Sitting in a make shift office with everything from 'superhit music' to the constant chatter of the Red FM staff around thrown in, I sit down to interview Red FM COO Abraham Thomas who mentions that the brand new FM station office will be up and ready in a few weeks. The station has every reason to celebrate - the recently declared ILT results show Red FM at number 2 in Delhi and number 3 in Mumbai.

Indiantelevision.com's Sujatha Sreedharan catches up with Abraham Thomas to understand the story behind those numbers and what is up the Red sleeve for the year ahead.

Excerpts:

The ILT 2007 Round 1 numbers threw up a surprise. Despite all the hype and hoopla around radio players, the listenership has actually seen a decline. What do you think are the reasons for this?
Although the ILT numbers are more or less in line with our in house research, I am clearly surprised as well that despite all the high profile launches in Phase II, programming innovations and advertising concepts, listenership has dropped by 6 to 7 points in Mumbai and Delhi. I don't know whether it's the anomaly in sampling or data, but I would have expected it to at best stay flat. There has been a lot of effort to increase listenership, so these numbers have definitely come as a surprise.

With radio, the basic question that arises is about ILT and its methodology. I know that people are suddenly distancing themselves from the results or abandoning the data. But my point is that we shouldn't throw the baby out with the bath water. There are shortcomings in the ILT - the MRUC has not really been proactive and has not been looking at the broadcasters' concerns as they should.

More than a year ago, I had raised the issue of cross checks. A couple of suggestions I had passed on included - a simple cross check whereby after the sampler is asked 'what radio station are you tuned in to', also ask him to give the name of a radio jockey from that station or a radio show on the station he listens too. Even if one of these questions is answered correctly, one can actually validate that data. MRUC agreed and said that these suggestions would be implemented but again they have gone back to their old ways.

The other suggestion we had made is that the IRS use mastheads in its survey. Radio surveys can also include audio mastheads or get the users to identify a stations' brand jingle or ask them to identify a station's logo id. It's not very difficult to do such a survey. So I am extremely disappointed with the lack of any user interactive activity.

So yes, there are shortcomings but I maintain that these are early days still. I've always believed that the trend across the different waves tell a story. And it is these trends that we should look at.

Are there other methodologies that we could look at? What works internationally?
We could look at some of the international methodology. Some of the players are now advocating what is called 'diary method'. In this method the smaller player might be at a slight advantage as the sampler who is impaneled is is forced to maintain the dairy and is therefore more conscious of the radio listened to. However, the shortfall here is that you are not capturing the information when you are listening to it. You're filling in the data when someone comes to collect it. So it still goes back to 'the top of the mind' function.

But I still believe it works because you are conscious of what you are listening to. You can also tackle the shortcoming by collecting the diaries twice a week. It will be that much closer to the point of listening and therefore the errors could get eliminated. Like I mentioned, the small players might get some benefit since they will be listed. All in all, I am saying that we have to have a more robust method.

You spoke about players who have disowned ILT and rely on their own listenership tracks. Isn't that an unhealthy trend?
I am not against in house research. We do a lot of our own in house research for our programmes and to understand our market. The fact is that when radio players disown a currency like ILT, it is a short sighted approach and we are doing a lot of harm to the medium. If you want advertisers to put in more money, you have to allow them to justify this 'more money'. For this you need a common currency. Overall in house researches and listenership tracks are very questionable. You might call it Maruti or Indica or whatever it is you call it, but bear in mind that you are doing more harm to the medium than good.

Because of this emerging scenario, people tend to rubbish all the research. We have to collectively arrive at one common industry currency and that is the only way to grow the ad pie. In fact that is the only way all of us can survive.

So for a two-month-old player to disown a listenership track is very shortsighted. I don't think they are doing justice to their own medium.

The branding story for Red FM with its 'baajate raho' attitude has worked for it. Is aggressive branding a need for radio players to stand out from the cluttered space?
Has the 'bajaate raho' branding worked for us? Yes, of course it has. But it's a combination of different things. I think one of our hallmarks is that we are a 'mass player' doing the same things as other stations but trying to do it differently.

We've been consistent with our music. We've been consistent with our attitude - both on air and off air. Whether its our RJs or the aggressive on ground activity we get into, they are all in sync with our branding. In fact on ground activation has played a big role for us. We've been visible in local trains, buses, cabs, at shopping malls or traffic signals- every time you've seen us there is that single consistent thought on 'local issues' that has made us stand out. Our music is consistently super hit. We don't play different music at different day parts. This absolute consistency with the Bajaate Raho attitude - RJs, music, advertising- on air and off air- has really been a driving point for us helping us stand out from the clutter.

