India’s Next Radio owned 94.3 Radio One has become the most liked radio station on Facebook in radio markets of Delhi, Mumbai and Bangalore.

Its MD and CEO, Vineet Singh Hukmani, talks about what it takes to become the ‘audience engagement leader’ in the upscale radio space and how well this has served his business and attracted new investment.

1. Is Radio primarily a reach medium or an engagement medium ?

Radio is actually the first social media as it is live and allows two-way interaction all day long. It allows for local community building.  The larger networks have used radio to reach all audiences in a carpet bombing fashion and don’t really target any particular type of listener. However we at Radio One target upscale educated audiences only and this has allowed us to create super engagement with about 13 million upscale listeners in seven cities.

2. How does Radio One create an environment for better engagement?

All other stations’ primary content is about movies and music, Bollywood star talk and perhaps some local city content to stir the masses. It is all really aimed at the large lowest common denominator audience content and it aims to connect a rickshawallah to a CEO with the same soundbyte or song.  However in our case since the audience is well educated and upscale, we focus on content that matters to our audience, like content on money/finances, sports and fitness, food, travel, entertainment, real estate, automobiles, books and theatre, new global trends etc in a way that it mirrors their lives. We have an over 70% carefully engineered ‘interactivity score’ across our day part meaning we have more two- way live conversations with listeners than any other radio station.

3. Are listenership studies geared to measure listener engagement?

The current listenership studies are archaic and outdated. In this age of digitally connected, engaged, live audiences, they use clumsy ‘diary recall’ methods which were invented in the late 1960s that attempt to provide ‘historic reach data’.  The sample sizes are as small as under 1000 listeners to measure an audience universe which is over 130 million people tuned at any time to FM radio in India. Even TRAI has pulled up these so called ‘rogue’ listenership studies because of their lack of ‘efficiency’, investment and of course laughable ‘statistical significance’. These jaded measurement methods are not audited and therefore not credible. Most radio stations have stopped subscribing to them.  Only digital methodology can truly serve an all day live medium like radio. No other medium is live like radio other than social media. New, digital age clients and agencies want better ROI and social media is a fabulous and reliable currency as it reflects a real and live audience at any given point!

4. How does Radio One use social media as a listener engagement currency?

The reason we succeed in this is because 95 percent of our upscale listeners are also always online on social media. The penetration of ‘online listeners’ in the mass radio networks will be under 30 percent due to huge spillover into massy audiences.  Step 1 is we mirror our on air local city content live on social media by adding things that make it enjoyable on social media separately in each of our local city pages. This has made each of our local city pages say in Delhi, Mumbai and Bangalore cross over 300,000 likes each on Facebook which is far above the nearest competitor in each of these cities. We are therefore able to measure ‘engagement’ at any point of time, learn what is working and provide this to our clients. Our product teams now create products where on air and online connect is seamless so social media makes for the perfect listenership measurement currency.  We also have national audience interest pages. For example, the Radio One national Cricket page has over 100,000 fans. Our national Travel page has over 120,000 fans. We have national pages like Superwoman for women audiences, Football, Youth achievers and other national audience passion points. We are able to therefore connect advertisers with audiences both at local city level and national audience interest level with ease. So if a client asks us ‘how is my promotion doing in Mumbai?’ or how is Radio one doing all India on cricket, we are able to provide reports on engagement data very quickly and accurately.  Our sales, innovation, marketing and post evaluation teams are integrated into this kind of modern day ‘listenership currency system’ and that’s how we ‘sell’ differently to our advertisers. In comparison other radio networks only use sub-standard outdated reach data that is ‘historic’ meaning it cannot be delivered live and cannot answer specific questions on engagement created by a particular program, promotion or interest area of the audience.

5. How does this use methodology further fuel innovation in content in radio one?

Since audiences can be monitored at a local level and a national interest level so accurately, we confidently create better targeted content using different time line inventory. For example, we created a whole day of ‘EDM music’ and were able to get highly engaged audiences on air, online on social media and able to monetize the same.  We are the only radio station to be able to run a monetized travel show called ‘Get Some Sun’ all year long with celebrity Ranveer Singh in all our cities where we have also populated a ‘sunchaser’ tribe of 120,000 people on social media. In a year we have created over 40 such on air and online opportunities that grow to the next level both locally and nationally. So much so that 40 percent of our total revenue comes from innovation and exclusive clients who are only on Radio One. This is proof that our game is different and it is working well!

6. What are the challenges and opportunities for Radio One going forward?

Our challenge at a business level is and always has been to maximize our operating profit.  So topline has to grow but in a way that it is not at increased costs. So while we have spent on upgrading team size this year, also invested into knowledge upgradation and content engagement, we do not spend wildly on ‘promotion’ or any areas where we are not sure of the margin of return. Even though annual license fee costs have been increased by the government (which are being challenged in court by all players), we have not gone for new exorbitant license costs so our business does not have any new risks. We continue to grow year on year in double digits where the market grows in single digits and are well geared for a digitally engaged future. Our greatest strength and opportunity will always be our people and we are proud to have the lowest attrition rate of under 4 percent over the last 10 years.

7. How you have been unique in a market characterized by aggression with

respect to money paid to acquire licenses?

We earlier acquired metro licenses in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad and Pune. We have now renewed only these for the next 15 years because these are the markets with the largest revenue base. These are also the largest feeder markets with the highest advertising rates. Smaller markets don’t make sense for us as the return on capital invested into licenses in small markets is risked given that advertising rates in smaller markets are always under pressure of discounting. Also we believed our core competency of catering to upscale educated urban audiences was best served in the seven metro cities we are present in. The markets we are in still have tremendous scope for aggressive growth from a revenue perspective. Aggression in bidding for new licenses at exorbitant/unviable prices as some of our competitors have done may be good for short term top line growth but will not be good for their P&Ls as their break evens and return on capital invested get pushed further down in a 15 year license period. Despite our phase 3 transition expenses and rise in annual license fee costs, we continue to operate at a healthy and growing 25-27 percent EBIDTA margin which is where our focus has been and will always be. We are well poised to reach a 30% + EBIDTA margin by this financial year end provided there are no ‘shocks’ in the economy at large.

8. How do you see the growth story for radio and your business over the next 2-3 years? What are the potential challenges and how will you deal with them?

Growth is linked to how our customers perceive radio now. The critical change in client mindset is improved ROI. Digital campaigns have taught them that ‘the here and now’ is the most critical. This means live monitoring of live mediums like digital are critical to their business growth. It is the only medium that clients invest in for creating ‘behaviour and attitude change’ in their customers. So we see radio growing from that perspective. With new radio players having bid very high license fee, the players are all firming up ad rates by over 20 percent which is also good for us. Our biggest challenge is to stay differentiated and yet relevant in a growing commodity space. We have upgraded our innovation skills both on air and online through investing in more people and training to stay ahead on that front.

9. Is there a way to get a broader base of advertisers?

While radio occupies just around 4 percent of the advertising pie, almost all categories of advertisers are on radio. Also the rate of growth of new advertisers coming on to radio and ‘radio only advertisers’ is growing at an alarming pace. With inventories being full on radio, rate increase is inevitable and it is already happening. The more radio forms a conjunct with digital the more the value in radio will grow. We have realized that for us growing live engagement through radio and social media connect is what will lead to exponential growth. We are staying away from ‘empty generic reach’ as that is a commoditized space.