Growth Drivers

Radio segment revenues grew 12% in 2021 to INR16 billion (51% of 2019 revenues).

Many radio stations have begun to experiment with podcasts, which now have millions of monthly listeners. Comedy, business, news, religion, and storytelling were among the most popular categories.

Radio ad revenues are expected to return to INR21 billion by 2024, which is around 70% of what they were in 2019. Because ad prices are under pressure, the CAGR is expected to be around 8%. Non-FCT revenues are predicted to grow at a cautious 17 percent CAGR, although major radio brands could expand significantly faster.

Radio ad volumes climbed by 29% in 2021 compared to 2020, with non-metros accounting for 47% of the total ad volume.

Non-FCT revenues were primarily driven by events (both online and offline), content generation, branded content, and syndication/curation. Brand extensions have already begun, such as branded channels on music streaming applications and worldwide radio operations.

Issues and Challenges

For the industry to reach its full potential, it must address concerns such as measurement, internet presence, perception, and so on. Given RAM’s restricted coverage and the IRS’s low frequency in recent years, a robust measurement system across cities with populations of one million or more is needed, exhibiting the power of radio through OEM-level or app-level tech connections.

SME ad volumes are still low, and industry conversations suggest that it will take two years for them to recover. As a result, ad rates continued under pressure, and average yield fell by roughly 13% as bonus spots were regularly given.

Differences in music royalty rates prevent FM radio companies from creating and airing their radio channels on internet streaming platforms — an issue that the industry must resolve in order to benefit both broadcasters and music licensors — as curated content with RJ interactions is largely absent online, and migrant populations are unable to enjoy radio stations in their preferred language.

While news is permitted across TV, print and digital, FM radio stations face significant restrictions in airing news.

Radio should be evangelised to advertisers as a traditional medium with some of the most creative content and stories — to re-badge radio as a D2C medium, creating interactive and lean-forward experiences with audiences, building IP that resonates locally and generates social media conversation among like-minded communities.

Several more frequencies can be enabled by converting to digital broadcasting, giving consumers more listening options. To enable this change, the radio industry must collaborate with all stakeholders.

Way Forward

It is expected that radio revenues to continue recovering and, subject to further waves of the pandemic, reach at least INR18 billion in 2022.

Growth will be driven by the recovery of the SME advertiser segment, retail revival, growth in bank credit, re-opening of offices, and focus on non-FCT revenues.

Advertising is expected to grow at a CAGR of around 8% over the next three years, while non-FCT revenues could grow at 17% or more.

Rate recovery will continue to be a challenge, and will happen only once retail advertising volumes increase which will require significant innovation and concept
selling.