Apurva Purohit, CEO Radio City 91.1 FM, in conversation with Pavan R Chawla, Director Content Indiantelevision Group and Editor RadioAndMusic.com, about the Radio Industry; her views on IRS and RAM; Radio City's successful internet Radio Station with 14 lakh listeners; content differentiation; Radio City's Phase-3 plans,  her vision for the network's future, and more. She also commented on the slew of the stories about ADAG's interest in buying a stake in the network. Excerpts from the conversation.
 

Tell us about your background in brief, and the learnings you brought forward from advertising and television into Radio.

I'm a graduate from IIM Bangalore. Since I was always passionate about advertising, I didn't go through the typical placement process and joined Rediffusion. Between Rediffusion and Ulka, I spent my first seven-eight years in servicing and media. Then, in 1995, Ulka gave me the opportunity of setting up Lodestar,  which was the first media buying outfit in the country. In fact I remember Fulcrum actually got set up some 15 days after. I was with Rediffusion till 2001 and then moved to Zee TV when Sandeep Goyal asked me to join him, after which I joined The Times of India Group to help set up Television there. I worked in Zoom, and partly on setting up the infrastructure for Times Now. Then, in 2005,  I moved to Radio.

Television, of course, I enjoyed  a lot. Media buying and planning too were very exciting because while I was there, Lodestar had won Agency of The Year, and it set an example as an excellent agency -- which it still continues to be. Moving from the media buying and planning space to the other side of the fence was more to get into real business and operations. Ultimately advertising and media will end up being more consultants to the client' business, while  here you are actually running a business. So that was really a big high in moving to television.

Radio presented yet another facet. Whether you are in Radio or TV, you are a CEO running the business operations  You are running business operations, and both in Zee and Zoom you were working for somebody versus at MBPL, which is owned 100 percent by a private equity fund – and PE funds run businesses in a particular manner. There is a lot of operational independence and you are in a sense part-owner part-entrepreneur of the business because you have a stake in it and have been given the reins completely. So that gave me the experience I was seeking.
 

What were the key learnings from your earlier experience that helped you in Radio?

I'd break them into two parts – the functional part, and the leadership or management style. I've been an inherent part of this business from the time television actually started. We were already in media in '92 when people were asking,  â€?What is this animal called Zee?' and Amul played the first ad on Star Plus. So we've seen the media world in its entirety. And that was the best functional training because one saw how television evolved. The generation before me was a very print-focused one, and ours really has been the electronic media generation. So whatever learnings we got on the electronic media, like how to buy and sell electronic media, really helped on Radio. One understood the functioning very well through experiential learning – understanding how to sell Radio better, how to market it better. Here I am specifically focusing more on Radio rather than Radio City because that's the point I would like to stress upon – about the Radio industry rather than just Radio City.

And what about learnings for leadership?

I guess my learnings on leadership and management style helped because we have possibly the lowest attrition rate in the Radio industry -- around 15 to 18 per cent against the industry average of 30 percent.

Our revenue growth in the first half of the year has been 30 percent when the industry has  grown at around 10 percent. In an industry survey, a leading marketing magazine rated us as the favorite Radio Network of media planners. That is really because of the relationships we have cultivated across.

We have been the Number One radio station and that is because of the consistency of people who has been around us for the last four years. Whether it is revenue or ratings -- or our relations in the market -- they have been fabulous. And that's what we are happy about  and concentrating upon to grow.

Define your people management style.

As people who are in the service industry, we should remember that everything is about people – our machines are our people, our factories are our people. So if you don't have the basic EQ to manage people,  then you shouldn't be running a service organization.

For managing people and having a higher level of EQ there is a lot you require. Indeed,  you are a servant leader; you can't have your own ego. So, flamboyant leadership is not a leadership style that would work well in organizations which are people-driven -- because your style has to be that much more mature, and based upon long-term thinking.

