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Help FM radio-III will unleash the true potential of radio
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Having set its eyes on adding at least 110-120 station in the upcoming third-phase of FM radio expansion, Reliance Broadcast Network (RBNL), the radio, broadcast and outdoor firm of the Reliance Anil Dhirubhai Ambani group, is now sitting on around Rs 300 crore raised from the market and foreign investors. The money will be spent on radio expansion and television foray. Pune, Lucknow, Coimbatore, Gulbarga among others are on its radar. RBNL's chief executive Tarun Katial gives FE’s Ashish Sinha an overview of the radio business and plans ahead.

How has your radio business performed in the last six months?

The radio business has seen 14% growth in revenues during the first six months compared to the same period last year. If one were to take out the effect of political advertising in the last year, the real growth in revenues is in fact much higher. Prime time saw inventory fills upto 110% while for the rest of the day it stood at 90% in key metros.

How has radio contributed to your overall business?

We have seen healthy growth across all our verticals. For the April to September period, radio contributed 72% while the experiential marketing's share stood at around 16%. Our out of home business cornered 8%. Radio will continue to be a major contributor for some time, given the future potential that the industry offers. Radio operations posted Ebitda of Rs 5.80 crore in Q2 registering 156% increase in Ebitda compared to Q1 FY10-11, despite it being a traditionally lean quarter for advertising. Radio inventory utilisation stood at an impressive 64%.

What is the opportunity in radio that you see over the next few years?

We have seen healthy growth in tier-II markets across regions specifically in north and west. Both revenue and inventory utilisation have grown and we expect the trend to continue. Phase III offers us immense opportunity for geographical expansion and strengthen our reach in major markets. For radio to become preferred choice of medium for advertiser, pan-India coverage with depth in tier-II and tier-III is a must. Phase III will in effect unleash the true potential of radio.

Would you actually see takers for the B, C, D towns? How have they contributed to the business so far?

We see good potential in the tier-II and III cities in terms of local advertising. Of the 14% growth in radio revenues (in the first 6 months FY10-11), 61% has come from non-metro cities. Non-metro cities, have also witnessed a 48% growth in inventory utilisation. The contribution of tier-II & III stations to the total radio revenue has moved from 30% to 37% year-on-year.

You raised Rs 283 crore from the market via preferential share issue. How have you utilised this money?

We have used the money to retire debts presently as the announcement for Phase III has been delayed. This capital infusion leverages the companies borrowing capability for future expansion requirements.

Source: The Financial Express

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