. Music Broadcast Private Ltd, which manages the brand Radio City has won bids for 17 new cities, west India being the largest market in its kitty.
Radio City CEO Apurva Purohit takes pride in the fact that the bidding process has been done keeping in mind the sustainability factor. In an interview with's Manisha Bhattacharjee, Purohit also speaks in brief about how the policymakers decisions have smoothen the FM road. Adding further that now the entrants will have to push their brands by creating unique programming and attacking niche markets. Purohit also highlights how Phase II will see changes due to which the market will become very competitive.


What's your take on the radio industry as of today?

I think we are in a very exciting phase. The industry waited for four to five years for the second phase to open out. The good news is that whether it is revenue sharing or opening up more frequencies at various cities, the government has been fairly amenable to the requirements of the industry. The fact that there are many players showing interest is good news and this in turn will expand the growth of the FM radio industry.

All of us now have to push outwards rather than looking at a mere two per cent share. I think the industry leaders have to look at expanding the business. That can only happen in a sense when there is a push out from all the big players.

Could you elaborate a bit on the push-out aspect?

It will happen by trying to get more consumers to listen to radio. Even today, despite radio being around for more than 50 years, which includes five years since FM radio's first private sector push, the penetration has been only 30 per cent. So, while 90 per cent people in India own a radio set, only 30 per cent listen to it.

Obviously, the rest of them are not listening because they are not getting enough exciting listening options. So what are we talking about?

With new players trying out different kind of segmentation and attacking different niches, (so one push out happens from the consumer end itself, who will increasingly start listening). On the other hand, the organic growth will take place due to geographical expansion of FM markets that have not been exposed to FM earlier.

The industry is now looking at having niche stations?

Looking at the present scenario, the mass positioning is very well entrenched by the existing players like us. So for any new player, the intelligent way would be to go into the niche. Looking at the way certain players have pitched for, you can already forecast that someone like Mid-Day would be niche; HT Media may look at a niche segment too. They would have their strategy and it would be sound to go for niche.

There are lost of opportunities that can be explored in music itself. There are lots of non-music options. For example, people can have a chat show station, a classical music station; people can also have only Tamil music station itself across the country. There is enough and more scope in FM radio.

Would Radio City explore the niche segment?

We have done very well for ourselves as the mass entertainment station. And that's going to be the way for the future for us.

How different have you positioned your stations for the existing ones as well as for the future ones?

Typically, Radio City by the very essence including its name has been a very local flavored station. For example; Bangalore station has a combination of Kannada, English and Hindi languages. Delhi has a lot of Punjabi flavor, Mumbai is largely Hindi whereas, Lucknow has a tone of Hindi and Urdu. So, we will be looking at the language of choice of the local consumer. That's really going to be the localization. Apart from that, the flavor of the brand that we have built up over the years as positive companions, with soft and gentle music for listening pleasure will remain the same across the country.

The television landscape is exploiting the mobile platform to its advantage? Is radio industry also witnessing the same?

Increasingly and no doubt, there has been convergence of various things happening. But, where is the exploitation going to come from; radio exploiting mobile or mobile exploiting radio. Both opportunities do exist.

Further, the question arises who realizes the benefit? While we are open to anything, we will obviously be looking at new modes of distribution. At the moment, a lot of mobile companies themselves are offering radio and they are not restricting to a radio station. Obviously, they want to sell their products, the more stations they are able to give to their consumers or the more radio station neutral they are the better it is for them. So I think, the push back is happening from there itself, which suits us.

What would be the present size of the FM radio industry in terms of ad pie and viewership?

The radio advertisement pie is worth Rs 300 odd crores (RS 3 billion). While, the FM viewership holds worth 30 per cent penetration of the whole universe.

The bidding process of Phase II is over, so what would be the next step?

This year will really go into building infrastructures. It is thereafter, that people will start defining the unique space they would like to enter. And certainly, in the next four years the market will mature and will experience a phenomenal explosion.

What is your estimate on the size of listenership that is likely to grow over two to three years time?

Well, it depends upon whether the new entrants are able to segment and offer different listening choices. Only then will it grow. Geographically, this will expand. Today, it is 30 per cent of the cities, tomorrow it will be 30 per cent of 91 cities.

Automatically, there is a huge reach that will benefit advertisers in return. Let's take Radio City, even if it remains 30 per cent, what we say is Radio City existing in four cities. And, later it will offer 21 cities to the advertisers in all the leading cities. So, 30 per cent of the 21 cities is far ahead of 30 per cent of four cities.

