Cost reduction in mind, it will trim station sizes to experiment with content syndication across network on hub-and-spoke model; denies local content would suffer
Just ahead of the much awaited third round of bidding for FM radio licences, BIG FM, the pan-India radio station owned by Anil Ambani’s Reliance Group is squaring up for a series of rationalisation measures to drive efficiencies.
Among the top three FM radio operators, with 45 licences, it has planned to trim some of the stations in smaller cities. It is also expected to cut costs on personnel. The Indian radio industry is worth nearly Rs 900 crore in terms of advertising and around 20 major entities with around 300 licences in various cities operate in this highly competitive market. BIG FM reaches around 1,200 towns, 52,000 villages and has a weekly reach of 40 million audience across India. It has around 30 per cent market share, according to industry-accepted independent research reports.
Rabe T Iyer, business head of 92.7 BIG FM, responding to queries from Business Standard, said they were adopting a hub and spoke model to drive in cost efficiencies. “We are building creative knowledge centres of excellence in each region, which will be responsible to tailor content that meets local entertainment/infotainment needs. We will continue to deliver entertainment through the hub and spoke model for the radio business, where we can syndicate content from one station to several stations. While enhancing the product through the right balance between universal and local content, it will bring some cost savings. This is a tried and tested operating method that has been in practice the world over, as there is connect to a larger world without diluting the local flavor and needs,” he said.
However, sector analysts and players have doubts. “One of the biggest selling points for a FM radio station is the connect to the local citizen in a city. While seven to 80 per cent is dependent on the music, the rest is the connect which the local RJ brings to the air. It is a crucial element which is interspersed with the music ,” an industry player, requesting anonymity, told Business Standard.
Countered Iyer: “We will only be increasing the ratio of syndicated content to local content. Syndication will leverage the specialisation and excellence brought in by the knowledge centres and will contribute towards a far more enriched product. We will also be investing in training, to further exemplify the output, allowing for better quality of content, while ensuring the local flavor is maintained. Some of our central themes have consistently won several awards, like the notable Actor Calling Actor humour snippet that is refreshed every week centrally across all Hindi-speaking markets. It is a good example of content emanating out of the hubs.”
The company added there would be no reduction in the number of stations and it would continue to run a robust 45-station network, with all employees accommodated in other businesses within the company, with no more than the usual churn on account of year-end attrition.