Broadcaster SCA is concentrating on its audio business as regional television markets drag on the company’s profitability.
CEO John Kelly, addressing shareholders at his first AGM, says the company didn’t achieve revenue and profitability targets in the 2023 financial year.
Full year revenue fell 3.7% to $505.6 million and net profit after tax was down 20% to $21.9 million.
And challenging conditions continue this financial year, with the market “short and inconsistent”.
However, broadcast radio revenues remain steady and are tracking in line with last year.
And digital audio revenue continues to perform strongly and ahead of industry peers.
He confirmed the forecast for the app LiSTNR to reach EBITDA (earnings before interest, taxes, depreciation, and amortisation) breakeven run rate in the June quarter 2014.
However, regional television operations "dragged on our results" in the most recent financial year.
Kelly says audiences for broadcast television are in long term decline with viewers migrating to digital consumption, including the BVOD offerings of metropolitan program suppliers.
“Advertising markets for broadcast television are declining in parallel and, in our case, this decline has been exacerbated by comparatively softer ratings performance by Network 10 programming and our regional television competitors having more unified sales processes,” says Kelly.
“Our television sales teams did well to achieve a parity sales-to-ratings power ratio in our Network 10 markets in the most recent financial year.
“We are in active discussions with Network 10 to extend our affiliation beyond December 31, and to streamline our collective offering to media agencies and national advertisers with a view to stabilising returns to SCA and our shareholders.”
Kelly says SCA’s future is all about audio.
“This includes broadcast and live streamed radio, music streaming, live sport, and on-demand podcasts,” he says.
“Radio is alive and well, and our radio shows continue to provide large and engaged audiences for our advertisers’ commercial messages.”
A Deloitte Access Economics report in August this year found that 17 million Australians listen to commercial radio.
The 2023 Infinite Dial Australia study found that 81% of Australians aged 12 or older listen to digital radio monthly, including live radio as well as catch-up podcasts of radio shows.
"Our audiences increasingly are choosing to enjoy our radio shows on digital devices – mobile phones, tablets, laptops and desktop computers, smart speakers, and car dashboards – and many of our listeners are choosing to listen to a podcast or watch highlights on social media of our radio shows at a time and place that suits them," says Kelly.
"To meet this demand, our radio teams think digital first, so our radio shows can continue to grow and engage our audiences on the platforms our audiences prefer."
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