Video did not kill the Indian radio star – not yet
Radio cityhas reported revenues of ₹87.02 crore in H1 2018-19 along with a CAGR of 34%, while Radio Mirchihas reported a 36% YoY growth.
- The radio industry is growing with ad spends also increasing.
- Experts believe that the industry is not threatened by other popular platforms like Netflix, Amazon Prime and instead complements their growth.
Leading radio stations have reported a great year with revenue hikes and expect higher momentum in the coming years.
Music Broadcast Limited, which hosts Radio City, has reported revenues of ₹87.02 crore in the first half of the financial year, along with a CAGR of 34%, while Motilal Oswal has reported that Entertainment Network India Limited, which hosts Radio Mirchi has reported a 36% YoY growth.
“In the last 3 years our revenue CAGR has been 15% which is almost double than that of the industry. H1 was expected to be subdued due to lingering impact of GST and demonetization, but we are delighted to witness an upsurge in H2. We have delivered a margin of 33% despite investments in our new stations. As the economy recovers, we expect to keep up the momentum in the future too,” said Apurva Purohit, President Jagran Group & Director, Music Broadcast Ltd.
Most experts believe that 2017 was a bad year because of multiple reasons – effects of demonetization, real estate law, RERA, and the introduction of the Goods and Services Tax (GST). After a subdued 2017, where the radio industry grew at only 3%; in 2018 the industry at large grew at 9.5%.
“Most of these effects reduced in 2018, but media continues to remain under pressure. The print and OOH business have faced more pressure. Radio and TV have done better,” said Prashant Panday, MD & CEO, Entertainment Network India Limited (ENIL).
Despite the increasing popularity of OTT platforms, like Netflix, Amazon Prime and Hotstar, which is consuming a large part of the Indian consumers time, radio has managed to stay alive. Global giant Spotify too is all set to launch in India which could become a big hit with millennials because of its popularity abroad.
As per a 2018 KPMG report, radio garnered 7.9% growth in ad revenues in FY 17-18. According to a FICCI report, the industry is expected to grow at a compounded annual growth rate of 16.1% between 2016 and 2021 and is projected to be a Rs.4780 crore industry by 2021.
The industry believes that radio has transitioned from being a medium that is under threat of other rising media but instead is a part of the latter’s growth journey.
“We believe radio as a medium, complements television where it improves the efficiency of a TV plan because of the cost effective reach it adds; and is also complementary to new age digital plans where radio can be used as an awareness building medium to direct traffic towards PVs and clicks on digital,” said Purohit.
Advertising from radio too is a market that can’t be ignored. Global media network GroupM in its report – This Year, Next Year 2019 – stated that India is predicted to be the 10th fastest growing country on ad spends across the globe – where radio is headed to grow by 15%.
“When the economy slows down, or major advertisers face stress, they turn more towards consumer offers, and hence towards radio. Radio makes print and TV work harder. Radio is the last medium consumed before a consumer enters a store, so it helps increase footfalls. In cars, 80% of all cars are tuned into radio,” said Panday. Mirchi in just Mumbai and Delhi, has a weekly listenership of 7 million people.
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