But the next level of expansion would be 30 per cent within the FM cities and with competition and more stations, the industry is expecting it to grow to 45 to 50 per cent.

'Fees paid to music bodies can range between five to seven per cent of the cost structure, which is fairly high'

Are radio players wrestling to have advertisers on board?

Already and increasingly, the advertisers are realizing that there is cost effective value to have it out on radio. So whether it is at the very primary level of adding frequencies or it is the level of local city given an add-on medium, the number of advertisers have started using FM has gone up. Both localization and frequency can work well with radio. You can select your cities or you can book 15 spots a day.

How much has advertising on radio increased?

Radio has shown the highest growth; it has grown 45 per cent last year.

What is the key slot for radio advertising?

It depends on the kind of audience, your station is targeting. The housewives slot is cheaper in comparison to the senior executives and the youths, which are expensive. Drive time has a premium attached to it. That is largely followed by the industry.

Radio City has identified very clear day parts. I don't think the other stations have gone that far in scientifically analyzing and defining the day-part segmentations. We have the mood-map in place. That's working very well with the advertisers' mood for our TG as well as the kind of programming depending on the mood-map.

Interestingly, a lot of radio listenership happens at home. Essentially there is no primetime to define. It is fairly stable across the day. There are peak hours at the two driving to work times; morning and evening.

What kind of brands does Radio City have on board?

We have practically all the large advertisers on board including; television channels, FMCG, mobile service, financial service and automobile services. And we were the first to push through retail advertisers on radio.

How do you manage to meet the dearth of manpower?

It is an issue; it is not just in radio, television, even outside media. It is difficult to find and especially in a situation, where within the industry, there is limited choice. It is a new and small industry, one has to look outside of the industry to meet the needs of manpower. We are looking at having staff strength totaling around 500 professionals for the 21 cities.

What about investment in infrastructure?

The infrastructure cost could range between RS 3 to 7 crores of the capital expenditure. We are reasonably comfortable in setting up all the new 17 stations in various cities. For the basic reason, we have been in the industry for over a period of five years and we are well-versed as to what exactly goes into running a station. It will not be so much of a challenge in getting the infrastructure up or the office space going. Secondly, we know the space we want to occupy, the kind of music to play and the brand thinking is all in place. So there's not going to be any radical shift there. The real challenge is going to be getting the right people. At present, we have already started with the hunt for RJ's.

Will Radio City be ready to experiment with different genres of music in different cities?

Well, as mentioned earlier, Radio City adds local flavor to each station. We are building a very close association with the industry. The music industry is exploiting Radio City as a platform for building new talent or investing in new talents. For example, at the Bangalore station, we did a showcase on the talents of the local bands. We believe that helping build new musical talents is also one of the key focuses of Radio City.

At our Bangalore station, the quintessential, old malayali uncle who lives in every society gives his advice. On the other hand, one and a half hour 'Altaf' concept, which will be on air shortly, we picked up the feature of Hyderabadi Rickshaw drivers, which is a phenomenon. 'Lingo Lella' and 'Sister Stella' were some of shows, wherein the City has incorporated the nuances of the city. In Mumbai, we have 'Kasa Kay Mumbai' and Lucknow holds the flavour of ghazals and shayari.

A lot of things have gone right for Radio City, which clearly demonstrates in the listenership share that it enjoys. It has constantly innovated, the fact that it has been there in spite of losses incurred due to heavy licence fees as a 24x7 radio station over the last five years. It has a good position image in the market. It has a clear and distinct position amongst the listeners; it is seen as a friendly, nice and happy station.

It is time to take it to the next level. We say that there is a lot of awareness, and a lot of positive disposition towards the station. Now, we can increase the consumers' involvement with it. Therefore, from a brand as well as from the product point of view, we have done a lot of changes. A clear prerogative on day-part segmentation as well as noting the mood-map and music mapping has been brought about.

On the outside, we tried to hardwire out position because radio is a very audio medium. Our consumers have an image in his mind, so we have tried to give a brick and mortar feel to that images via the brand campaign. We are aggressively trying to build the emotional connectivity with our listeners from feedback we get.

Does the radio industry have a rating system? What is the listenership of Radio City?

