Highs and lows: More listeners tune in to radio but advertisers switch off

Calling the recovery, “tentative”, Entertainment Network India CEO, Prashant Panday points out that “even in August industry revenues were down between 30-50% y-o-y.”

Advertising on radio channels hit rock bottom in the three months to June with revenues falling 80-87%, year-on-year. An estimate by Pitch Madison pegged the industry’s earnings at about `71 crore in the quarter. Calling the recovery, “tentative”, Entertainment Network India CEO, Prashant Panday points out that “even in August industry revenues were down between 30-50% y-o-y.”

While radio did experience a surge in listenership during the intense lockdown months — up nearly 30% according to an industry body — monetising this has been a challenge.

Even before the pandemic, the industry was in trouble with revenues down 7.5% in 2019 to Rs 3,110 crore, according to EY. While they were expected to rise to Rs 3,280 crore in 2020, that seems unlikely now; experts expect a contraction of 30-40%.

“Radio is not seeing the same recovery rates as mediums like television or print,” says Chandra Dobhal, Executive VP, Amplifi India. Owing to local restrictions such as containment zones or partial lockdowns, advertisers are cautious about using radio.

Television advertising revenues fell 79% y-o-y in Q1FY21 to Rs 3,423 crore while revenues for print fell 61% YoY to Rs 1,217 crore.

Ashit Kukian, CEO, Radio City says radio, which functions at the local level as a reminder medium for brands, has seen a better recovery in tier-1 and tier-2 cities where Covid-19 is not very widespread than in metros. “In tier-1 and 2 cities, there is a 70-75% recovery,” Kukian notes.

The number of categories making use of radio continues to be lower than pre-covid levels. “During January-March 2020, approximately 260 categories advertised on radio. This dropped to about 150 during April-June,” says Navin Kathuria, EVP and principal partner, OMD Mudramax.

In July and August, when lockdown relaxations started kicking in, the number of categories advertising on radio has gone up to 200, he adds.

This is one of the reasons radio operators are increasing their digital content and collaborations . “Advertisers are not interested in buying FCT (free commercial time). They want solutions that help them move products, get customers into their stores, generate trials, etc. Therefore, this switch from plain FCT to solutions will accelerate because of the pandemic,” says Panday.

Radio City, meanwhile, worked on several campaigns that leveraged the digital reach of the platform during the pandemic to complement its on-air campaigns. Operators have been working on expanding their reach by leveraging digital channels. For instance, Radio City entered into a three year deal to share hundreds of hours of content and audio IPs with Spotify in May, 2020. Others like Radio Mirchi and Red FM syndicate content on audio streaming apps.

A majority of radio advertising revenue comes from categories like real estate, retail, education, jewellery and events. The spends from these categories are barely lukewarm as of September. Kukian says the automotive category has been surprisingly active and FMCG, too, is advertising now. “The category that began advertising as early as in April and continues to do so is the BFSI category which has been promoting insurance and investment products”, he added.

FM radio channel Radio Mirchi earned revenue of `37 crore during the quarter ended June , a 72% drop over Q1 FY20. Radio City earned Rs 14 crore in the April-June quarter, close to 80% less than its earnings in Q1 FY20.