Rebranding to Mirchi signifies business diversification and expansion beyond radio to becoming city-centric music and entertainment company with offerings across music, video, filmed entertainment, social media, live events, storytelling, podcasts, and original content. Prashant Panday, MD & CEO, Mirchi divulges the details on this new journey for the brand, their vision for growth, anticipated challenges, and more.
Edited Excerpts:
In the rebranding the brand dropping ‘Radio’ from its name is prominent. Do you think the move stemmed from a popular notion that the medium is somewhere losing grounds?
Radio is not losing ground in the Indian media any more than any other traditional medium is since the net is growing rapidly. Radio listenership is transforming rapidly from being a youth + family medium earlier, to becoming a car-owner+youth medium. Over the last few years, as per IRS data, car listenership of radio has shot up from under 10 million weekly to over 40 million now. With cars growing, this number will only increase further. Also, with increasing traffic jams, the TSL is bound to increase. The best part is that car owners are affluent and live in big urban centers, so, they are highly attractive to advertisers.
I think radio continues to have a strong future, stronger than other traditional media.
We have not pulled out Radio because of any insecurities about the medium. It is a step to re-position the brand as a larger entertainment brand, and not merely a radio one. It is giving shape to what has been a reality for us for several years now. Our digital footprint is more than our radio footprint already. The logo change is a strategic step in matching our brand identity with business reality.
Being one of the prominent players in the Radio business, what has led Mirchi to foray into other verticals of entertainment, and why do you think it was the right decision?
We have more than 350 specialists in programming/creativity. TV broadcasters mostly buy programming from production studios, who in turn hire talent on retainership/consulting basis. Internet companies have lots of techies, but few creative people.
Print companies have lots of editorial staff, but not enough on the entertainment side. This unique advantage that radio companies have is what we have leveraged. These 350 people are truly creative and across all platforms and formats, not limited to audio. Their talent is multi-media. All we are doing is tapping into this talent. Further, there is a huge alumni pool of Mirchi people, all of whom share a strong bond with the brand, the company, and its current people. We will leverage all those people too.
Take us through the revenue trends seen in 2020? Out of all the offerings in place, which vertical translates into maximum RoI?
Radio was 65% of our revenues in FY20, and it of course is a very profitable business. Our solutions business was 35% of revenues and has now started turning in high gross margins.
The ROI of the solutions business is high because investments needed are low (mostly working capital). The ROI of the radio business tends to be low in the initial years after investment (because of the steep One Time Entry Fee that is paid to the government for 15 years in advance) but keeps improving as the years go by.
Within solutions, our media-solutions business is highly profitable. Our digital businesses also are profitable. Our on-ground IP solutions businesses have lesser margins because of the vagaries of that business. We have a strategy to get those up as well.
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How has the journey of the making of a new brand identity been? When did it all start and the key people involved?
The revenue side of Mirchi has been transforming for several years. Like I mentioned, we had grown the Solutions business to 35% in FY20 itself. We see this growing to 45% to 50% in the next five years, given the faster growth rates we are seeing. Keeping this changing business reality in mind, we discussed our plans with our Chairman, Vineet Jain 2-3 years back. He was fully in support of it and he added new ideas.
In our strategy meeting with our Board two years back, we shared plans, and the Directors were supportive of the move as well (while highlighting a few cautionary points). The formal process of changing our brand identity began two years back.
A key person in this transformation was our National Marketing Head, Sudipta Suri. She was very keen to get a new agency on board and after an extensive search, she zeroed in on Saatchi & Saatchi. In S&S, we have found excellent partners. Nandan Srinath, our Executive President has put a lot of flesh behind the basic skeleton that Sudipta and S&S developed.
The digital arm of business focuses on new media properties like Web radios, Mirchi Originals, Mirchi Murga, and Filmy Mirchi. How are these going to stand out amidst a vast clutter of digital or original content online?
We are not competing with TV channels, nor with music OTTs, nor podcast specialists, nor with video OTTs, our offerings are unique and we do not need to compete with anyone. We will provide entertainment in 63 unique cities, in all local languages, while using hyperlocal context.
Secondly, we will sell these entertainment products not as individual products, but as parts of “solutions packages”. So, not only will we make content for our clients, but we will also market it on their behalf. We do not need to compete. But we will collaborate with all. We see ourselves collaborating with TVF and Netflix and Zee group and Wizcraft, and all such specialists. We will be hyperlocal generalists.
How is Mirchi leveraging the digital ecosystem to become a wholesome platform that it has upgraded to?
We have made strategic changes in our organizational structure. Rahul Balyan as our CDO is focusing on platforms and taking direct charge of growing Mirchi from FM to all platforms, including, digital.
We have also set up a business team in the digital business, headed by our erstwhile Regional Director (West), Vivek Mohan Sharma. We have a strong revenue team, headed by Preeti Nihalani and her digital sales head Nikitsha Chopra, which will monetize the business opportunities. We have our content head, Indira Rangarajan, who has made several celeb-based video shows. All these people report to either Nandan or our Chief Programming Officer, Tapas Sen.
What is Mirchi’s media mix like? How do utilize the power of social media for outreach and consumer campaigns?
We have a strong presence on social media. Between our corporate handles and the handles of our RJs, we have more than 20 million followers across all our social media platforms.
But it is on YouTube that we find our maximum reach, with an estimated 50 million people watching our content monthly.
Once a year, when we do our Mirchi Music Awards, we attract more than 120-130 million people. We plan to leverage all of these to spread the message about the brand. At the same time, we will also tap into group resources of the TOI group to enhance our reach.
When is the campaign ‘Sirf Radio nahi, har Entertainment mein Mirchi hai’ going live, and how will it be executed?
The campaign has just broken and will be extended to print advertising. We will leverage the full might of the TOI group to reach the maximum number of people with the new brand promise.
The execution, led by the music video, was a leverage of our strong relationship with the music fraternity. It is this symbiotic relationship that we have leveraged in producing this jingle. That is the mainstay of our campaign’s execution.
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