Mumbai plus Delhi - which are what the advertisers really look at at least for now- we have managed to stay at a number two (Delhi) and close to the competition at number three (Mumbai). In Delhi especially we lead the competition by at least 2 lakh (200,000) listeners. We expect to increase that lead in the next wave.

The branding effort by radio players is evident; but when it comes to the differentiation factor it becomes elusive? Adult Contemporary Hits (AC), Contemporary Hits Radio (CHR), super hit only ….radio players may throw this in as differentiators. But is this the only differentiation point we have?
Firstly and strategically as a brand we look at consumer benefit on two levels. At one level we are offering them a very functional benefit - Entertainment. Music, cricket, Bollywood, music and even the local programming all of these form part of mass entertainment that we look at. In this stage we have decided to be a mass market player and therefore we have decided to stick with content which is not very different from what others are playing.

Within music, like I mentioned, 24 hours a day we play the same music. It's like a hot water strategy, you open the hot water tap and that's what you get all the time. There's no retro at night and house wife in the afternoon kind of music. We also promise that every song we play is not just a hit, it is a super hit and we arrive at that through our research.

This is very different from our competition which no doubt plays a variety of music but it may be a hit song, or an unheard of before song or even a tomorrow's hit. We are very clear that we play the super hits of today.

We also believe that there is an aggressive differentiation on the emotional level- through content and packaging. That is the differentiation best exemplified by our 'baajate raho' line. If there is a topic that touches or concerns a common man in that city, we will play it, we will bajaao it. Clearly over the last year and a half, bajaate raho has become a local parlance. We have Bollywood coming on air and saying 'please don't bajaao us', we have cricketers saying 'you bajaaoed us today'. We have on air properties like Angry Ganesan, Kamla ka Hamla and Sharmajis 'bajaaoing' different issues. We have created a personality around Red FM.

This functional and emotional benefit combined together is what sets us apart from competition. We also believe that this is a rule of three. The top three players will make most of the money. If you want to be in the top two or top three then you have to be mass market.

If you are willing to be a niche, then you concentrate on different genres of music and programming formats. So you have to decide whether you want to position yourself as a mass player or a niche player. We clearly decided to be a mass player and we are gunning for leadership. Niches can be profitable too, provided you find your niche and market it aggressively.

In a three to four player market, radio stations staying 'mass' may have seemed plausible. But in a multiple player city like Mumbai and Delhi, will it help to stay 'mass'.
In our case, we've consciously tried to build personalities within the radio with RJs like Malishka and Nitin who are likely to bajaao you if you meet them on the streets or within the studio. So our RJs, music, cricket will help us stay mass and we will try and build a personality for our station to stand out.

There are format radios coming up that claim more music less talk or on the other hand talk radio. What's in store for these stations?
There are radio stations that are looking to play Hindi plus English music and for sure they will get their audience. You can go entirely English or play regional music - Punjabi, Gujarati, Marathi - you can differentiate on the context of language. You can also create a differentiation in terms of the content - for example talk radio.

It is possible that these players might struggle in the beginning to monetize their content. While the top three will run away with all the money, the rest will find it better to define their target and then it depends on how well you service your segment.

You can be a comfortable niche and make money. I believe that within a year or two radio stations and their audiences will get more defined. People will know where to go for what kind of music. One thing is very clear. You cannot be all things to all people. The leader who came into the market first, positioned himself very consciously.

The radio entrants now will be forced to sharply focus their audience. The flip side of focus is that you have to give away one part. You decide your turf and then you focus.
Within the mass space - 70 to 80 percent of the ad pie will be taken away by the top three.

With the sheer number of players entering the markets, is there a fear that the space is getting cluttered or there are chances of a consolidation happening anytime soon?
That is not what international trends show us. There are other cities in the world which have a number of stations catering to different tastes. There is a space for more stations to come up. But one of the reasons why we are still not getting a sense of differentiation is also because it is not possible to have more than one brand in the same city. When stations are allowed that there will be greater branding as well more genres of radio operating in the space. For now, since you are allowed only one station you want to be the biggest and the best.

Given these constraints, where do you go from here?
We have decided to be an entertainment station and if we have decided to be in the entertainment space then we have to work around these parameters. If we want to get into news and current affairs, then those are additional avenues. If cricket commentary was to be allowed tomorrow and I want to carry it on my existing station, I would have to do that at the cost of my music. There will be incremental new players who will come in and take those slots.

But currently we look at a void in Bollywood entertainment and we are filling up that space. But the regulatory policies are fairly good and we are happy the way we are progressing for now.

