Credit: Jennie Razumnaya via Unsplash
ASX-listed traditional media companies operating in Australia, excluding global player News Corp, have a cautious outlook for the advertising market in 2026.
Executives point to digital growth and cost discipline, and cuts, to offset weakness in the advertising market.
Results from Nine Entertainment, ARN Media, oOh!media and the newly merged Southern Cross Media Group (SCA adding in Seven West) showed near-term trading conditions staying soft.
Improvement is expected to be gradual and more weighted to the second half of the year.
Market analysts see the ad market in a "challenging" position in Australia, now in a interest rate hike cycle and economic issues from war in the Middle East. Nine and SCA also have a structural issue with television.
"The risk to earnings ... continues to be broadcast, which is still in structural decline, and as such cost-out must continue," analysts at Macquarie wrote in a note to clients
"We have become more cautious on near-term stabilisation of the ad market and timing a return to growth, as the RBA seems likely to make multiple rate hikes in this cycle, impacted by Middle East conflict and with inflation already at +3.7% yoy in February."
Southern Cross interim executive chairman Heith Mackay-Cruise has described the current market as "a frustrating economic and advertising environment”.
The biggest player, Nine, is guiding to broadly flat total television revenue in the current March quarter, with streaming platform 9Now expected to grow advertising revenue in the "low-to-mid teens”.
Chief executive Matt Stanton said the company had started the year "on a more positive note operationally" but declined to give specific guidance, describing last year's July quarter as "very choppy”.
"There was a lot of election money went into April, but then May and June came off a lot," Stanton said. "It's just a bit short for us to say at the moment."
Stan delivered a record $37 million EBITDA in the December half, up 24%, with around 2.4 million paying subscribers.
Nine is projecting that growth assets — Stan, 9Now and digital publishing — will account for 60% of revenue and nearly 70% of EBITDA by the 2027 financial year.
Stanton also flagged a new revenue stream in AI content licensing, saying Nine had signed two Australian corporates to feed its journalism into proprietary enterprise AI systems.
"There are a lot more opportunities to come," he said.
ARN Media is guiding to a broadly flat total audio market, with low single-digit radio declines expected to be offset by digital audio revenue growth in the mid-teens.
Chief executive Michael Stephenson said metro radio share would improve through the year but cautioned the gains would be "more back-weighted than front-weighted" as the company cycles through the challenges of 2025, when metro broadcast revenue fell 16%.
"There's obviously no doubt that the ad market was challenged in 25," Stephenson said.
"We saw the impact of the broader economy, the impact of inflationary pressure on household budgets and of course the broader geopolitical landscape, all impacting markets."
Regional radio, where revenue fell just 1% against the 16% metro decline, is expected to remain broadly flat. Digital audio revenue, now 10% of group revenue, is projected to grow in the mid-teens.
Stephenson pointed to the company's 10-year renewal of its iHeart partnership as central to its digital transformation, giving ARN access to global product and development capability "without the onerous capital cost that some others have."
oOh!media is pacing strongest of the four in the near term, with Australian March quarter revenue up 7% year on year. The group figure is plus 2%, dragged by the loss of the Auckland Transport contract.
New chief executive James Taylor, eight weeks into the role at the time of the results announcement, said the out-of-home category was expected to continue taking share from other media sectors.
"As a category leader, we're well positioned to benefit from these structural tailwinds," he said.
But Taylor also flagged execution problems. "In some areas, we've not been executing well enough and we've not been moving fast enough for our customers," he said.
"Legacy systems and navigating the size of our network has held us back and has contributed to our ceding market share in CY26."
The retail channel is "performing below our expectations," Taylor said, citing competitive pressure in the FMCG space.
He pointed to the March launch of MOVE 2.0, the new industry audience measurement system, as the key catalyst for unlocking retail and office channel revenue.
Taylor was cautious on the coming June quarter. "I'd remind you that the second quarter last year was historically high," he said.
"We're confident in Q1. We come into the year with some strong momentum — we took share in both December and January."
Full-year operating expenditure is guided broadly flat.
Southern Cross is the only one of the four to issue explicit full-year guidance and the range signals a step back before synergies flow through.
The group is targeting revenue of $1.91-$1.92 billion, costs of $1.7 billion, and EBITDA of $200-$220 million, compared with $233 million on a pro forma basis last financial year.
March quarter audio revenue is expected to be broadly flat, with January coming in at plus 4% year on year.
Total TV revenue is expected to be down 2 to -3%, with revenue share flat.
Strong growth in digital is offsetting the ongoing challenges in regional radio's national bookings, the company said.
Audio chief executive John Kelly said the merger created cross-promotion opportunities that neither business could previously access, pointing to Seven Plus's 15 million signed-up viewers as a potential distribution channel for LiSTNR's 2.5 million users.
"We're very excited about using Seven Plus as potentially our video distribution tool moving forward," Kelly said.
The group has identified $20 million in new television cost initiatives for the current half and is targeting at least $30 million in merger synergies by FY27. Net debt of $338.2 million at December is being prioritised over dividend payments, with resumption contingent on leverage falling below 1.5 times.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.