For example,  one thing I'd like to mention is, we don't have those inordinate stars in our firmament. Because if there were stars, we'd have to treat them differently from our employees, whom we consider equal. We've spent the last five years developing robust HR policies. We've worked in other organizations where if you like somebody, he gets a promotion; here, what our people talk about is that the performance management or reward mechanism or the KRA-setting program is absolutely fair.

Also, I believe you should never compromise. You have to take tough calls. I remember, when the fragmentation happened, someone came to me and said, â€?You don't have any programming head, and I'm the only person who can do it.' I'm talking about 2005-2006 here. The person said, â€?This is the salary I expect, and if you refuse, here's my resignation'  I said ok, and took his resignation. He said, â€?But aren't we having a discussion?!' I said, â€?I don't run the organization on blackmail'  So we had to take a lot of tough calls. A lot of people fall, because in a desperate situation, you want to keep the only person, but then what about the 300 other people who did not walk up to your room to take advantage of a crunch situation? Will you let them down?

The practice of what is good HR, and the practice of a servant leader, consensual style, is something that perhaps men sometimes are not able to do as well as women can.

Is that a conscious decision -- to have more women at senior positions?

Maybe. But it's serendipity too, right, because in media, anyways 30 percent of the work force is women; at Radio City, it touches 50 percent. I think they find the culture easier to work with. We do have lot of flexible HR policies to take care of issues. And I also credit the male HODs at Radio City for this. We recognize diversity, and promote it. That's the culture in our organization.

Today people are looking at solutions for getting out of the recession so that tomorrow they can de-risk themselves. E&Y carried a story that said  Diversity equals Profitability.

Our employees are in the age group of 20 to 54 and from several areas, across departments. This diverse management is able to run the operations better.
 

Radio City has fared well per IRS 2010 Q3. What are the areas of improvement and what will be your focus markets going ahead?

There are certain markets which are still a challenge, but the biggest positive for us was Bangalore, where we emerged as the leader,  which has not been the case per the previous IRS  So that's something we are very happy with. Focus areas will be some of the south markets,  where we believe we can do much better.
 

At present you are in 20 cities. What is your plan and vision for Phase 3?

The first thing is whether Phase 3 is at all going to come out!  We're pretty skeptical because it's taken quite a while for the government to move ahead on it. Assuming it does happen, well… even in Phase 2 our vision was to be the most profitable player in the Radio industry rather than the largest in terms of size. Because of which we took a conscious effort to be in the metros. So if Phase 3 comes out, we will definitely want to expand in the same cities again  Our game plan is to bid for and win more licenses in the cities we are currently in. Also, there are a few more cities we would like to enter. Kolkata, which is the only city for which we bid in Phase 2 but didn't win, is one. Plus two or three other cities in the north, where we feel we must establish our presence. We would like multiple frequencies in the same cities.

Please comment on the slew of the stories about ADAG's interest in buying top 4 stations or a stake or whatever in Radio City.

For the last two years,  at different points in time,  we've had different suitors. We've had different people talking. Practically everybody in the media industry, at some point or the other, is purported to have been interested in Radio City. I really don't know what to comment beyond that… you know, sometimes I feel like Draupadi  because there's perpetually a story in the market. See the fact of life is that we are a PE-owned organization, right? And a PE-owned organization, by the very nature of their business, will get bought or sold. That is the reality, right? Did it happen two years ago when the first stories started? Will it happen now? Will it happen two years hence? Who can say?

So, to the best of your knowledge and belief, there's no truth in these stories?

We will pull out stories two years hence! As I said, everybody in the media industry at some point or the other, has been a suitor of Radio City, so we're  just happy to watch the fun and games.

So you're saying the recent stories are not true?

No, they are not.
 

How happy or otherwise are you with the way IRS reports Radio listenership. Any suggestions or specific requirements from it that would help the Radio business monetize itself better?

On IRS – what can it do at best? It can monitor day-after recall, it can monitor listenership and reach. We are pretty much fine with it. When it was coming out once a year, we were concerned about the frequency, but now, we are very happy with the quarterly report. I don't think making it monthly or weekly is a good idea because it will actually impact the quality of research.

