Regulators

TRAI: FM Radio ad revenues move up in Q2-17

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BENGALURU: After the recent slump in advertisement revenues by private FM radio stations in the quarters ended 30 June 2016 (Q1-17) and 31 March 2016 (Q4-17), the trend seems have been averted, albeit marginally for Q2-17 (quarter ended 30 September 2016, current quarter) according to the data released by The Telecom Regulatory Authority of India.

According to TRAI data, radio combined ad revenues reported by 259 stations were Rs 502.13 crore or an average of Rs 1.94 lakh per station for Q2-17. This was slightly higher than the Rs 1.92 crore (combined revenue Rs 468.08 crore from 244 stations)for the immediate trailing quarter. Q2-17 ad revenue was however short by about Rs 10 lakh per station as compared to the corresponding year ago quarter for which TRAI reported combined ad revenue of Rs 481.56 crore (2.04 crore per station) from 236 stations.

Please refer to Figure A below for FM Radio Ad Revenue over a five year plus period spanning a 22 quarter period starting with the quarter ended 30 June 2011 (Q1-12) until the quarter ended 30 September 2016 (Q2-17) as per TRAI data. The amounts are in Rs crore and rounded off to the nearest decimal place in the case of combined ad revenue and two decimal places in the case of Average Revenue per station.

public://r-fig1.jpg

In absolute terms, combined Radio ad revenue in Q2-17 increased 4.2 percent and 7.3 percent year-over-year (y-o-y, as compared to the corresponding quarter of the previous year) and quarter-over-quarter (q-o-q, immediate trailing quarter) respectively. Average revenue per station in the current quarter declined 5 percent y-o-y, but increased 1.1 percent q-o-q. The total number of stations in Q2-17 increased 9.7 percent y-o-y and 6.1 percent q-o-q.

Please refer to Figure B for y-o-y and q-o-q changes

public://r-fig2.jpg

Conclusion

Overall, despite the year-end and first quarter of a new fiscal drops, ad revenues as well as ad revenues per station show a linear increasing trend as more and more advertisers have begun to understand the value proposition this very local medium with a pan-India footprint can offer. Further, the third quarter of the fiscal (Q3, quarter ended 31 December) is also the festival quarter of the year in India – a sweet quarter as far as the radio industry is concerned. However, It remains to be seen how demonetisation has affected ad revenues for the fledgling medium for Q3-17. As mentioned above, during the third quarter of a fiscal radio ad revenues have historically been the highest.

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