Tuned In

When was Grupo Formula established?

We’ve been around for 80 years, and we were founded in Mexico City. We started with radio stations, which remains our main business to this day. We began with one station back then, and today we have 45 FM and AM stations all over Mexico, as well as stations in the US. We also have a TV channel. Grupo Formula has another company called Mobiliario Urbano (phone booths), which is an outdoor billboard and advertising business. We do this in Mexico City, Cancún, and Acapulco, and will eventually do so in Querétaro. We are aiming for over 2,000 phone booths by next year. We also launched our TV and radio signal in the US, on Comcast and Time Warner on cable, as well as on the Sirius satellite system. We are in the business of marketing. Grupo Formula has grown a lot, especially over the last decade. You have to keep investing and growing in this business, otherwise you’re out.

How challenging is competition within the industry?

In TV, we have only one channel and we don’t compete with the likes of Televisa. In radio, on the other hand, we are 100% talk radio, whereas most of the other radio stations are music radio. We have different 24-hour schedules on different stations in which we are unique, so that is tough. I have to determine what programs go where, what themes, and what topics for all those stations. We are our own main competitor. Music radio stations, on the other hand, have to compete with iPods, internet downloads, and CDs, not to mention each other, because there’s so many of them. Music radio stations have much more competition than we do.

Where do you see the most growth potential?

Our listeners are looking for more than just news; they’re looking for entertainment. News is pretty much the same morning to night. We want to entertain our listeners with different styles of news and programming. We try to keep it lighter, whether it is politics or finance. Our listeners are generally more educated than music listeners. In the US, we have a potential of up to 30 million listeners; however, it’s hard to determine exactly how many people listen into our stations. Also, you have to keep track of young listeners. More and more of them are interested in the news, politics, and global affairs as well as culture, arts, and of course sports. Family issues are also important topics. It is important to keep a balance between all that.

Does piracy still pose a bit threat to the industry?

Not really; however, there’s a problem with pirate radio in the south. In Mexico, there are two types of radio stations: the ones that receive government concessions, which are commercial stations, and the ones that receive permission. With the former, you can sell commercial time. With the latter, you can only broadcast cultural programs, music, and indigenous language teachings, for example. The government gives permits to those stations based on the provison that no commercial activity takes place. However, in the south, those “permitted” stations are sometimes used for commercial activity, so that’s where the piracy problem comes in there. Generally, piracy isn’t a big problem for us though.

How much have you been investing in developing your infrastructure?

Our infrastructure is very sophisticated. We can broadcast and sell all over Mexico, as well as in the US. We have 45 different markets, one for each station. In each market, depending on the region or city, those stations can create local programming. For example, the station in Guadalajara or the one in San Antonio, Texas gives local news and focuses on local topics and issues. It’s complicated to control and coordinate all those programs from Mexico City. In music, on the other hand, you just have to know what segment of the population you appeal to and play the same music, whether here or in the US.

How have you been developing your advertising platforms, and what is your growth strategy?

We are still focused on radio for now, but it’s growing a lot more on the internet. We have another company, a below the line (BTL) company, which is a form of direct to the customer advertising. We have the opportunity to create intensive special campaigns that are undertaken through various media, including radio, TV, and the internet. These are mostly government campaigns. The BTL business is among the fastest growing markets in the country. We also need to invest in High Definition technology, and grow in terms of our satellite presence, both for radio and TV. We also want to set up more 24-hour stations in the US. To achieve this, we have to position ourselves in the main Spanish-speaking markets like Denver, California, North and South Carolina, Florida, and Texas. The way to grow is by having your own station there; however, it’s not cheap. We hope to open a station in Denver soon. We have another station in Los Angeles, and hopefully we’ll open another one there in the near future, because California is the main Spanish-speaking market in the US.

© The Business Year – December 2012