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ENIL- An overview - Views on News from Equitymaster
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  • Dec 14, 2007

    ENIL- An overview

    In this article, we shall provide an overview of ENIL, the leading FM radio station operator. ENIL owns and operates radio stations under the brand name 'Radio Mirchi' in India. It was the first private FM radio player in India and currently has a pan-India presence. It is also present in the Out of Home and Event Management businesses. ENIL is promoted by Bennett, Coleman & Co. Limited (BCCL) which is one of the largest media and entertainment companies in India, operating in various media segments such as print media and television broadcasting.

    Radio Business: The radio industry is projected to grow from the size of Rs. 5 bn in 2006 to Rs. 17 bn by 2011, implying a 28% CAGR over the next five years. ENIL currently operates radio stations under the brand name 'Radio Mirchi' in 25 cities, the key ones being the four metros and Bangalore, Hyderabad and Lucknow. It plans to launch radio stations in another seven cities by the end of this calendar year. ENIL is expanding its network by entering into marketing tie-ups with the Jagran group (8 stations), Gwalior Farms (1station) and Gupshup FM (1 station). In Delhi and Mumbai, Radio Mirchi is the clear market leader, capturing 5.9 m out of 11.2 m daily listeners. In Kolkata, Radio Mirchi has over 50% market share and is the second largest media vehicle after the leading Bengali daily.

    Programming content: The target listeners are primarily students, youth and young working adults. However, it focuses on different target groups during different parts of the day and its programming is customized to attract targeted listeners. For E.g.: In the time band of 11.00 a.m. to 2.00 p.m, its target listeners are housewives and the programming is customized accordingly. Its programming focus is on contemporary film music shows and celebrity interviews. ENIL has developed good relationships with the film industry in India helping it to have innovative and creative content. This helps Radio Mirchi to secure exclusive FM broadcasting rights of the music of leading films for up to two weeks after the initial release of the music. Inspite of being present in diverse regions of India, ENIL has been able to attract listeners everywhere and be the market leader as it has been able to customize its content to local tastes.

    Source of income: The major source of income for ENIL is advertisement revenues. The share of radio in the overall advertising pie at approximately 3% is much lower than various developed and developing countries worldwide. Globally, the share of radio in the advertising pie is around 5% in countries where the medium is still in a growth phase and around 10-12% of the advertising pie when the medium reaches a mature phase. Advertisement revenues depend on the GDP growth rate and the popularity of the radio stations. Since ENIL's radio stations dominate in the key markets, it is able to garner high advertisement revenues. Infact, in 2QFY08, ENIL captured a 50% overall share in the revenues of the radio industry. National as well as local advertisers from diverse sectors such as FMCG, banking and financial services, consumer durables, telecommunications, property and petroleum advertise on its radio stations.

    Out of Home Media: The OOH media space, according to the FICCI-PwC report, stands at Rs. 10 bn and is expected to grow at CAGR of 17% to reach Rs. 21.5 bn by 2011. ENIL is present in this business through its subsidiary Times OOH. Times OOH has acquired the advertising rights at Delhi International Airport and Mumbai International Airport. Both these airports cater to combined annual travelers of about 42 m, which constitutes around 51% of airport passenger traffic in India.

    Event management business: The event management business is carried on through '360 Degrees', which is part of ENIL's 100% subsidiary Alternate Brand Solutions Limited. It manages product launches, conferences and seminars, film award nights. It has managed the 51st 'Filmfare Awards' and 'Femina Miss India 2006' contest. There is increased focus on events and promotions due to high level of clutter in advertising, resulting in limited consumer attention. This is forcing marketers to seek and choose alternative mediums to enhance the effectiveness of their brand communication. Events are highly effective in this regard and are thus finding favor among brand owners. These drivers have contributed to the industry growing at over 18 % per annum.

    Thus, with a strong presence in all its key segments, we believe the company is well poised to cash in on the robust growth expected to occur in the Indian radio advertising and other related industries.



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