Grant Blackley on SCA’s metro growth, 2DayFM Breakfast & maturing DAB assets
Southern Cross Austereo has released its financial year results for 2018/19, and despite an increase of 0.5% in overall group revenue, the company reported a net annual loss of $91.3 million.
Underlying EBITDA grew 0.9%. SCA reflected that this was an expected result in a challenging media advertising environment.
Although the overall result was disappointing, SCA’s audio segment delivered promising results, with a 2.4% increase $453.4 million (that figure combines metro, regional and podcasting).
Audio segment underlying EBITDA was also up, rising 3.4% to $153.7 million, with national advertiser growth up 9.2%.
SCA’s regional audio assets performed strongly, (up 1.5% or $2.7million), but it was the growth in metro that caught the eye.
Metro audio assets grew 4.1% to $9.4million.
When it came to metro performance in particular, SCA chief executive Grant Blackley told Radio Today there are three key factors underpinning this year’s performance.
“The first thing is a very consistent and solid performance across all of our FM brands,” he says.
“The second thing would be the continued maturity of our DAB brands, which are now interwoven across our entire radio platform.
“And the third thing is that we’ve had a very strong sales effort that actually has delivered four consecutive improvements in share of our metro market.
He also believes that SCA’s continued performance of regional audio assets is being maintained by initiatives like Boomtown, which aims to show advertisers the potential of regional radio marketing.
The disparity between metro and regional spend remains large, however.
“We have unashamedly focused on educating national advertisers to the value of regional communities,” says Blackley.
“So, the messages and the education we’re putting through is obviously resonating and I think it is starting to favour regional markets and they understand that.
“I think we can do this for a series of years before we ever get to having some sense of balance in the way in which money’s afforded between metro and regional.”
The extent to which podcasting revenue assist the growth in the audio segment is not entirely clear, with the only figures SCA reporting on podcasting being a 260% growth in audiences and revenue on the prior period.
Blackley explained that podcasting remaining part of the overall audio figures was something likely to continue.
I’m not sure if we’ll ever carve out individual products on the way through,” he says.
“We tend to group our broadcast linear assets and effectively what is an emerging on-demand platform to put it into one.
“What I can tell you is that we targeted a $5 million investment into PodcastOne, which we commenced that process two years ago, and we’ve deployed that across both an operating and capital expenditure level and that has been effectively on budget for that investment of 5 million.
SCA last week made the decision to change the underperforming Breakfast show at 2DayFM to a music-driven show.
Blackley says that the decision was just as much a product of how well their Workday music strategy was performing as anything else
“Clearly, we made a decision in Sydney to adopt a slightly different strategy,” admits Blackley.
“When you look at the performance of our music through the Workday over the last five-or-six years, there’s a very deep appreciation and acceptance of music as a core content contributor.
“It was very clear that we needed a step change in Sydney to try and breakthrough what our peers are doing. We have very strong and credible peers and we felt if we continued to do exactly the same thing, it may be more difficult to break through to get the result that we want to achieve.
While SCA’s major metro stations had few talent changes this year, Blackley was quick to shout out Triple M Sydney’s new Breakfast show.
“I love the Moonman!” he says enthusiastically.
“I think we were absolutely delighted with the performance of every new talent that we’ve put in. I think leading that has been Moonman in The Morning.
“Obviously, we changed from a heritage breakfast show on Triple M with The Grill Team. It is, in our opinion, was too narrowly focused and that was both at a talent and music level.
“We’ve broadened both of those and what we’ve seen is four consecutive survey improvements.
Coupled with that, we’ve also made changes around some of the other markets as well and we are delighted with just about every one of those moves we’ve made.
And despite the radio market struggling overall, Blackley is maintaining a positive view looking into the future.
“I think the beauty of the audio landscape is it is not only resilient, but it is in fact growing. And I think it’s incumbent upon companies like ours and our peers to continually develop new audio products in the market that are compelling, sustainable and monetisable.”