And what about RAM?

The challenge for RAM is how to get into more cities because since last the last two-three years it has been in just four cities. When you speak to LV (Krishnan) you will realize that it is clearly the Radio Industry which is not fully supporting him in expansion, because nobody (from Radio) is willing to put in that money  The fact is, we have concerns about some parts of RAM. We believe that the field work is not as ideal as it should be. Diary was to measure Listenership, but we believe it still measures top-of-mind recall. So there are certain concerns about the current diary,  therefore people like us are not willing to pay more money to extend the same ambiguity to other cities.

Do you also have your own panels?

We have had panels since the last three years in Hyderabad, Chennai, Ahmedabad and Pune, run for us by AC Nielsen – some 400 to 500 people per city. We get monthly data, awareness, spontaneous awareness, feedback and inputs for programming.

What is the biggest challenge Radio is facing in India?

Clearly the  biggest challenge for the industry is regulatory. It is the only medium that is so restricted by the powers that be, and this is stifling the growth of the industry. In the last three IRS reports,  listenership  for Radio either hasn't grown or it's grown very marginally,  because of the restrictions we have on content – no news – and not having multiple frequencies. We are forced to run only general entertainment content. We don't have the opportunity or the policies to run niche channels. And only if alternate channels come out will listenership grow, and the category will expand. Unless these regulations are changed we are seeing Radio listenership between 30 and 40 percent. And if that remains the scenario, how do you expect revenues for the whole industry to grow?  So that is the single biggest challenge

What else?

We still believe a lot of advertisers are not recognizing the power of Radio. You will never hear me go out to industry forums and make presentations about Radio City, because Radio City can take care of itself – it's the Radio medium that needs to expand. Where ever I get an opportunity I make presentations on the power of Radio. Even when we induct new people, I tell them, â€?Go out and become Radio evangelists --  there are enough facts around Radio: how you can actually press emotional buttons in the consumers' mind through audio… and so much more.

Thirty to 40 percent of the advertisers are not recognizing the power of Radio  In fact television, which is the largest medium, has recognized that! Apart from their own promos,  the second highest driver of viewership on Television is Radio. TV is the biggest advertiser category today.

Where do you see the share of Radio in the overall advertising pie by the end of Phase 3?

I think it will definitely move. It's approximately 4 percent  now,  and it will move upto eight percent, provided Phase 3 happens at all -- both width-wise in terms of newer cities and towns and depth-wise in terms of multiple frequencies in the bigger cities, which would lead to greater listenership and therefore revenues.

 
How happy or otherwise are you with the AROI's functioning after your tenure as president? Any suggestions you have for it?

I am very happy with it. I think Anurradha Prasad taking over as President was a very positive for all of us because she understands the larger political scenario, and the work that all of us started two-three years ago as far as evangelizing the medium, or lobbying with the industry, working on music royalties… all of it has continued.

Your views on the proposed Copy right Amendment Act, and what you feel is required?

We have been saying for a long time that we need the Copyright Board to sit on a regular basis. It has to be a fully functional board. We've been saying there is a lot of ambiguity pm royalty payments. Who has the rights to collect royalty? We've been asking for a single collection body. Right now there must be some 50.. 60 people to whom we pay royalty. So we said there should be one collecting body. We hope a lot of this gets cleared in the Copyright Amendment Act. It certainly has strong implications for us.
 

What do you suggest Radio and Music should do to work amicably together in India?

Over the last 10 years several initiatives have been tried. It is a fairly long period. We have tried from both sides, through various forums, to come to an amicable stance  But obviously that didn't go anywhere, which is why finally the legal cases  So I really don't see anything except, finally, a closure of the legal cases -- whichever way that goes -- as the ultimate resolution  After having tried various negotiating mechanisms,  finally the legal route is the only one that has worked  We are happy to see it right up till the end.

