“We will renew thrust on strategic alliances”

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: In a country like India where people are used to listening to radio for free, WorldSpace, the satellite-based digital radio services provider, has a paid subscription base of over 1.64 lakh. The company entered India in 2005—wobbly on its feet. Today, the network has 40 radio stations playing the widest possible variety of music. Harshad Jain, the company’s chief marketing officer, and the man at the helm of its growth strategy, tells FE’s Pritha Mitra Dasgupta what it takes to build a paid radio station in India.

You started off in 2005. How difficult it is to establish a satellite radio station vis-à-vis terrestrial radio?

The biggest challenge we faced was to create awareness for the product offering. Satellite radio is a new category and we are the only player in the Indian market. A primary difference between terrestrial broadcasting and satellite radio is that satellite radio is not constricted to a geographical area. Thereby we are able to create truly national stations, which essentially means a Malayali living in Kochi or Mumbai can tune in to Malayalam music on RM radio and catch up with his kind of music. This also means a British citizen living in Delhi can tune in BBC World Service on WorldSpace and get the news from his broadcaster. On a programming level, satellite radio has the ability to offer more channels and provide niche programmes.

WorldSpace had a staggered opening in India. Today its subscription base is over 1.64 lakh. In a country where people listen to radio for free, how did you log such a growth?

Radio has been the most cost-effective source of entertainment in India for a long time. India’s radio industry is projected to post a healthy growth of 32% over the next few years to touch Rs12 billion (nearly $270 million) in revenues by 2010 on the back of a robust economy and easing of stiff investment rules.

In the past few years we have expanded our retail presence and offer a choice of over 40 stations playing the widest choice of music, entertainment and information, which can be accessed from anywhere in the country.

Our target audience is wide—from teenagers, to middle-aged, to senior citizens. The growth is a result of a sustained campaign that involves consumer education and trial initiation, below-the-line activities, retail network expansion and a host of experiential marketing strategies. An aggressive product strategy also helped bring more people into our subscriber base. Music lovers still find a dearth of variety in the Indian radio space, to which we offer an effective solution.

In these three years what, according to you, has been the biggest turning point for the company?

We are living in an age of media explosion. Traditional media are undergoing phenomenal changes and the entry of digital, online and ‘new media’ is accelerating this growth at an exponential speed. Not only is this a global phenomenon but closer home, the Indian media and entertainment industry is expected to grow at an 18% compound annual growth rate and reach an overall value of $22 billion by 2011 from its present size of $9.7 billion. (Source: a PwC report for Ficci).

Talking of music consumption, greater accessibility has pushed the industry to the next level. Whether it is the traditional notion of turning on the radio or downloading your favorite music to a personal gizmo (iPod, cell phone etc) the consumer enjoys a plethora of choice. International music trends are making their presence felt even in the tier-2 markets in India. Another trend, albeit less talked about, is the health and wellness awareness influencing the music consumption.

Analysts say that WorldSpace is still far behind competition because of its subscription-driven model. What is your take on that?

On the contrary, satellite radio has been acknowledged as one of the fastest growing offering in this space. This is borne out by the fact that in the US alone there are over 10 million subscribers of satellite radio services, despite there being hundreds of FM stations. Being the pioneer, our strategy is to ensure our target has the right association with our offering. We plan to increase our visibility with marketing and outreach efforts besides certain cost-effective partnerships.

There are no conventional ads on WorldSpace radio. How long do you think you can sustain growth without advertising revenue?

We don’t have any plans of selling ads on WorldSpace radio. WorldSpace garners revenues from consumer subscription fees, sales of equipment, provision of certain services to governments, leasing satellite capacity and other items, including technology licensing.

The co-branded association with the movie Lage Raho Munnabhai was a huge success. Are you looking at similar associations in future?

Lage Raho Munnabhai had a great script and was a lesson in how marketers can use films to create a positive buzz for their brands. WorldSpace was part of the story-telling; we were ‘in script’. The result, of course, was that our brand awareness increased and sales in smaller towns, such as Indore and Baroda, increased notably. Our endeavour is to constantly explore opportunities where WorldSpace can be an integral part of the script and not merely a product placement.

Has your marketing strategy changed from the days when the task was more missionary in nature?

In 2005, when we launched, we introduced niche regional content. The idea was to reach out to all consumer segments. We kicked off the AR Rahman campaign. Another strategy was to also give the consumer an opportunity to touch and feel the product through kiosks and lounges set up across the country.

The second stage of our marketing efforts focused on creating distinction. While the earlier Rahman campaign captured the width of WorldSpace, the next one focused on the depth. We also made significant strides with our strategic alliances with brands such as Café Coffee Day and Barista.

The current marketing campaign focuses on broad-basing. We will focus our efforts in taking WorldSpace to tier-2 or class-B cities, where they have limited entertainment avenues. This year, we will also build momentum in the area of commercial broadcasting. Last year, our music were made available online via a strategic alliance with MSN. We will seek such strategic alliances this year too.

Where do you have the maximum subscription base? Which are relatively weaker?

WorldSpace was launched in Bangalore; hence the awareness level and adoption is probably highest in this market and other southern markets. Metro markets like Delhi and Mumbai have also shown a high level of traction.

I would say the east and central India present an unexplored, untapped future opportunity.

What is your growth rate in smaller, tier-2 cities?

Earlier, our strategy was to achieve growth in the top-10-city category before extending our retail network. Today we have posted over 50% growth in tier-2 markets, such as Cochin, Pune, Chandigarh, Ahmedabad, Trivandrum, Surat, Nagpur, Dehradun, Jaipur, Baroda, Amritsar, Ludhiana, Jalandhar, Mangalore, Indore and Goa.

Going forward, what is the road map for WorldSpace in India?