Radio Mirchi to increase marketing spend in FY18

MUMBAI: Following the launches of new station acquired under the Phase III auction, Radio Mirchi owner Entertainment Network India Ltd’s (ENIL) is planning to focus more on marketing for its new and existing radio stations.

With new stations coming into play, the network is planning to switch their marketing strategies by focusing more on television advertising. The network has sketched a marketing following which they are hoping to breakeven in between four and six quarters.

Speaking about their marketing plans at the investor’s conference call, ENIL MD and CEO Prashant Panday said, “For the core of Radio Mirchi business we are going to be switching our marketing strategies and doing more of television advertising and that will see a certain amount of increase happening during the financial year. A large part of the marketing increase would actually happen in supporting the new stations launch. We have launched the whole network of second frequencies’ so if we launch a particular frequency in Mumbai, Ahmedabad or Hyderabad, then that will be supported by a fairly heavy amount of marketing spend and we have factored that into our business plans and into our bidding plans. And therefore when we say that we hope to breakeven in between four and six quarters, it is after taking into account our initial marketing plan. There will be higher marketing spends in core Mirchi and there will also be higher marketing spends in the new launches.”

By the end of the calendar year, the network is planning to rollout all the remaining stations in 14 cities. The network has acquired 14 new stations through the Phase 3 auction of which they had already launched – three frequencies in Guwahati Kochi and Bangalore.

Panday said, “Very soon we will be launching in three other cities probably by the end of June and thereafter by the end of this calendar year we believe we will be able to complete the rollout of all our remaining 14 cities. With 14 more stations to be launched from the Phase III, it will take our total count to 53. At 53, it will leave 3 stations of TV Today which are still to be acquired by us which are the major stations of Delhi, Mumbai and Kolkata. Litigation is still underway, the courts are hearing the matter but we are now reaching a stage where the hearings are going to be concluded in the next month or two. As and when the whole TV Today deal is consummated, we will move to the maximum strength that is allowed under policy.”

Recently in Bangalore, Radio Mirchi launched its second frequency in Hindi with RJ’s hosting in English. Panday stated that the response that they received from the first two weeks from Bangalore is overwhelming and has generated lot of interest in the advertising fraternity in Bangalore and elsewhere. “As a strategic measure, we have decided not to take any advertising for the first month of channel launch because this is the period in which our entire focus is building the brand in that city,” he said.

In March 2018, ENIL has signed a MoU with TV Today for the sale of TV Today’s New Delhi, Mumbai, and Kolkata radio stations. ENIL had clarified that the proposed transaction will be undertaken by way of a business transfer, and not by way of a share purchase transaction or a share subscription transaction. Currently there is a stay order on the migration process of TV Today. Panday said that as and when the matter gets resolved they will pay the migration fees. “ Rs.71 crores is the migration fee that TV Today will have to pay as and when required. Our consideration has been fixed at a certain value keeping in mind the migration fee. This is the acquisition price and there will be no additional cost,” he said.

Currently the network has a total of 39 stations that are under their brand Radio Mirchi with 32 being originals, 4 small stations acquired from TV Today and 3 new launched stations. The network has acquired 14 new stations through the Phase 3 auction of which they had already launched – three frequencies in Guwahati Kochi and Bangalore.

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