That both need each other is certainly true. The operating part of the music industry recognizes that. Even now we get calls saying increase the rotations of my music. People are willing to pay for slots on Radio to promote music. Which they wouldn't want to do if it didn't help Music.

What are the opportunities you see for Radio City, going ahead, and why?

We believe that more than a terrestrial private FM network, we are a content provider -- and a damn good content provider. So, how else do we monetize or redistribute our audio content better? We launched Fun Ka Antenna which is internet Radio. It has 14 lakh listeners,  which is higher than many of the radio stations in the country today. If you put all the radio networks together,  it is the tenth largest in size. That's really big. We air all kinds of music -- Sufi, ghazal, English music, Rock, Indi pop and other genres. It supplements our Radio City listenership, which is drive time. 10 am to 4 pm is the maximum listenership for Fun Ka Antenna. Also there are no geographic restrictions. We have separate RJs, a separate feed that produced for this.
 

…and a separate sales team to  monetize it? Have you begun the sales effort for Fun Ka Antenna?

So far, we were building a critical mass of listeners, and 14 lakh listeners,  we believe,  is a critical enough mass to go to market, so we have just put a team in place and have started marketing it.

 
RAM Adex indicates that around 60% of those who advertise on print in the smaller markets do not use any other medium at all. How – and how aggressively -- do you target such advertisers?

There is a two-part strategy to our advertising, sales, marketing. We believe we work as a very good compliment to television. You take television, you divert 15 percent of the spends to Radio, and the combined plan will be far far higher in efficacy. As far as print goes, we say you should supplement print with Radio because Radio is far more inexpensive than print. If you need a local media plan you will pay six times on print, while at one-sixth you will get the same kind of reach and frequency on Radio. When you talk about the 60 percent, you will see that there are a lot of classifieds in that print advertising. We've been running very interesting classifieds kind of models where in the afternoons we give specific slots for such local advertising.
 

How do advertisers use Radio City on the Strategic: tactical comparison?

Fortunately -- and increasingly -- advertisers are using it for both. So I see a lot of brand advertising on television which is translating beautifully on to Radio as a support to television, and I also see Radio-specific planning which is more tactical, promo-driven, call-to-action-driven. Big clients like Cadbury, Vodafone, would do both  Vodafone ran a specific Radio-led campaign during Ganpati --  only Radio,  and only Mumbai. And Vodafone would do also brand building when they are doing the national campaigns. So those are the most intelligent and erudite users of Radio.

 
The biggest challenge today is content differentiation. Tell us about any new content initiatives on your network in 2010?

Some of the initiatives I am very happy with are really the CSR kind of things that we have done. Whether it is City Ki Chai or City Ka Nashta, where we said we believe that we are an EQ-led station and we are connected with the people. For example a lot of radio stations during monsoons give raincoats to policemen,  using it more as a marketing tool because their logo will be branded all over the raincoat. However, we spoke to the police commissioner and he said these guys (the cops) are standing at their beats for eight hours without a break, even  in the rains. So our RJ's went around and met two-three thousand of the havaldars whom they actually served City Ki Chai and City Ka Nashta. We covered what he feels, standing there on duty, and getting mostly dirty looks and abuse from most people. We had 50 such programming initiatives.

The Vodafone Ganpati activity, which was an on-ground initiative where winners got a chance to fly in a helicopter and see and experience the Ganpati immersions across Mumbai. It was a fabulous integration of programming, on-ground and on-air. These are the two things I remember off-hand.
 

What do you hope Radio City will achieve under your leadership in the next three years?

I think whether it's on revenue or profitability, we have done well. What I think the whole team is proud of  is that ours is  possibly the only medium-size,  stand-alone entity without any big daddies behind us, and with absolutely no backing or support from a clutch of sister media verticals, as it were. And we've beaten the industry on revenues. I would like the whole organization to be even more responsible, sensitive, humane and mature. So that people look at us and say we are professionals in the true sense.