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Last Updated : May 06, 2020 07:31 PM IST | Source: Moneycontrol.com

Coronavirus impact: More people listen to it now, but radio is still struggling

Radio, which was already under pressure due to slowdown in the economy, is under more stress now because of coronavirus

Representative Image
Representative Image

Radio is one of the very few mediums that is currently offering you new and fresh content. That has helped increase the listenership for radio by three million to 51 million listens a day post-lockdown, according to a study by AZ research.

Yet, radio is struggling.

Radio, which was already under pressure due to slowdown in the economy, is more under stress now because of coronavirus.

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“One was slowdown pressure. Plus, the government was not spending using the medium. The Association of Radio Operators for India (AROI) has been urging the government to start utilizing the medium better," Nisha Narayanan, COO and Director, Red FM and Magic FM told Moneycontrol.

"There are payments that are pending for a long time. Radio is another medium that relies on advertising. Due to corona, marketing budgets have been slashed and when that happens, there is an impact on ad revenue,” she added.

Central government ads continue to remain absent for radio. The only respite currently is state government ads and even those  are coming in small volumes and are related to coronavirus.

“Advertising is all-time low. While our product is getting consumed more, the brands are unable to sell their products because supply chain has been impacted due to lockdown. So, they don’t see the requirement to advertise. Hence, revenue has taken a big impact. Approximately, 30 percent of advertising on radio is gone,” said Apurva Purohit, Director, Music Broadcast Ltd.

In fact, AROI is seeking a bailout package from the government. In a letter to Union Minister of Information and Broadcasting, Prakash Javadekar, AROI president Anurradha Prasad said due to the financial crisis, many radio stations are cutting costs and laying off employees. She added that the radio industry employees over 20,000 persons and many broadcasters are finding it difficult to sustain the workforce.

While Purohit said they are not letting people go, they have definitely tightened their variable costs like travel and marketing expenses. Plus, any increase in employees is unlikely.

“Our liquidity position is good. We have Rs 200 crore of cash lying with us with zero debt. This is what is helping us not take any harsh decisions of laying off,” she added.

News- a game changer for radio

According to Narayanan, the game changer for the industry will be considering news for radio.

She said that radio reaches grassroot level and it gives local people local news.

Adding to this, Purohit said, “People are looking at radio as a source of information and it is not being just used for entertainment. While radio is not allowed to carry news, people still consider it as a credible source of information. This is because of two things. One is the radio jockeys who have been on a particular slot for a longtime. Hence, they have formed a one-on-one equation with people. Second reason is they tell what is happening locally.”

A silver lining 

While ad revenues are drying up, there are categories that are preferring radio to advertise.

“The pharma industry, online delivery company those who have started business, BFSI are advertising on radio. Now even FMCG brands have also started. I wouldn’t have said this two weeks ago but today a lot of liquor, FMCG and local brands have started asking for ideas. The change is that advertising is not only through FCT (Free Commercial Time) but through collaborating with content,” said Narayanan.

Both Narayanan and Purohit are betting on local advertising.

“Internationally local advertising is 60 percent to 70 percent and 30 percent is from national. In India, historically it was opposite as 70 percent came from national advertising which has now come down to 45 percent and 55 comes from local players and this will only increase,” said Purohit.
First Published on May 6, 2020 07:31 pm
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