Govt policies anti-small radio stations: Goyal

04 May,2012

Tarun Goyal is the Founder, Director of Radio Chaska, a radio station which was founded in 2006 by the Goyal family. In conversation with MxMIndia’s Robin Thomas, Mr Goyal speaks about the challenges facing the station in achieving break even, the issues that need to be resolved before the phase III rollout, on their plans to revamp their official website and whether the radio industry has been hit by slowdown?

 

Founded in 2006, when you look back, how would you say the journey has been for Radio Chaska?

The journey since 2006 has been a different one. We started a radio station in Gwalior, thinking that FM radio will catch the fancies of the people, and it did. Over the years there has also been a shift in the advertiser perspective about the medium. However it is the support from the government that we are lacking today, they are spending very less on radio. On a positive note, despite odd challenges, radio has managed to grow tremendously over the last many years, and has also contributed to the development of the city as well.

 

What is the Gwalior market like for radio?

Well, it certainly is very different from the metros. People invGwaliorvhave an altogether different taste for radio itself.  The advertising category on radio is mostly retail. We mainly play music all the time – mostly latest Hindi or Bollywood hits.

 

Apart from advertising, what are the other sources of revenue generation for Radio Chaska?

We do generate some revenues from activations, a good pie of our revenues also come from Radio Mirchi (ENIL), with whom we are instant partners for sales and then we rely on our local revenues. Although activations help increase our revenues, the profits generated are low, mainly because of the high costs in activation. Thereby, we primarily have to concentrate more on advertisements because that’s where a good portion of our revenues comes from. Nonetheless, more number of activation definitely helps us increase our brand value in the city, which in turn, helps us get more local advertisers.

 

So, has the strategic sales alliance model worked? How does it benefit both Radio Chaska and Radio Mirchi?

Since we are a single station owner in Gwalior, this partnership has been a strategic move for both Radio Chaska and Radio Mirchi. Since Radio Mirchi is present across Chhattisgarh and Madhya Pradesh except inGwaliorand Radio Chaska is present in Gwalior, therefore Radio Mirchi (ENIL), in strategic sales alliance with Radio Chaska, has created a space for itself in Gwalior as well. It is quite hard to sell a single station and keep track of various campaigns coming from different parts of the country. This strategic alliance with ENIL gives Radio Chaska an edge in reaching out to other parts of the country and the state. Thus we have had an extremely good partnership with ENIL ever since the inception of Radio Chaska.

 

What are your break-even plans? When do you see Radio Chaska achieve break-even?

I don’t know when we would be achieving break-even as the costs are escalating and hence we are unable to increase the revenues as anticipated. Unless we have some good policies from the government, small stations will never achieve break-even. Government policies, I believe have gone against the small radio broadcasters and, besides, there are other small issues which if resolved would help small stations achieve break-even.

 

Music royalty is one of the issues that are yet to be resolved. The escalating fuel cost is another worry because it is adversely affecting the industry. A company’s five to seven per cent cost is always burnt in fuel because the government is unable to provide electricity. These may be small issues but nevertheless they are vital in helping the business sustain in the market.

 

The MIB (Ministry of Information and Broadcasting) has already given its nod to news on private radio stations, multiple licenses are allowed, FDI limit has been marginally increased. How does Radio Chaska view these developments? Will these benefit smaller stations?

We welcome this move, but issues like music royalty need to be sorted out first and only then I believe FM radio stations can probably flourish in the long run. Right now challenges for smaller stations, in particular, are many and only time will tell how FM phase III will benefit the industry. Nonetheless we welcome the policy and we too would try and be part of the phase III policy.

 

So, will you approach phase III more cautiously? Will you expand to other markets? What are your phase III plans?

We are eyeing for expansion in parts of Madhya Pradesh as well as in other markets, but yes, our approach will be a little cautious. We will not hype up the prices and bid unnecessarily. If we find the scenario viable only then we will bid, otherwise we will stay away.

 

How significant a role does the website play for a radio station? Do you plan to add new features or redesign your website someday?

Yes, we will be upgrading our website very soon, probably in next two months. Official websites have also become a medium for radio stations to interact with their listeners. Our RJs regularly interact with listeners on social networking sites and today official websites have also become an integral part of a radio station.

 

It is said that the radio industry being hit by the economic slowdown. Do you agree?

Yes, I do agree that the radio industry too has been hit by the economic slowdown. The telecom industry, for instance, was one of the highest spenders on radio and in the last three or four months we have not received any business from the telecom sector. So, yes there is a slowdown and radio has been affected by it, but nevertheless radio is surviving the slowdown.

 

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