94.3 MY FM, the radio arm of Dainik Bhaskar Group, clocked revenues over Rs 100 crore for FY 2015-16. Harrish Bhatia, CEO, MY FM talks to Simran Sabherwal about the brand’s operational strategy and why media planners should understand that radio is a price game
In 2006, Dainik Bhaskar Group’s radio arm 94.3 MY FM launched its first radio station in the Pink City. A decade down the line as the Jaipur station completed 10 years, there was even more reason to cheer as MY FM recorded a top-line revenue of `107.5 crore in FY 2015-16.
Entering the 100 Crore Club
On MY FM reporting top line revenues of over 100 crores, and quarter growth of 11% in advertising revenues, Bhatia says the company has a “very strong strategy” both on the product and brand side. On the product side, a “strategy of customer centricity,” which kept customers at the center of all activities was adopted. The content is constantly upgraded based on audience feedback and sample testing plays a big role, with audiences sampling content before and after it goes on air and changes incorporated as per the listener’s suggestions. MY FM also has a centralized content team in Noida that builds content across time-bands. Local flavor is added to this content by the individual stations. On the brand side, efforts were made to reach out, engage and educate advertisers on how Radio can be an effective medium for the brand. Innovative customized solutions are offered to brands depending on the challenges faced by their business and MY FM has executed work for Samsung, FIAT and LIC amongst others. “The whole idea is to create a brand which is different from rest of the players in the market,” says Bhatia.
Looking back at the last decade, Harrish Bhatia, CEO, MY FM says while the business had its share of ups and downs, the focus from day one was to be efficient at all times. “In Radio which is shoe-string business, you can’t have great success unless you are efficient.” For starters, the company re-analyzed its strategies and decided to cut the flab by reducing its people count by about 200 people in 2007, much before the economic recession of 2008-09. Functions that could be out-sourced, were out-sourced. The goal - to break even in three years, “It was the fastest break even in India. To do this, we built a differentiated product.” This strategy helped MY FM break even in three years’ time and then turn PAT positive in four and a half years.
The UnMetro Strategy
After Jaipur, the radio operator expanded across seven states and added 16 more stations. Not surprisingly, the radio operator’s strategy was to follow the footprints of its parent company and focus on Tier II and Tier III markets. This strategy helped MY FM leverage the local understanding it had of these markets. What initially appeared to be challenges, in Tier II and Tier III cities, turned into opportunities once MY FM interacted with local retailers who were keen to create a brand for themselves and faced challenges as any other brand. In this scenario, the mandate was to help advertisers understand the value of Radio. He says, “We were very clear that we will make advertisers understand that Radio is value for money. It is not cheap and neither is it expensive but it gives great value for the money invested in it. We showed them the ROI and helped them understand how to use it better.”
The focus on “Bharat” and not “India which is metros,” has helped growth as Bhatia says that Bharat has the markets which are growing. Bhatia says, “In India, growth is coming in from Tier II and Tier III markets. The GDP of these states - Gujarat, Chhattisgarh, Rajasthan, Madhya Pradesh –is much higher than the national average. These markets are growing and we were there at the right time and right place.”
Understanding The Power of Radio
Another challenge in the early years was getting advertisers on board who weren’t necessarily inclined to use Radio and didn’t understand the power of the medium. For Bhatia, the blunder that many brands and planners in India commit is that they look at Radio as a corporate medium and not as a retail medium as is the norm worldwide. However, post the 2008 meltdown, many brands started understanding the importance of the medium and how it can deliver better ROI for their brand. Says Bhatia, “Brands who are category leaders - such as Maruti Suzuki, Flipkart and HUL - are using Radio and slowly others are following them.” He adds that education, health, e-commerce and automobile categories have taken to Radio in a big way and currently the ratio of retail to national advertisers for MY FM is 65:35.
If you don’t increase the price, then how do you grow?
MY FM hiked it rates by 25% in February this year, to address the inventory crunch. Bhatia says the price increase was also because there has not been any price correction for the last two to three years and most advertisers have accepted the price increase. He states, “If you don’t increase the price, how do you grow? That question is something media planners should understand as it is a price game only. If I don’t increase the price, I won’t grow and if I won’t grow, how do I give you a product.” Looking ahead, Bhatia is optimistic and says “I am keeping my fingers crossed as we may increase our rates again mid-year.”
Covering The State
In the recently concluded auctions, MY FM won 14 frequencies but decided to surrender the frequency it won for Patna. This was because MY FM did not win more frequencies in the State of Bihar. Says Bhatia, “Whenever we take a State, we make sure that we cover the entire State or we don’t take it.” Talking of the other 13 frequencies, Bhatia says the stations will be up and running in about four to five months and Bhatia anticipates that the new stations will breakeven in less than three years. A State which MY FM is betting big on is Maharashtra where it has acquired nine frequencies and in addition to the one station already in operation, the tally in the State will go up to 10 once all stations are operational. MY FM also strengthened its presence in Chandigarh, Punjab, Haryana, Rajasthan, Madhya Pradesh and Chhattisgarh. States Bhatia, “The game plan is very clear that as a brand we need to strengthen the places that we are already present in and expand our footprint to places where our parents are present but we are not.” Going Beyond Radio A big focus at MY FM is to go beyond Radio and look at non-FCT (Free commercial time) business which contributed to about 10% of revenues last year. The radio operator extended its presence on-ground with The Jiyo Dil Se awards were initiated, to connect with people and make people understand what the brand stands for, by highlighting the unsung heroes in the society. MY FM recently also took the reality route with an on-ground contest ‘Paiso Ka Ped’ where anybody who held on to the money tree, installed in a mall, for the longest time would be rewarded. Says Bhatia, “We ran the on-ground initiatives to make people aware of the brand. Radio is a very passive medium, people listen to it but we wanted to create a buzz around the brand, the product, and the category.”
On a final note Bhatia adds that being a Radio player, while it is imperative to provide solutions and help brands grow their business, the listener experience should not be compromised in any circumstances. He says, “It is because of listeners that we get the advertisers not vice-versa. If you compromise on the product experience, you will get advertisers for some time but that is not going to last long. We are very clear that the product experience cannot be compromised. Customer is the king for us.”