Metro radio market subdued, but CEO Blackley remains confident

Pippa Chambers
By Pippa Chambers | 25 October 2017
Grant Blackley at Radio Alive 2017

Australian radio network Southern Cross Austereo (SCA) saw metropolitan radio revenue drop 6% in the first quarter compared to the same period last year.

The results, for stations such as the Hit Network and Triple M, were discussed at its annual general meeting yesterday.

Total revenue for the first quarter was down 2% on the prior year and on a reported basis revenues were down 7% across the period.

“It has been well documented that a number of sectors of the Australian media industry are subject to challenging trading environments,” SCA CEO Grant Blackley said.

“In SCA’s case, while July and August were difficult, we saw improved conditions in September which have continued into the second quarter.

“In a metropolitan radio market that has been subdued but showing signs of improvement, SCA’s revenue for metropolitan radio for the first quarter is back 6% compared to the first quarter of 2016.”

Blackley explained how the dips in revenue in those areas contrast with SCA’s performance in its regional markets.

Revenue for SCA’s regional radio business for the first quarter continued to grow, improving by 2%.

In regard to regional television SCA grew revenue by 3.5%, on a like for like basis with prior year comparatives excluding the revenues earned from its recently divested NNSW TV business.

“Despite the challenging trading conditions, SCA is well placed for the future,” Blackley said.

“SCA is committed to being an entertainment company that will build on its core competencies as a truly national business, reaching 95% of Australia’s population, offering strong unique brands and unparalleled localism.”

Media reform moves - both opportunity and a challenge

SCA chairman Peter Bush said SCA enjoying success this year in attracting a higher proportion of advertising dollars to regional Australia, after a concerted and targeted strategy. He adds that a core element of the company’s strategy is to maintain and benefit from its broad reach and emphasis on localism.

He touched on media reform saying the relief from broadcasting licence fees “finally approved” by parliament is much welcomed.

“We’re also pleased that media ownership legislation has been amended to remove the reach rule and the two out of three rule,” Bush said.

“Removal of these outdated rules creates both opportunity and challenge for Southern Cross Austereo. Shareholders should be assured that your board and management have a clear understanding of the available strategic options in order to secure and optimise the company’s future position.”

Bets are on digital radio and podcasts

Predominantly focused on audio, Blackley said SCA will optimise those assets by continuing to develop its national Hit and Triple M brands, “by extending audience reach” through digital radio assets and building its library of original audio-on-demand content for PodcastOne.

Last month AdNews reported how the podcast punch out was well and truly on with SCA pulling out all the stops at its official PodcastOne launch last night on 14 September. Hours before SCA's big launch its rival Australian Radio Network (ARN) fired out news of its new venture with podcast platform Whooshkaa.

Earlier in September Nova Entertainment got in on the action and upped its focus on podcasting by becoming the exclusive sales house for all podcast inventory hosted on tech platform Acast in Australia.

At the AGM Blackley said SCA aims to increase its understanding and monetisation of audiences through data; will focus on improving audience measurement tools and insights will provide “further confidence to advertisers around the return on investment” from its assets.

See: It's no phase; podcasts on same trajectory as SVODs says SCA CEO

“We will also continue to invest in our sales platforms to increase the automation of sales trading and to improve the ease of doing business with SCA,” he added.

“Finally, we will continue to explore adjacent markets to find opportunities that complement our existing asset set and which fit with our core competencies.

In summary, as the chairman has referenced this has been another strong year of growth for SCA and we have put in place a clear strategic plan to grow our existing business and develop new avenues of growth to take advantage of the opportunities that improving technology provides.”

Earlier this month Australian Radio Network's (ARN) Kiis Network drive hosts Dave ‘Hughesy’ Hughes and Kate Langbroek moved to rival radio group SCA's Hit Network - filling the gap set to be left by long-standing drive hosts Hamish & Andy.

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