ADAG has launched its new radio venture Big 92.7 FM. Tarun Katial, COO, Adlabs Radio informs that the radio stations in Chennai, Hyderabad and Delhi will go on air in six weeks. He also says that there are plans to have 45 radio stations across India.
Katial further states that the company plans to enter new markets like Jammu, Srinagar, Aligarh and Bikaner. Katial sees the share of advertising spends on radio increasing from 2 per cent to 4-5 per cent.
Katial believes that there is scope for advertisers to spend 15-20 per cent more on radio advertising. Katial also informs that the company has no plans of selling stake to a foreign partner for now.
Excerpts from CNBC-TV18's exclusive interview with Tarun Katial:
Can you lay out the roadmap for the next 12 months and tell us what you intend to do and which market you plan to hit first?
We have got 45 stations across the country. We first start off with six big metros - Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Bangalore. In the first phase Chennai, Hyderabad and Delhi will go on air, and after that the next three metros.
Then we are seeing some very unique tier II markets where we are the only media players who have actually gone ahead and got licenses for ourselves. I'm talking about markets like Jammu, Srinagar, where there is no other private media available, and also markets like Jhansi, Bikaner, Aligarh.
So this will end up making us probably the number one radio network in the country. In the long run we will be eyeing 45 stations.
I believe you have had some thoughts about how you want to price your advertising spots. Do you have any sense of what kind of revenue streams you are looking at in the next four quarters, atleast from the metros when you kick off?
We firmly believe that radio is currently at the last end of the spectrum on the priority list of advertisers. It's critical that the pie for advertising in radio increases from the current 2-3% to atleast 4-5%.
The reach of radio will go through the roof with 45 stations from ourside, and overall over 300 frequencies coming into the country, across the countryside. Radio is really the only local medium without any spillage. So advertising will be effective, it will be really targeted well. And I think advertisers will be ready to pay a price for it.
So what sort of price do you have in mind?
I think the existing players have priced the market well, but there is scope for advertisers to be spending at least 10-15 per cent more. We will be equitably priced, but we will provide advertisers with not just the 30-seconds spot. It really goes beyond the 30-seconds spot, in terms of non- traditional revenues that we are looking at for radio to deliver to the advertiser.
Given the investments you are making this year, when do you think you would break even? What kind of internal targets have you set for yourself for your service?
I think the internal targets are very aggressive. I don't want to put the entire company under stress, but I think the business will be far better than what it was in phase I of radio privatization. I think the breakeven will come far sooner than most of us imagine.
How soon- one year- more or less?
March-April is the time by which we will roll out. But it will be soon enough after going on air.
I believe you are also looking at giving out a stake to a global company, a radio company. Any thoughts on that, have you had any discussions along that line at all?
No, there aren't any clients like that for now.
Do you expect your margins to be a whole lot higher than other existing players given how much you are spending and what sort of advertising rates you are going to set for yourself?
Yes, we have made considerable investments in content, in infrastructure, and primarily in people, which is the key in this business. We are going to make our content very distinct, very unique.