Almost every radio player says that - very happy with the way things are…
If you were part of the Phase I, paying those exorbitant fees, you would be very happy with the playing field today as well.

Non traditional advertising or activation units may be the new mantra but radio players have identified its benefits pretty early on. But where does it go from here?
If you look at the three media- print, television and radio - there is a very distinct line dividing content and advertising. In television, you might blur these lines with programme placement and contests but in radio it is a seamless medium.

Advertisers have been asking to be included into radio content a lot more, without being too obtrusive. Advertisers then started asking us to help them with 360 degree solutions for some of their products. We had a Ford Fiesta come to us and say that we have a car parked at a mall, can you have an RJ come down and do some gig around it.

More and more people are asking that extra bang for the buck. This is the genesis of activation. It has also helped that advertisers have complained that there is a lack of a single, credible agency to carry out its promotions nationally. This is where we step in.

Red Activ works on two premises- we build properties on which multiple brands can be built. The 93.5 Car rally worked that way. We also do single brand activation, where we look at solutions for clients. It is a natural extension for us and our medium is used to drive footfall for the client.

Sure it's an advantage if you have a station in that city so that you can leverage the local market as well.

That is the first factor. Then is the issue of packaging. If I am in twenty cities then it is easier for me to package it in all these cities collectively. I believe I am number six in 45 cities; therefore I give you a discount of 10 rupees. But what is your relevance in priority markets? It is the priority markets like Mumbai and Delhi that sets the trend.

Packaging by definition means discounting. In our media industry, people don't package their media collectively. They will sell television separately, radio separately and print separately.

We believe that we have to sell premium. You can't just fall back on sheer scale; you have to be relevant in each city.

Considering that the Phase II cities are mostly non metros, are advertisers even excited about this kind of packaging?
The non metros opening up are relevant to sectors like FMCG or telecos but the bulk of the advertising is still restricted to the top 8 metros. What happens is in the smaller markets it is the local advertising that will have a dominant role.

So while in the larger cities, 70 percent is corporate advertising and 30 percent is local, in non metros the story will be reverse. Besides the smaller markets are markets of tomorrow, while these are markets of today. So yes, you will have to invest in the markets of tomorrow as well.

They will create new advertisers and pull advertising away from local media.

You've been called a reminder medium, a secondary medium, an incremental medium. But are you still playing second fiddle to mainstream mediums?
Right now we get three percent of the advertising pie, while internationally that number is closer to a 6 to 8 percent. In Sri Lanka, the radio advertising amounts to almost 20 percent. Unless the share becomes about 8 to 10 percent, it is not viable for the advertiser and we understand that.

Secondly in other countries, radio evolved and developed before television came in. In India, it is the reverse. There is a lot of television hangover that is happening. Until recently, the creative agency, the client and the planner were more worried about meeting their objectives in the primary market - television and print. In radio, they invariably did not have the time to create ads for the medium and would pass off television jingles to play on the radio station as well.

Lastly and more critically, there is not enough information to justify the advertiser's faith in the medium. We've spoken about the methodology, it encourages confusion. Unless you get a currency where advertisers can confidently say 'yes I can put my money over here and this is the reason I want to do so' the ad pie will not grow.

But it is changing. Brands are being launched on radio. We've created a creative solutions team within our station that works for various clients - we say that don't give us those television commercials, give us a brief and we will create an ad that is more relevant to the medium.

But data that justifies the spend is a big concern. Most radio players however look at this as an advantage to pick and fight over each other instead of viewing it as an industry issue. They look at it and say … 'good!let the small players bleed; we will look at how to milk this best'. There is a bit of a short term consideration. It will be a while before this matures into a more robust industry body.

What would the road map for Red FM look like in the coming year??
Radio is projected to grow rapidly. The growth however is more geographic at this stage. Within the city, the growth is encouraging but at a slow pace.

In our case, we realized that a lot of our listeners are connected to our personalities, our RJs, our properties like Angry Ganesan or Kamla and therefore we have made them available to download on the mobile phone. We launched an initiative called the Red Mobile. We work with mobile2win and you can download all these properties for a price. That's a logical extension. We are also looking at our net presence. In fact our site should be up this month. It will be interactive - celeb chats, blogs, trivia - you will find them all.

Right now of course we are looking at cricket. We have contests, tie ups and loads of prizes. As part of this initiative we have a tie up with Sports Bar at Phoenix Mills in Mumbai. We plan to extend this to other cities as well.

Radio is no longer a passive medium. It is now well and truly an active medium both for the listener and the advertiser. By the end of this year we will look at local advertisers and how to target them as well.

But bottom-line - We are gunning for leadership.