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PMMAO 2011 RADIO OUTLOOK : The ‘third’ wind

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The year 2011 is expected to play a new song for the radio industry. As per the Pitch Madison Media Advertising Outlook 2011 projections, the radio industry is expected to clock revenues of Rs 1,018 crore, in the ad-pie worth Rs 27,650 crore. This will be the first time when the medium will cross the Rs 1,000 crore mark. However, the growth rate in 2011 is projected to be around 15 per cent, half the rate it was in 2010. Also, radio’s share in the ad pie is expected to remain the same i.e. 3.7 per cent.

A phase up

Ashit Kukian, COO, Radio City 91.1 FM emphasises on the fact that radio’s relevance will increase in terms of geographical reach with presence in newer markets because of the much awaited Phase-III of licensing, which will add 700 more FM stations to the existing 250 stations.

With the addition of new markets and new frequencies, increased ad spends would flow from existing advertisers as well as from new advertisers. Prashant Panday, CEO, Radio Mirchi, says, “Today, radio does not even compete with local print. For every one radio station, there are several print editions that are available in any market. This gives them the advantage. Today, radio listenership nationally is about 12 crore people. Once radio spreads across the country, this number is expected to shoot up dramatically. That’s when radio’s share of advertising will climb to at least 7-8 per cent.”

 

Pricing it rightly

However, the ride for radio is expected not be all rosy. To increase pricing of ad-spots is one of the biggest hurdles between broadcasters and their profitability. Panday says, “To increase pricing to the 2008 levels and then go higher from there in 2012 is the biggest challenge.”

Also, despite the growth, the power of radio as an advertising medium is still underutilised. In India, the share of radio industry is still close to four per cent of the total advertising pie, as compared to internationally, where it is around 8-12 per cent. So, there is no doubt that only half the potential of radio in India has been exploited.

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Abhinav Mohapatra

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