Speaking to radioinfo after yesterday’s half year results announcement, HT&E CEO Ciaran Davis talked about the “healthy results” for the company in the past 6 months, as well as strategies for podcasting, streaming, CADA and the company’s new regional network, which was acquired at the beginning of the reporting period.

ARN Regional Business

“When we bought the Grant Broadcasters regional business we were very determined to make sure that the strong performances prior to being acquired was maintained after we took ownership. I’m delighted that that has happened and it has been improved even further thanks to our ownership. We’ve expanded margins and  revenues, local revenues are going really well. We’ve had some great recent results in some of the key markets.

“The integration in terms of milestones and processes of people and systems is ahead of schedule. All in all, it’s been a very, very healthy six months for the business, both from a logistical organization perspective, but also bottom line.”

radioinfo: Is the growth taking radio revenue from other competitors or is it new growth that’s coming from non-radio sectors of the regional market?

“I think it’s new growth coming through. If you look at some of our competitors and their performance regionally, it’s pretty good, pretty stable. I think we have injected new ideas, new ways of working, new commercial opportunities into the business that’s growing the overall pie.”

Davis sees the success of the regional business as good for the industry as a whole. “I think that the is working together, collaborating for the greater good, because our challenge is not against Nova, SCA or anybody else, although we do compete day to day, our challenge is convincing media buyers and clients that our medium is more valuable than ever.

“It’s more engaging with our audiences. It delivers better cut through. It’s more localized, which is something that the global players cannot do. As an industry I think we’re really on the road to working stronger together for the health of radio… that’s something I am quite passionate about.”

Economic outlook

With reports that cost of living is rising and inflation is coming, Davis says radio will deliver good value for clients. He also warns advertisers not to panic because the economy is healthy compared with other difficult economic times.

“I worked in Europe in 2000 and 2009 when the GFC hit. I saw how quickly radio was able to and respond… radio is an incredibly flexible, cost efficient, short lead time, high retail driven medium. It can driven high call to action… In tougher times radio comes into its own because of all of those factors.

“I’m not suggesting we’re entering into a GFC here, sometimes people can talk themselves into it. The fundamentals of the economy are still very, very strong, in fact improving over the last couple of weeks, so the doom and gloom that maybe people were feeling two or three months ago hasn’t transpired yet. We should avoid talking things down.

“But my point about radio is that marketing decisions are going to be made on shorter timescales. We shouldn’t hide away from the fact that we can take a brief from a client this morning and have it on the air by this afternoon.”

Digital audio

Digital offers even more value for advertisers according to Davis, who says the traditional radio business model is expanding to meet the needs of customers who also want to reach clients via new audio platforms.

“We can now improve the traditional value of what radio does by providing more digital audiences, more digital context. We are now able to localize the ads to a specific area or demographic or time of day through our audio commercialisation products.

“These are terrific stories for radio.”

ARN has pursued a strategy of careful growth into the digital audio area, which is now paying off for the company says Davis.

“The growth of our digital audiences is reflective of the success… We’ve been a bit more conservative in terms of expenditure on digital content because we wanted to understand what the opportunity was likely to be, how it was going to be consumed, and how to monetize that.

“Over the last two or three years that we’ve done that and now we’re very, very confident that the market is substantial. Our ability to merge both our radio commercial activities and our digital commerce activities means that we will invest more in our own content and that billings will increase… it will be much more profitable for us. That’s probably the highlight for us in the last six months, that we’ve been able to grow our content and make it more profitable… profitability of this segment will increase further over the next 12 to 18 months.”

Podcasts, Streaming & Digital Audio

ARN’s digital audio strategy encompasses podcasts, catch-up radio and streaming, and also extends into social audio and other digital platforms. Broadcast radio audiences and revenue still outperform digital audio platforms at this time, says Davis, pointing to PWC figures which show the value of broadcast radio in billions, while podcast and streaming revenue is only a small fraction of that at this time. The company is focusing on its core radio business while at the same time strategically stretching into digital audio platforms as it looks to the future.

“The core of that is podcasting, but we are also finding success with catch up radio and the live streams of the radio stations.

“It’s all in there on the digital audio platforms, iHeartRadio, digital radio and other digital platforms… We’ve grown our share of the total radio industry this year and any extra revenue that we’re getting [from digital platforms] is complimentary…

“We are focusing on how we can integrate our broadcast and podcast strategies a lot tighter so that we’re getting the benefit of audiences across both platforms. Increasingly we’re starting to see much more brand building commercial opportunities coming through [the podcast platform] that maybe traditional radio doesn’t get a fair share of.

“We have put in place an awful lot of third party arrangements with international suppliers, big corporations, big businesses that provide good podcasting content and revenue. That was a deliberate strategy of ours over the last couple of years… What we’ve learned is that our ability to have our own products now in the packaging of our international products will increase, and that will increase profitability because it’s obviously cheaper for us to produce our own content in the long term… we’re able to monetize our talent in many different ways now that we weren’t able to do couple of years ago.” 

radioinfo: What kind of podcasts do you personally listen to?

“Sports! I also listen to the bigger daily news podcasts, good interviews, and a bit of in-depth analysis. My categories are sport, business, general world news, that type of thing.”

CADA

The company’s new youth offering, Cada, is doing well in audience growth after three months of operation. There are early signs of revenue growth but Davis ARN’s strategy is to give it time before making any real judgements about revenue.

“It is truly a multi-platform entertainment youth brand. Whether we’re in broadcast audio, digital audio, podcasting, socials, Instagram, Snapchat, TikTok of other digital environments, it’s really all about the content.

“The content is being created by the young content creators we have employed. There is an increasing amount of Australian youth audience listening… about 75% of our audience is Australian.

“We’ve grown the audience from 360,000 listeners [when it was The Edge] to a connection with over 3 million people weekly. It is a terrific growth number and I think testament to the fact that we are true to the philosophy we have, the brand fundamentals that we have of creating diverse content that is engaged with culture, that is speaking a language of 18 to 29 year olds in Australia, and is being distributed whenever and wherever they are consuming content.

“It’s much more than a broadcast beast. I’ve been really pleased with the audience growth that we’ve had. I think advertisers were always going to wait to see what the audience growth is like, we anticipated that. But the level of lean-in and engagement we’re getting from clients, especially new clients, is more than we’ve had traditionally…  It’s early days for a revenue perspective, but we have a three year growth plan and we’re probably ahead of schedule.

“We are investing in younger audiences and focusing on audio… we’re doing something different that at the moment seems to working.”

Podcast Awards

With ARN scoring well in the finalists of the Radio Today Podcast Awards, Davis is delighted and recognises his team for their efforts.

“We’ve got a huge number of people who are very committed, passionate, creative at developing podcasts. It’s nice to see the hard work rewarded like that.

“I’m obviously very pleased… I like winning. So good luck to them all.

“But… don’t forget about the importance of where radio stands as well…

“Radio is where the majority of our listeners will be for the foreseeable future, where the majority of revenue is. But it’s great that we’re creating new revenue streams and hopefully that will help us retain and attract creative ambitious people into our industry who want to work in audio as well as radio.”