Just when everyone moved onto the world of OTT and CTV, the radio proved that it was too soon to write it off as a medium in 2023. The year was eventful for the radio industry. From government initiatives to ad revenues, every aspect of the sector has propelled growth.
TRAI recommended the government allow private FM radio to broadcast news bulletins. Also, the government earned Rs 179 crore via FM Radio licences and permissions in 2022. There were also talks about making the availability of FM Radio on mobile handsets mandatory for all manufacturers.
According to TAM AdEx, compared to January-June 2022, there was a significant increase in ad volumes (72 percent) in January-June 2023.
2023 in rewind
Nisha Narayanan, COO & Director, Red FM & Magic FM said, “Year 2023, could be defined as the year of a major comeback for the radio industry. Our airwaves surfed on a double-digit growth both in terms of revenue and volume.”
Advertisers from across the retail, real estate, education, and government sectors occupied the larger part of the advertiser graph for the radio channel.
“It was delightful to witness non-metro cities taking up more space, almost outshining their metro counterparts still recovering from the post-COVID blues,” she added.
According to Radio City’s CEO, Ashit Kukian, despite hurdles like changing content consumption methods and the need for GST optimisation, the whole radio sector is embracing innovation.
But, Preeti Nihalani, COO, ENIL, Mirchi said, “In 2023, the radio industry witnessed a mixed experience in terms of opportunities and challenges. However, the situation improved later in the year, particularly during the festive season starting from August and leading up to Diwali in November. The boost was further amplified by major topical events like the ICC Men’s World Cup and State Elections across five states.”
Looking back at 2023, it’s clear that the radio industry faced some challenges, but it also found ways to adapt and make the most of key events to keep up the pace, she added.
Top highlights – 2023
Adaptation to new media
Abe Thomas, CEO of RBNL analysed, “In 2023, there has been a significant increase in the demand and acceptance for content consumption across radio, digital and on-ground. This multi-channel approach has presented substantial optimisation opportunities whilst also ensuring an immersive experience for brands and listeners alike.”
Kukian added, “The transition to digital platforms and streaming was a huge evolutionary step, allowing for on-demand listening and growing beyond traditional bounds. The industry adopted data analytics to better target specific consumers and improve personalization in programming and advertising. Podcasting has grown in popularity, providing a global forum for different content.”
With a focus on AI, gamification and cutting-edge technology, the radio industry has taken a futuristic leap, Thomas added. This integration predicted user needs, turning listeners into active participants and delivering a hyper-personalised, engaging interaction. This has also led to an increased demand and interest from advertisers across different sectors
As per Kukian, Automated Visual Radio provided a dynamic blend of audio and visual features, encouraging participation and interactivity. Better advertising chances via digital media resulted in a 25 percent increase in ad volume.
Recommendations released by TRAI on issues related to FM radio broadcasting with respect to increased DAVP rates, de-linking of Non-Refundable One Time Entry Fee from annual licence fee, allowance to private FM radio operators to broadcast news, built-in FM radio receiver in mobile handsets and more have acted as a colossal support. These are still recommendations but if implemented they will surely provide a boost to the radio industry, said the Mirchi and Big FM executives.
Challenges in the play
Well, the year 2023 wasn’t a cakewalk for the industry. There was slowed growth due to inflation, leading to reduced demand in specific consumer categories and advertisers being cautious with their spending.
Thomas underlined the radio industry has been specifically grappling with increased competition from new media. Additionally, unlike digital platforms, traditional radio faces limitations in audience measurement capabilities, making it a longstanding challenge for stations.
Generally, the economic conditions have been unfavourable this year, as per Nihalani. Inflation hampered consumers’ purchasing power. As a result, demand for goods was low, and advertisers spent less on brand promotions.
She further highlighted, government spending made up only six-seven percent of their overall business, which was down from the usual 13-15 percent.
What can be done better?
Narayanan suggests the industry as a whole needs to unite and form a uniform opinion on several aspects. And also resolving the royalty issues of music, which continues to be a problematic area between FM and Digital audio OTT platforms.
The industry as a whole and Radio City in particular too could have performed better in the domain of inventory management, Kukian mentioned. This optimisation is crucial in a competitive radio industry to maximise financial returns and ensure sustained growth.
“Certainly, several potential growth areas could prove beneficial for the business and the industry. Challenges such as decrease in government spending, are chances for us to improve,” added Nihalani.
For Radio CIty, the upcoming year looks promising since they are embarking on the digital journey. They believe the combination of Radio+Digital will reap huge benefits.
Similarly, RBNL is focussed on bringing customised solutions integrating radio and digital to the table which will enhance their ability to meet consumer and advertiser needs efficiently. This will also provide measurable results and optimise campaigns for maximum ROI.
Radio companies are likely to emerge as holistic media solution providers rather than just broadcasters, Narayanan said. “Moving forward, we are not just playing music but we are curating boutique experiences. We are becoming a 360-degree rollercoaster of offerings with marketing, and advertising solutions. We are also focusing on expanding our business verticals, especially to MSMEs in the medium and small cities.”
Mirchi looks forward to 2024, with cautious optimism. While the recent festival season provided a positive boost, they recognise the need to continuously innovate.
Nihalani concluded, “As for our growth plans, we are focusing on enhancing market share and yield from our radio business. Simultaneously, work towards enhancing our solutions portfolio.”