Australian firm seeks to cash in on market for traffic information

Australian firm seeks to cash in on market for traffic information
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First Published: Wed, Mar 05 2008. 12 04 AM IST

Question of viability: Prashant Pandey, CEO of Radio Mirchi, says since most radio broadcasters coordinate with police authorities for traffic updates, they may not be keen on a third party selling in
Question of viability: Prashant Pandey, CEO of Radio Mirchi, says since most radio broadcasters coordinate with police authorities for traffic updates, they may not be keen on a third party selling in
Updated: Wed, Mar 05 2008. 12 04 AM IST
Mumbai: Imagine reliable traffic updates on radio, which may help you plan your rush-hour travel to the airport and avoid that unwanted fixture on the way — wasting time at snarl-ups.
Question of viability: Prashant Pandey, CEO of Radio Mirchi, says since most radio broadcasters coordinate with police authorities for traffic updates, they may not be keen on a third party selling inventory for them.
An Australian company is planning to employ helicopters and men at key points in Indian cities to provide reliable traffic information and is in talks with several radio stations to air the same.
The company, International Traffic Network Pty Ltd, wants to offer the updates free of cost to radio stations, provided it gets the right to sell the related ad inventory, said two radio executives who are aware of the development.
It is also looking at some working alliance with the Indian police to provide them with updates, added the executives.
When contacted by telephone, Michael Paul, chief executive officer of International Traffic Network, did not deny that the company was looking to enter the Indian market, but said he was travelling and would provide detailed information later.
Paul had left his job as an executive with the Australian Traffic Network in Japan in 2001 to set up what he calls a traffic media technical consulting business for radio.
The entry of an international specialist promises to bring order to the content and tune in another advertising potential.
In India, traffic updates have generally been prepared by radio stations themselves and presented as a value-added service to advertisers, who get ad time during the slot at very low rates or are even free, say media buyers.
The big test for International Traffic Network would be to add value to a property as under-rated as traffic updates. The company would seek to attract big-spend advertisers to sponsor these updates or advertise on them, offering them the prospect of reaching an upmarket captive audience who has nothing else to do in a traffic snarl.
According to media buyers, radio advertising occupies only Rs500 crore of the total Rs16,000 crore ad market and that on traffic updates makes up barely 1% of the radio ad spend. The growth potential is hence huge.
Media specialist Shashi Sinha, chief executive of Lodestar Universal, IPG Group, however feels that ad takings linked to traffic updates are a pittance. “I don’t think that it’s going to make sense for any new company to cash in on it. It might work differently overseas.”
Some radio operators also say they need to see how ad revenues would be divided before agreeing to an outsider taking charge of this revenue stream.
International Traffic Network’s operation is similar to that of traffic incident gathering and reporting companies such as Australian Traffic Network, which supplies traffic reports to major television networks in Australia’s metropolitan areas as well as to a vast network of radio stations in both metropolitan areas and their outlying regional areas.
“International Traffic Network will set up a complex system of stringers, helicopters, etc. to monitor the traffic updates across cities,” a leading radio broadcaster, who does not wish to be identified, said.
Radio stations can, however, package content related to updates the way they want.
There may be stations that insist on revenue sharing, and pre-empting such a scenario International Traffic Network has a solution. The firm offers radio stations the option of entering into a revenue-sharing deal for the sponsor’s ‘tagline’ that precedes the traffic update, but the signing off would be the exclusive domain of International Traffic Network.
Prashant Pandey, chief executive, Radio Mirchi, Entertainment Network (India) Ltd, says most of the big radio broadcasters have six-month deals with advertisers for traffic updates. And since they have their own stringers or employees at major junctions in cities, and since they also coordinate with police authorities for traffic updates, they may not be keen on a third party selling inventory for them.
Says Pandey, “There is no doubt that such information would be a value-addition for listeners. But how viable is it? I think that it has more of a chance of working if the company offers such kind of service at a small fee, than a revenue-sharing or third-party selling model.”
Tarun Katial, chief operating officer at BIG 92.7 FM, says acceptance of such new-generation services depends on whether they are a marked improvement over current systems owned by radio broadcasters and whether they come at a viable cost.
Cellular service operators could also benefit from these updates. For example, traffic updates on key city junctions via SMS.
Abdul Khan, head of marketing at Tata Teleservices Ltd, says that telecom operators would be eager to cash in on such a service. “Frankly, anybody would be interested. You are giving a value offering to your consumer and empowering him, since traffic remains a very prominent and unwanted fixture in most people’s lives. But there are other things to be considered…how expensive are they? What zones do they cover? How many helicopters? What kind of sophisticated systems will they bring?”
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First Published: Wed, Mar 05 2008. 12 04 AM IST