Alternative Sources of Revenue on Radio
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Transcript of Alternative Sources of Revenue on Radio
ALTERNATIVE SOURCES OF REVENUE ON RADIO
@RADIO CITY 91.1 FM
BANGALORE
PUNE
BY: ABHIJEET PRASAD SUMMER TRAINEEBANGALORE
SYNOPSIS OBJECTIVE
TO UNDERSTAND RADIO AS MEDIUM OF COMMUNICATION.
TO ASSESS AND UNDERSTAND THE NEEDS OF CLIENT OF RADIO.
TO EXPLORE AVENUES FOR ALTERNATIVE REVENUE ON RADIO AND ITS GROWTH
RADIO INDUSTRY
EMERGENCE OF FM RADIO.
CURRENT SCENARIO OF RADIO INDUSTRY
FUTURE GROWHT OPPORTUNITIES AND EVALUATING THEM
4
• Business model is mainly advertising driven• Impacted by the global recession, growth in the last two quarters of 2008 was slow because
of slowdown in the advertising industry• A cost effective medium for advertisers as it has more penetration and reach compared to the
traditional print and television• Controlled by few business groups having sizable stake in different media properties• Mainly an act of diversification from existing media players as an risk mitigation exercise with
slowdown experienced in traditional media outlets such as print.
Radio Industry
• Regulated and recently privatized• Phase II licensing made the business viable• Has huge infrastructure setup costs• Oligopoly and witnesses price wars• Overall growth rate is impressive
FEATURES OF RADIO INDUSTRY
• Highly fragmented and regulated• Top 5 players part of large media groups control 63%
radio stations• Top 5 players earn 40% of total revenue• More than 240 private radio stations• Slowdown in promoter’s primary business activity
has resulted in diversification in radio business• 2004-2008 CAGR ~9% (realized)
Key indicators
• Consolidation in the industry• News and current affairs broadcast for content
differentiation• Phase III licensing to ease industry expansion• New stations to result in more fragmentation• Advertising revenue generation from national to local
base• 2009-2013 CAGR ~15.4% (projected)
Future drivers
*CII-KPMG (2005) Indian entertainment industry, Focus 2010: Dreams to Reality.**KPMG (2009) "In the interval... But ready for the next act." FICCI-KPMG Media & Entertainment Industry Report.`
CHARACTERISTICS OF FM RADIO INDUSTRY IN INDIA
04/08/2023 6
• 18% of all private FM stations in metro markets• Metro markets contribute maximum revenue to the
industry• No room for expansion in metro markets – metro
markets already have maximum number of permitted stations in operation.
• Witness fierce competition
The metro market phenomenon
• Radio globally is optimized for local advertisers but Indian Radio industry vies for advertisers with national presence. The mix currently is in favor of National advertisers.
• Advertisers who provide big business are largely based out of metro markets.
• Advertisers give maximum business to market leaders who have large presence, egg. Radio Mirchi, Big FM.Radio city
• Radio commands 4% of total advertising revenue.• Industry expert opine that small players distort
market by virtue of their inability to support large advertisers.
Advertiser driven
Size of Indian Advertising Industry – INR 221 bn (2008)
CURRENT SCENARIO OF RADIO INDUSTRY
CURRENT SCENARIOKEY DEVELOPMENTS
MERGER AND ACQUISATIONS
Bennett Coleman & Company acquires Virgin Radio UK for Rs.448 Crores.
Radio Netherland inks deal with Radio Chaska for music contents.
INDIAN STATION GOES INTERNATIONAL
Reliance Anil Dirubhai launches a 24 *7 FM Station Internationally.
