Grant Blackley on 2DayFM, remaining open to a future merger & the path to monetising PodcastOne
“We have made a concerted investment across the board with our programming and effectively we’ve put a lot of effort and focus on Sydney, particularly at the Hit Network and we’re starting to see some dividends paid from that,” Southern Cross Austereo’s Grant Blackley tells Radio Today.
Amidst the backdrop of a 12.8% drop in earnings and a 5.3% fall in revenue to $654.1m, SCA’s CEO is certain that there’s plenty to look forward to in the coming year, citing improving ratings and an improving overall market among other factors pointing towards a brighter outlook.
Yesterday’s end of financial year report suggested that the past year has been a period of transition, with one of those key transition areas obviously being 2DayFM Breakfast.
Chatting with Radio Today after the release of the report, Blackley reaffirmed that Sydney, and Breakfast in particular, are priority areas when it comes to content focus for the coming year and beyond.
Blackley also denies that the move to commercial-free mornings had any impact on the financial result, but suggests the move was a vital part of drawing attention to 2DayFM’s ‘More Music, More Variety’ music strategy, launched this year.
“The effective strategy for commercial-free morning is all about increased awareness and trial to the network given our music change,” he says.
“As we know, a fair bit of time was spent looking at a strategy that would take our music set up around about ten years from where it was and having a commercial free morning has actually cemented that in and given greater opportunity for people to sample.
“Our revenue is up and our revenue was up 8% in the fourth quarter in metro, and obviously, therefore, we’re starting to see early signs of monetization of the digital state, but it’s probably primarily being driven by the improved performance of the network.
“So, therefore, that’s just one part of a broader strategy to actually improve our overall worth and value and at the same time commercialise that.”
Thursday’s report also saw a turnaround in metro revenue for the second half of the financial year. Blackley cites strong audience growth as a key reason and believes a new combined FM and DAB strategy delivering will see that growth continue.
“So I think we have the backdrop of an improving market, we have improving ratings which are up about 5% and we’re also looking at an improved digital stack, which is the combined FM and DAB strategy delivering about 7% additional audience.
“So you’re actually seeing audiences up on SCA by about 12% against the backdrop of a healthy market the opportunity to commercialise that, bring more business, and be more competitive, is all with us now and that’s starting to monetise certainly through the fourth quarter and effectively is gathering pace as we go into the new fiscal year.”
The falls in earnings and revenue came despite an increase in regional radio revenue, up by 4.5%, a seventh consecutive year of growth. Blackley, who called out advertisers for their unwillingness to invest in regional assets earlier this year, says the trend is starting to turn, helping boost SCA’s already impressive regional numbers.
“This is our seventh year of consecutive growth in regional radio and I think it is very much a staple in the diet of Australian media,” he says.
“I have called out quite often and will continue to, the disparity between the level of investment in Metro versus the level of investment in regional assets.
“More broadly, that 9.1 million people live or work in regional Australia, they ultimately have about 36% of the buying power but national advertisers on average are affording about 9% of their money to this pretty important market.
“So we’ve been on a campaign to talk about the facts, talk about why there is a disparity in not investing at an equal level to what we see in metro and pleasingly in the last six months, we actually saw in regional radio 15% more revenue afforded to our assets, so it is working.
“I think advertisers are more than capable of having the conversation and investing more in regional assets, however, we have to create a stimulus for that, and the stimulus for that is education, it’s about telling facts, and it’s about meeting as many clients as we possibly can to have that conversation.
“Yeah, there’s disparity, it’s happened for many years, we have to address it, but in addressing it we have to educate and help people understand why they should be treating regional markets with a level of equality where they haven’t before.”
Both Thursday’s report and presentation pointed to the promising growth in SCA’s podcasting platform PodcastOne, and Blackley says that SCA is now on a clear path to monetising the platform.
“We’ve merged from, when we dropped the flag in August ’17, we moved from zero downloads to 45 million downloads and you’ve actually seen a hockey stick approach. We have built that through engagement with 45 original premium authors.
“We’re averaging about 1.5 million downloads per week at the moment. I see that purely by bringing on additional authors to that in a premium environment that we will continue to see monthly downloads increase and I think we’re at the early stages of that hockey stick.
“This has a world of opportunity moving forward and I think we’ll continue to mine a lot of that original product in the past 12 months because new people are joining the platforming or new people are finding PodcastOne. So, I think it has a bright future.
“We didn’t elect to monetize any part of Podcasting in the first six months, we then have built up a very small sales team, but now we’re starting to broaden that sales team. We’re starting to see a much clearer path to monetization of the assets so I think it will perform well on both a download and monetization part.”
Finally, Blackley tells us that he wasn’t surprised at the recent merger announcement between Nine and Fairfax. He also refused to rule out any hope of working with Fairfax and Nine in the future, but with the complication of the Macquarie Network in the mix, SCA’s chief is focussed on developing the core of SCA.
“We’re always open to those conversations but I don’t see anything in our immediate future that would change the direction nor strategy that we’re adopting,” he says.
“At this point in time, we’re really just trying to enhance the SCA business across our nation footprint.
“We must understand that as part of the assets for Nine Fairfax merger is Macquarie, and at this point in time, you can’t hold multiple licences in that so in the event Fairfax and Nine wish to engage in Southern Cross they would have to divest themselves of the Macquarie Network.
“I have no evidence that that is true nor their intention, so to be fair, we are continuing to craft our own future. We’re continuing to invest in all of our core assets and develop our core in the absence of corporate development at this point in time.”