Why don’t we have format radio
shows of scale, and even if we have format shows why is it difficult to recall a single name unlike the format shows on television,
such as Fear Factor, Who Wants to be a Millionaire, Dancing with the Stars or
many other such shows? Is it because of the nature of the radio as a local medium
(each city having its own programming mix), or because of the economics behind
it? Let us discount the fact that due to the aural nature of the medium,
creativity on radio is limited. There are enough creative options to build
format properties on radio.
In the case of multi city radio
networks, I have seen concerted social campaigns that gained national traction
and attracted public notice, be it Red FM’s ‘Dabaa Ke Bajaao’, urging the
public to vote during the 2014 Lok Sabha Elections or Fever FM’s ‘Voice of
Change’. Was it the magnitude of the cause behind the success of these social
campaigns? Why can’t the same success with social campaigns be replicated to
create format shows of national stature on radio?
These questions merit a detailed
debate, beyond the scope of this post. Let us attempt an answer by taking an
economic view.
We’ll make some assumptions.
Assumption 1: Contests/games format
such as identify the voice, identify the song etc. are the result of a station’s
own creative process.
Assumption 2: The station uses a
premium priced short code, i.e. each time you send a text to the short code,
you are charged an amount typically INR 3.00 or any other amount, which is not per your regular SMS
tariff plan.
Assumption 3: The premium SMS
charge is split between the telecom service provider and the short code owner
(in this case the station) with telco keeping a lion’s share.
Assumption 4: The amount retained
by the station is used to sponsor the prizes. For example, if the station
receives 1,000 responses to a contest question on a given day on its short
code, the total kitty is INR 3,000 (1,000 * INR 3.00). Assuming the revenue
share is 50:50 between the telco and the station, the amount available to the
station for prizes is INR 1,500.
Pretty simple, isn’t it?
Let’s add another entity to the
mix. The entity that develops contest formats powered by the underlying
software solutions, which integrate with various media to produce game shows that
can also be played over radio. Let’s call this entity ‘contest IP provider’.
Now, if a station uses the concept/format provided by this entity, the above
kitty of INR 3,000 has three claimants. Assuming the share of the telco is
fixed, not much is left on the table for the other two.
Is the radio ecosystem ripe
enough to accommodate contest IP provider? What are the potential hurdles faced
by such contest IP providers:
First, it’s an additional overhead
for the station. A station has the ability to attract sponsors and advertisers even
without paying extra for add ins. At best, it could be a quid pro quo wherein
the station can provide air time to ‘contest IP provider’ to promote
themselves, thus translating to zero dollars for the contest IP provider.
Second, even if it is a fixed
license fee charged by the contest IP provider, the fee needs to be realized by
the station’s sales and marketing folks when they go looking for sponsors for
such licensed format shows. I believe sponsors may not be willing to pay more
than what they are currently paying for air time because it increases their budgets.
Sponsors may also give a pass to give high value prizes in lieu of dollars, which
directly impacts the number of people who participate in the game/contest
because the number of participants is proportional to the value of prizes.
Third, the SMS revenue share between
telecom service providers and Radio Stations is not favorable for innovation in
India. If the show goes well, the contest IP provider makes money for the telecom
service providers. Not much is left for the radio station and contest IP
provider, thus there is not much motivation for a station to run a licensed
format show thereby incurring additional costs.
I am not into the skin of the business of radio, and would like to have
your thoughts on this. Is the nature of the medium such that it does not lend itself
to format/license shows of scale? Is there no room for Endemols, Celadors or
Freemantles of the world on radio?
