Riding the radio wave

In an exclusive interview with Vibhuti Arora, ARN’s head honchos Mahmoud Al Rasheed and Steve Smith elaborate on how multiplatform technology is driving radio and what makes it unique in the UAE

The various radio stations based in the UAE broadcast in a variety of languages to cater to the unique demographic segments in the country. This makes radio in the UAE quite diverse. While in many international markets, radio has suffered a decline in revenues as a result of the shift of consumers to digital platforms, it remains resilient in the face of digital migration and economic challenges in the Arab world. In fact, according to Arab Media Outlook, radio is the fastest-growing advertising platform after digital.

Radio’s inherent capacity to adapt is the main reason for its success, says Mahmoud Al Rasheed, General Manager at Arabian Radio Network (ARN).

“The dynamics of each market vary. The UAE runs on cars; everyone drives here and people look for a very personalised experience in their cars, which radio provides. Moreover, for advertisers, radio offers a cost-effective platform for advertising. The sector is booming at a time when leading advertisers have slashed their overall advertising spend but increased the share for radio. At ARN, we are conscious of this and have used these factors to our advantage, creating a thriving bouquet of stations that cater to the diverse demography of the UAE.”

He also points out that ARN has embraced the change and has evolved in the wake of online offerings, and now features a host of digital services to stay ahead of the curve.

“We have transitioned from traditional to multiplatform in the last few years. This transition has been organic and gradual. We are in a constant state of change and adapting to the ever-changing technology.”

The radio network’s Chief Operating Officer, Steve Smith, explains that he doesn’t consider himself to be in radio anymore, but rather in the business of multiplatform content creation.

“Content that’s going out is not necessarily audio these days; it can be video, and content especially tailored for social media. These new platforms, be it social media or our apps, enable us to engage with our listeners at a lot of different levels. Smartphone technology is charging this revolution.”

In fact, radio has adapted better than other media because of its ability to move fast, he points out.

Radio in this market is bigger than Facebook and even print media. The UAE is home to more than 40 radio stations with a diverse mix of genre and content. As the largest radio network in the UAE, with nine channels and 3.2 million daily listeners, ARN has been constantly pushing the envelope in terms of both technology and content to stay ahead in the game, claims Smith.

The radio network has been making the transition to digital for over five years now, and has trained and enabled its teams both on- and off-air to deliver content across multiple platforms.

All of the station’s FM radio stations are fully multiplatform, with content accessible online and via smartphone apps, and the ARN websites are strongly promoted on the radio stations. Online streaming and apps are complemented and enhanced by blogging, podcasting and active social media.

Smith gives an example of the ARN content circle, to show how radio is seamlessly integrating with new media.

“If you listen to a radio channel in the morning, we encourage our listeners to watch the video that we have posted on social media, connect back and share it, like it, share it across different social media platforms, where the content gets more exposure, encouraging the audience to listen again. This is how we expand our content circle, constantly engaging with the audience and giving them what they want,” he explains, citing a recent competition for a house in Kerala as a prize on ARN’s Malayalam channel that received 8.5m SMS messages in three weeks.

From a strategic point of view, smartphone is a game-changer according to Smith, and it’s time that content creators realised that. The UAE has the highest usage level of smartphones in the world, with 250% penetration.

“In this environment, our consumers are obsessed with smartphones. I call us the ‘look down’ generation, where people constantly look down at their phones. Five years ago, we invested close to a million dollars to develop world-standard apps, which is reaping benefits today.”

There has been a massive surge in mobile listenership in non-traditional times for the network’s various stations – the most listened-to time via the apps is 3:20pm – and traditional terrestrial peak time is also growing, opening a new window of opportunity to advertisers, who can pitch their wares from the start of the day to the end.

With the smartphone revolution, ARN’s focus is now on its apps and seeking more user engagement through them. The ARN apps are not just about streaming terrestrial content, they are now the network’s messaging service as well, and are used to interact with the studio. In fact, the recently launched free messaging service is the first in the world, claims the network.

“Video is becoming such a massive component of our content. When Kris Fade (an RJ at Virgin radio) does something, listeners want to know and they engage with him on social media and through our apps,” says Smith.

While the network’s digital offerings are generating a lot of interest, its traditional broadcast infrastructure is updated from time to time to offer quality products to its core listeners.

