Mid-Day Multimedia's Radio One beats the slowdown ( Part of Rakesh Jhunjhunwala Portfolio)

Amid the slowdown gloom Radio One, the joint venture between Mid-Day Multimedia ( Part of Rakesh Jhunjhunwala Holdings) and BBC Worldwide, has something to cheer about. The FM player has reported a 72 per cent growth in revenues for the period April to December 2008 as it declared its Q3 results on January 20, 2009.

The company’s PBT operations (before license fee) for April to December 31, 2008 period is positive and has grown by 108 per cent over the corresponding period last year. Radio One has reported a 49 per cent growth in Q3 FY09, as compared to the corresponding quarter of the previous fiscal. In comparison, the radio industry has dipped 6 per cent in the six metro cities in Q3, according to the company.

Commenting on the Q3 results, Vineet Singh Hukmani, CEO, Radio One, said, “Despite a great H1 and the subsequent slowdown in Q3 in the industry this year, we have maintained our performance from Q2 to Q3, essentially due to focus on targeted listenership, efficiency pricing and stringent cost control. Our new stations – Ahmedabad, Pune and Kolkata – operate efficiently with an average of less than 14 people each, and our all India costs are lower than the industry average by 39 per cent. Our all India headcount in seven cities is 144 people against the industry average of 235-250 people across seven metro cities. Our marketing and advertising costs are not even 20 per cent of the industry average.”

On the future of the radio industry, Hukmani said, “Performance of radio companies would have improved drastically, but recession is driving rates of all media down (led by print), as everyone is chasing outlays and not rates. Even stations that are ranked high in RAM have gone into survival mode and have cut their rates drastically, thereby allowing an irreversible commoditisation of the industry. This commoditisation further nullifies their past and present expenditure on brand building. The cost of music continues to be very high, which further restricts PBT growth. The I&B Ministry has to wake up to the genuine requests made by the AROI for support on these fronts, especially on extension of license fee period from 10 years to 15 years. No player would be looking at getting into Phase III if these Phase II problems prevail. 2009 is the year that the I&B Ministry will make or break the radio industry.”

Radio One is positioned as a metro specialist and operates in seven cities – Mumbai, Delhi, Bangalore, Chennai, Pune, Ahmedabad, and Kolkata, where it launched in December 2008 to complete its metro footprint.

As per Sep 08 share holding pattern of Mid-Day, Rakesh Jhunjhunwala is holding 22,50,000 shares of the company