Yes, the main rating system to track radio listenership is the Indian Listenership Track – ILTS that is conducted by the MRUC (Media Research Users Council). Being early days for Radio, the system is present only in Mumbai and Delhi. Unlike television that has a comprehensive tracking system like TAM, ILT is a recall based survey, which will always have shortcomings. Listenership is defined as a person who claims to have listened to Radio yesterday. There is great fluctuation in the overall listenership figures in every ILT.

At the moment, it is claimed recall, there is no system that comprehensively monitors real-time minute by minute radio listenership. Radio Listenership in the rest of the cities in India is measured my NRS / IRS.

As per the latest figures available, Radio City has a listenership of 27.08 Lakhs in Mumbai and 41.09 lakhs in Delhi +NCR as per ILT. In Bangalore and Lucknow, the figures are 16.3 Lakhs and 7.1 lakhs respectively.

Now with the sudden spurt of interest that followed the unshackling of local FM, will the satellite radio station-WorldSpace that gives consumers sufficient radio choices among traditional radio broadcasters, is it a threat to FM? And will the new stations, get a fillip from new technology -- iPods and MP3 players?

WorldSpace is an interesting concept, but the reality is that internationally radio satellite is just two per cent of the entire radio pie. Essentially, there is not much of interactivity and no localization, which are the two unique features of radio. WorldSpace is as much as a threat as iPod and MP3 players.

No one ever anticipated the cell phones becoming a rage. My mind is that with newer technology, the time spent on listening to radio on the cell will expand. I don't think that it would eat into FM, it will co-exist. On the other side, you can also see with the advent of internet, other mediums like television, newspaper have not ceased to exist.

The Government has been fairly liberal with FM radio in Phase II, assuming that the government had also given a go-ahead with news & current affairs how different would the landscape have been?

It is very difficult to anticipate at the moment. The industry has been battling for an equal playing field vis-?-vis the television channels. Then, whether the radio station takes news & current affairs or has a mix of news & entertainment, it is left to the individual players.

If radio is given the choice to play news & current affairs, it is definitely good for the industry. Certainly, there is merit in getting news and current affairs. Well, the industry will further see segmentation. It will further expand the ad pie as well as the listenership universe.

On the other hand, multiple frequencies was another issue which has not been sorted out? Why has the industry been asking for multiple frequencies?

Multiple frequencies is an advantage, we can segment better. For example; if I have option of running three stations in Mumbai, then probably I will run on local language station, Hindi station or English station or chat station for that matter. So the choice of segmentation will expand far more dramatically.

At present, whatever changes has been brought in by Phase II, these are really the changes that were asked for. At the moment, the industry is not looking at multiple frequencies. The Phase II is just few months old, so people have to settle in it and let the market grow.

Recently, the Information & Broadcasting secretary SK Arora had made an announcement that the government is exploring Phase III of FM radio licences. Which are the smaller towns and cities is Radio City looking at?

It is too early to worry about it.

What kind of musical fee do you pay?

It is fairly high fee rate that we pay to the music bodies. And I think that's where some rationalization needs to be brought about. It is calculated per hour per city. With large of number of stations in the kitty, a consolidation in the amount has to be brought about. We are working with the industry to bring a rationale pricing.

It is a big cost. It can range between five to seven per cent of the cost structure that goes to the music bodies, which is fairly high.

Radio City has not won bids for cities such as Chandigarh, Kanpur and Kolkata? What has been you bidding strategy that helped you win the bids for the other 17 cities?

The bidding strategy revolves around the business plan. What we believe is the sustainable amount we have bid for. We have the licences at the lowest cost. We have got licences for worth 50 crores where everybody has paid close to 100 crores for the same set. Keeping in mind the business strategy and rational bidding, winning 17 out of 20 frequencies barring three has been fantastic.
Is Radio City looking for a foreign partner up to the extent allowed by the government?

Right now, we do not need to. We have everything in place, expertise as well as funding. And we have got enough money to run the stations.

How does it feel, personally, to be now doing radio biz after having done high profile business like advertising and TV?

Personally, it has been a very exciting journey. I have learnt a lot in every organization. There is a whole learning from the kind of job that I have been involved with at different stages and at various organisations. I have closely worked with people like Subash Chandra. Working with someone like him has been an interesting experience. Today, I feel satisfied that I have become a fairly well-rounded media person. I understand not only the planning and buying part of media from the advertisement perspective. I also understand the business of media. Now, working with Radio City, is indeed very exciting as the medium has its huge share of creativity.

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