He has over 25 years' experience in commercial radio, having worked at radio stations in all five continents. Now, Ian Grace is launching an FM radio channel in India as well. The chief executive of Virgin Radio was recently in India to oversee the launch of FeVer, the radio channel powered by Virgin.
For someone involved in a business that's all about spontaneity and extempore speech, Grace is a keen believer in the power of research. He spoke with Govindkrishna Seshan on, among other things, the importance of data in the broadcast business. Excerpts:
Tell me about Virgin's entry into India.
From a Virgin perspective, India is a very attractive and developing market. The radio industry here has just had its second phase of restructuring; the earlier regulations posed some problems for companies.
But after this round, the policies are very attractive for operators. The Indian radio industry is already flourishing: it is growing at 30 per cent and is currently pegged at Rs 300 crore (Rs 3 billion). We expect this figure to double by 2010 and account for 8-10 per cent of overall ad spends by 2012.
Isn't that an ambitious figure, given current levels?
At the moment, radio accounts for less than 2 per cent of the overall advertising pie in India, but we believe that will change quickly. This is a trend we have seen in many markets earlier. Take the UK.
In 1992, the radio market there accounted for only 2 per cent of overall ad spends; today, it is more than 7 per cent. It was the same in South Africa. Until 1995 the [radio] market accounted for 2 per cent [of overall ad spends] and now, post liberalisation of policies, it accounts for 11 per cent.
So typically what happens is once the radio industry opens, there are more players, more diversity and segmentation. Newer players and better segmentation will attract advertisers and the industry will flourish.
What decides the success of a radio channel?
According to me, consistency is one of the most important aspects. You have to be consistent with what you play, you must continuously attempt to improve your performance and lastly, you must remember that it is the audience you are trying to satisfy and not yourself.
Remember, this is an audience that does not pay to listen to you, which means its loyalty is very fragile. Radio Mirchi in India is a good example -- it seems to be consistent and also gives the impression of being a channel that's always looking to improve.
On the other hand, Capital Radio, one of the most iconic radio stations in the world, has lost its way in the UK because it changed, adjusted and altered its programming too often.
How will your arrangement with your local partner
We have a lot of experience in this medium. But to open or run a business here, we need to understand the local ways. We will bring to the table product knowledge and guidance on branding, promotions and building a personality, which is crucial to the success of a radio station.
We will rely on our partner to help us with knowledge and information on local tastes, likes and dislikes, while we will help in areas like programming and research activities.
Many channels came and went after the first round of restructuring. The existing players in the metros are now well-entrenched. How will you stand out?
There cannot be one single point of difference. We will do a multitude of things differently, which will add up to give us a personality, spirit and attitude, and be different from other stations. What sets apart a radio station is not the name or logo; it's the channel's personality that has to be different. And how do we plan to achieve that? We are relying on research.
What kind of research?
We spent most of 2006 doing research. We did perception studies and focus group studies on thousands of people in metros to understand their preferences not just on radio channels but on music, on thousands of songs and genres.
You may ask me, aren't other companies doing research? Perhaps they are. But are they as obsessive as us? Probably, no. Can they be as obsessive? Probably, yes. Do they wish to be? Probably, no.
Besides, banking on research as a strategy has worked for us earlier. Take Thailand, for instance. There were 41 stations in Bangkok before we launched and 10-15 of these were really good stations. But many stations appeared to be doing the same things.
We did similar research there, found an opportunity and made ourselves different. But it was not driven by the need to be different: we were different because of our regular research. We were a station that played what the consumer wanted to hear.
What is your communication strategy?
We are targeting men and women between 25 and 34 years, from Secs A and B. Research shows consumers do not wish to hear silly jokes, recipes or agony aunts. So that's the brand promise we are offering. There will be other things, but they will have to be around music.
If someone tells me he has a 2-minute take on astrology that is really funny, I may say OK if it's really funny we can put it behind a commercial. But if someone were to say I would like to run a half-hour programme on astrology, I don't want to listen any further.
We have print, outdoors and on-ground activities communicating exactly this. For instance, we had about 50 men dressed as clowns walking on the streets of Mumbai carrying banners saying "No silly jokes, only music".
