FM radio stations cut on broadcast hours to battle recession

FM radio stations cut on broadcast hours to battle recession

MUMBAI: Private FM radio operators are shutting down their late hour broadcasts in smaller cities as the heat is on to shave off costs in a downturn economy. Radio Mirchi, the top FM radio broadcaster in terms of revenue, has pulled the curtains down from 1-6 am in 20 smaller stations.

 The axing has taken place in most of the stations located in B, C and D towns that include Kolhapur, Nashik, and Aurangabad in Maharashtra and Mangalore in Karnataka. Says Radio Mirchi CEO Prashant Pandey, "Both electricity and royalty costs are exorbitantly high. We would save anything between Rs 15-20 million. In terms of our cost-base, this would be around one per cent of our annual expenses. Though it looks small, in radio business there are relatively few controllable costs."

Radio Mirchi is not alone to swallow this harsh medicine. Big 92.7, which has 44 stations across India, adopted this cost-saving initiative and stopped its night broadcast operations in all its non-metro stations from 12-6 am.

Says Big 92.7 FM CEO Tarun Katial, "Big 92.7 FM started this exercise six months back. Shutting operations at night is a good cost measure to reduce wastage in business. We might as well put our resources in best use for building value for our listeners and advertisers rather than putting them in use at dead hours."

Some radio broadcasters have incubated this strategy of staying mum in the ‘dark‘ hours right from the start.

Says Radio One CEO Vineet Singh Hukmani, "We have always been silent between 1-5 am since there is low listenership at this time zone. We took this decision far before the recession happened. However, from Diwali up to New Year, we convert to a 24x7 radio station because during a festive season, we can have listeners hooked on to us 24 x7."

So how much can one save? Says Hukmani, "When you are running a radio station, there are two large costs associated with it - music royalty and power and transmission. If you are not operating for four hours a day, you can save around 15-16 per cent of your operational costs."

BAG Films‘ Radio Dhamaal, which runs 10 FM radio stations across India, has also never operated at night since its inception.

"We are closed from 12-6 am. Since these radio stations are located in small towns, we don‘t have that kind of a listener base in the night as one finds in metros. Shutting operations makes sense to us. By not operating at night, we save around 3-4 per cent of our operational costs," says BAG Films and Media Ltd. managing director Anurradha Prasad.

Not all radio operators, however, are willing to walk down this road.

Red FM, which has operations in the three metros of Delhi, Mumbai and Kolkata, finds the market dynamics totally different. Says Red FM COO Abraham Thomas, "The market dynamics of each city needs to be considered separately and it‘s up to each station to determine the cost benefit analysis before taking such a measure. Currently, the costs in smaller cities are not hugely behind the bigger cities while the revenues are disproportionally lower. All costs must get rationalised for the viability of the stations in the smaller cities. Shutting operations at night could be a trend in smaller markets where the listenership is lean during these hours."

Radio City doesn‘t find the need to rework on its 24-hour broadcast strategy. "We are up and running round-the-clock across our 33 radio stations," avers Radio City EVP and national sales head Ashit Kukian.

Agrees Fever FM station head (Delhi and Mumbai) Neeraj Chaturvedi, "We have radio stations in Mumbai, Delhi, Kolkata and Bangalore. As we are a youth-centric radio station, we have a good listener base in the night. We are live till 4 am. From 4-6 am, we play back to back music."