ARN’s main transmitters are from Rhode and Schwarz and are housed in Al Mass Tower in Jumeirah Lakes Towers in Dubai. An upgrade of the backup transmitters at Dubai’s Emirates Towers is currently underway. These are new-generation transmitters with a liquid cooling system.

In the studios, two types of mixers from Studer 2500 and 2000 and Aeon Klotz are deployed. The network’s stations are built on RCS software Zetta for digital radio automation.

“The hardware doesn’t change, but its usage level does. Manufacturers come to us to share their R&D, so we are involved from the time they develop their equipment. We are the first in the region to use Zetta, and among the first few in the world. Zetta can be configured on a single computer running multiple stations or on a large network running hundreds of stations,” points out Al Rasheed.

In-car innovation is yet another technological advancement. ARN is involved in numerous conversations with car manufacturers, dealers and distributors about how to get more interactive inside the car, without leaving the steering wheel.

The connected car solutions can be divided into two camps, Al Rasheed explains.

Built-in-the-car manufacturers such as Honda and Toyota are developing in-dash solutions. In fact, any car built after 2010 has connected car features built-in as standard, even if that is only Bluetooth for automatic smartphone integration. The other way is installing the system with a number of plug-in systems available in the market.

“That’s the edge radio has over other media. You cannot watch TV while driving, but you can listen to the radio,” reiterates Al Rasheed.

Radio is the fourth most prominent advertising platform after newspapers, TV and outdoor advertising in the UAE. Even when TV and print declined in 2009 due to global recession, radio revenues continued to rise.

In the UAE, the cost of placing a 30-second spot at peak-time on radio is a thirtieth of what it would be on TV. Radio dominates and is highly cost-effective.

“TV is generally a pan-Arab sell and radio’s strength is very much local. Again, the cost of production for TV is comparatively much higher,” says Smith.

For a brand wanting a high-reach, high-frequency campaign, a peak-time spot schedule spanning three months costs $60,000 – 100,000. Radio campaigns tend to work more effectively with consistent, longer schedules.

“Radio revenue is growing very fast here. Compared to newspaper or TV, radio gives frequency and it’s more effective. Radio is ideal for companies who have reduced their marketing budgets. Many companies have changed their strategy and are looking to invest more in radio and digital. The beauty of a network like ours is we can give you solutions that are traditional radio, non-traditional radio, digital as well as social media,” points out Al Rasheed.

Each station under the ARN umbrella has its own target audience. Smith says that ARN’s biggest revenue churner is Virgin, followed by City 101.6. Its Khaleeji station plays only GCC music and has a huge fan following, while the Arabiya channel plays expat Arabic music.

“Virgin and City are close, while our Arabic brands are gaining much more traction from a commercial point of view. Tag 91.1 is the latest addition to our stable and is growing fast. From a revenue and commercial point of view, it has performed extremely well,” Smith explains.

While radio gets $140 million of advertising revenue in the UAE, Smith says.

“I believe radio is getting way below its worth. In mature markets, it sits around 9-12% of total ad revenue. Here we are around 5-6% but the potential is massive. In the last two to three years, that 2% has grown,” he adds.

Al Rasheed points out that radio advertising used to be less than 3% a few years ago.

“The market was underestimating the potential of radio, but in the last couple of years things have changed, and we have noticed a heightened interest in radio,” Al Rasheed adds.

The contributing factors have been engaging content and technology. Radio will continue to grow here because of the local component, small bandwidth and cost-effectiveness. Being more mobile than other media also works in its favour.

Sceptics predicted the demise of radio when cassettes and CDs came, but the medium emerged even stronger. It has withstood the advent of the iPod and the smartphone. Technology that was seen as a threat to radio has in fact improved it. With streaming services becoming popular, does radio need to worry?

“The likes of Pandora, Spotify, iHeart, Apple Music offer amazing technology that delivers very good products, but they are not local and don’t have the finger on the pulse of the community right here in the UAE,” says Smith.

These services are not free, as they involve mobile data and a subscription fee, adds Al Rasheed.

Radio scores for its focus on local content. In-car listenership takes the largest share of the radio pie. For a network to be successful, it needs to evolve and adapt to change, offer compelling content and keep a finger on the pulse of the listeners.

Commenting on the challenges in the local market, Smith points out that the industry needs a “robust data system to understand who is listening”.

“There are some issues we can solve together as an industry such as a reliable ratings method. To do that, we talk regularly with our competitors and cooperate as an industry,” he concludes.