Annual marketing budget spent on Radio as an Advertising Media
% of the total budget spent on radio advertising No. %
0-10 36 60
11-20 16 27
20-30 8 13
Total 60 100
DATA ANALYSIS
SAMPLE SIZE: 60 SAMPLE: Corporate and Retail Clients
Ranking of various advertising medium according to the preference of the sample
Advertising Media No. of sample %
Television 12 20
Print 27 45
Radio 2 3.34
Outdoor 16 26.67
Internet 3 5
Total 60 100
12
272
163
TelevisionPrintRadioOutdoorInternet
Success ratio of advertising campaigns on radio
Response No. of samples Percentage
Yes 40 66No 10 17
Can't say 10 17
Total 60 100
Objective of advertising in Radio
Objective of Advertising Campaigns done on Radio No. of sample Percentage
Brand Recall 30 50
Promtion of new schemes and offers 20 33
Launch of new Store or Product 10 17
Total 60 100
Preference of Radio Station
FM channels No. of samples Percentage
Radio City 10 17
Radio Mirchi 18 30
Radio One 20 33
Big Fm 6 10
Fever 2 3
Radio Indigo 4 7
Total 60 100
Preference of Radio Station
Innovative programme preferred by clients
Objective of Advertising Campaigns done on Radio No. of sample Percentage
LIVE CHAT SHOW FOR LISTENERS 15 40
LIVE BIDDING SHOW 2 3.33
REALTY SHOW OR TALENT HUNT SHOW 15 40
ON THE MOVE SHOW 28 46.66
TOTAL 60 100
Key findings:Out of the sixty clients survey only a small percentage i.e 3.33 % consider radio as primary or number one medium for communication.
The total percentage of Advertising budget allocated to radio is very small compare to other medias vis- a- vis and even the that also is comparatively less compared to international industry standards.
The clients are not happy Radio stations converting them to 100% Kannada, as they consider Radio as a cosmopolitan medium and their TG is a mixture of people living in Bangalore and Karnataka which is supposed to be a cosmopolitan region.
Clients are unable to measure the reach the Radio is fetching them, compare to other forms of media like print or television.
Radio stations should be making more interactive and customer oriented programs and should be judicious in playing what type of music should be played when. A special attention should be given to this feature as music is the connecting link between listeners and station and its success depends on the music specially.
Clients want stations to constantly innovate the programme so that there is no repetition & listener interest is not lost over the period of time.
KEY RECOMMENDATIONS :Radio should reposition itself as a medium of Communication by promoting itself robustly as primary media of communication.
Radio should work out special Packages for its regular clients, in terms of value addition provided to them.
Radio should develop some sort of yardstick which should help Clients to measure the reach of a campaign on Radio. Radio as an industry should work on it and develop a solution for it. For example any customer coming through the channel of radio station
Radio should focus n all those sectors which are still not approached by radio and are focused on other media,
As it is one of the cost effective medium and mass media, it should also play an important role in the society as any other media, it will improve the point of view of companies and listeners towards medium.
Radio is considered a part of cosmopolitan life, so the programming should be catering to their needs and not specific language people. It should rework
on its programming in a way that satisfies every one As because it may fetch you the listener ship but they won’t fetch advertisers because of demographics.
AVENUES OF ALTERNATE REVENUE Alternative Revenue is non-traditional, significant and sustainable revenue streams for business, via the creation of commercially sponsored networks.
In the Radio industry which is still at a development stage, and where there advertisement is the main source of revenue with stiff competition between players to increase their market share it’s important to look for an alternative way for revenue generation to stay ahead in the competitive industry
In Radio Industry, one of the alternative way of revenue generation is doing the BTL (below the line) activities. This stream of revenue generation is non –traditional and innovative. The idea is to find similar non traditional source of revenue generation.
TWO PATHS FOR ALTERNATIVE REVENUE GENERATION: DIVERSIFICATION OF BUSINESS
INNOVATING THE PRESENT FORMAT
DIVERSIFICATIN OF BUSINESS :
ONLINE RADIO - INTERNET RADIO
COMMUNITY RADIO
INDIA’S FIRST INTERNATIONAL STATION
SUGGESTED IDEAS FOR FORMAT CHANGE : LIVE CHAT SHOWS
LIVE BIDDING SHOWS
REALTY SHOW OR TALENT HUNT SHOWS
i. Voice of Radio or Band of Radio
ii. Star on Radio
iii. RJ in you
ON THE MOVE SHOW
PROMOTING EXHIBITION SHOW FOR DIFFERNET INDUSTRY
PROVIDING ONLINE CONTENT TO CLUB MEMBERS
ESTABLISHING A NETWORK OF STATION INTERNATIONALLY
FOCUSSING ON GROWING SECTORS
INTERNET & WEBSITES FULLL UTILISATION
CONCLUSION
Thank you