Q&A: Tarun Katial, CEO, RBNL

'Radio has been undervalued'

Anil Ambani led-Reliance Broadcast Network Ltd (RBNL), which operates in radio, TV, experimental marketing, out-of-home and digital business, has reported that its radio business has achieved break-even. Tarun Katial, CEO, Reliance Broadcast Network Ltd (RBNL), spoke to Priyanka Joshi about his company’s future plans

RBNL’s radio business has shown an uptick. What did you do right here?
The radio operations have turned EBITDA positive – an increase in revenues of 25 per cent over last year. We have also seen 42 per cent growth in radio inventory utilisation, which only highlights the effectiveness of the medium among marketers and advertisers. What is excellent is that we have seen a 23 per cent growth in our radio sales from the tier II markets. With phase III on the anvil, it will allow for radio to grow exponentially, unleashing its true potential.

The revenue mix this time is 69 per cent for radio business, followed by experiential marketing at 18 per cent, OOH at 9 per cent, while others comprise only 4 per cent share. Going forward, we see radio reducing to 50 per cent and experiential marketing, OOH and Television will see higher contribution to the mix.

As radio marches on, can you share what will be its go-to-market strategy in 2011?
The radio business is stable and the opportunity to grow the business lies in innovation in content as well as product offerings. One of the key focus areas is offering integrated multi-media properties to clients as well as creating our own IPs which will become a key part of the radio operating plan.

Radio as a category has been undervalued by the market. A recent RAM baseline study shows a 50 per cent jump in listenership across the four metros. This means that advertisers are increasingly seeing the value and radio should get the price it deserves – given its high reach and high engagement.

As you fine-tune the TV strategy, what areas do you think need attention?
Distribution cost is a potential area where we have to be careful. It is essential to have a distinct product strategy, followed by distribution strategy for each of the channels that we launch, to avoid spiralling distribution costs.

Currently, TV business is not capital intensive since we have a joint venture with CBS Studios International and we have easier access to world class entertainment at the best rates.

On an average, television businesses take anywhere between three to five years to break even, and we should be closer to the former number than the latter. We will use funds prudently among phase III of radio, select long term OOH inventory and the television business.