How music streaming apps posing threat to radio brands
The humble old FM radio may not be out of fashion yet. It still possesses the advantage of offering a complete package of music and non-music content with a significant amount of loyalty attributed to the brand personas/RJs. However, there’s the persistent threat of modern-day music streaming players ramping up their offerings beyond music, by incorporating talk shows and podcasts. With a significant overlap in target group as well as a huge reach thanks to cheap data prices, are music streaming apps eating into the market share of radio?
“As audio OTT proliferates, there will be an impact on radio. FM radio still has limited penetration,” says Jehil Thakkar, partner, Deloitte. “Part 1 of phase 3 radio licensing didn’t cover all the small towns and cities. The coverage in those areas will come from audio OTT apps, thanks to declining data prices.”
In fact, Prashan Agarwal, CEO, Gaana, says a lot of content similar to radio is finding place in music streaming, too. “There is a decent overlap between radio and music streaming apps. Consumers are switching between different mediums from video to audio to radio,” he adds.
This could explain the increasing trend of radio players going beyond traditional radio programming and having offerings like digital channels and videos.
For example, Radio City has 52 web radio stations across 11 languages. It also offers music and non-music content via the Radio City App. “ When compared to an online streaming app, we are similar, yet so different. As part of our digital strategy, we offer select terrestrial shows, along with exclusive digital content,” shares Rachna Kanwar, COO, digital media, Jagran Prakashan, adding, “For example, one of our online properties, Radio City Joke Studio, became a national show across all Hindi speaking markets.”
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While audio OTT players have only just begun offering non-music content, for radio players it has been a key source of consumer engagement. For Radio Mirchi, it is all about content whether it is for radio, social media or investing in original shows. “Music streaming is a very small part of a digital user’s usage. Digital users are mostly into videos and social media,” says Prashant Panday, MD and CEO, Radio Mirchi.
Radio Mirchi’s offering beyond radio include a proactive play in social media, as well as digital videos including original content. For example, its original series Jalsa Party with Dhvanit has pulled in more than 2.5 million views organically.
Media plans also reflect the changing digital landscape in radio. The local flavour of radio that advertisers were so used to, is being replaced. Global brands can now take advantage of radio channels available on platforms like Soundcloud, Spotify, Saavn, and others. In fact, every media brand has transcended from traditional air time selling to a more integrated solution-oriented approach. In fact, new business offerings like concerts, activations, digital communities and music streaming can collectively constitute upto 20% of overall revenues of FM radio players, says Ashish Pherwani, partner and M&E leader, EY India.
Another player, RED FM, has also diversified in event IPs, activations, mall radio and digital. “The radio space has become competitive considering the rate at which digital ad spend is growing. With airtime inventory being fixed and limited, RED FM is developing new revenue streams,” says Nisha Narayanan, COO, RED FM.
Clearly digital is changing the content and format of radio channels and thus revenue opportunities. “New revenue streams for radio include subscription models and app-based services,” says Nishad Ramachandran, chief digital officer, Hansa Cequity.
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