Nova Entertainment CEO Cathy O’Connor discussed the company’s successful business strategy at the Broadcast Asia conference this week.  radioinfo was there.

 
She presented the case study of her company’s journey of transformation.
 
“Surveying the Australian radio market is very much a story of business transformation. When you are the CEO of a media organisation these days there are many pathways you can chose,” she said, explaining the company’s transition from a radio business to its current business positioning as a diversified entertainment company.
 
“Nova’s business has outperformed its audience footprint… We have 8 stations, which delivery EBITDA (profit margin) in the high 30% range, compared with the competitors who have a 10 station footprint and make a lesser profit than Nova.”
 
Cathy O’Connor has been Nova’s CEO for ten years. In that time she has been keen to experiment and find new products, and to clearly define the company’s position. Not everything worked, such as the partnership with the now defunct Rdio music streaming service, but now the company has found the right balance of diversified products and strategy.
 
“Our initial strategy was to get the branding and the digital footprint right, then get the sales component right,” she explained.
 
Strategic considerations included increasing the digital ad spend overall, understanding millennial listening behaviours and growing the experiential part of the business.
 
“We could see that time spent listening to terrestrial radio was decreasing, so we reached out to try and get them on new platforms. We repositioned our company…
 
“Our purpose is to create and share great experiences. Radio experiences yes, but also a lot more than that…”
 
Nova has a range of strategic pillars, beginning with radio and also including audio and a digital footprint beyond radio.
 
“We need to have brands that are bigger than the radio stations that define them.
 
“Nova has music at its heart. ‘Live’ is an exciting point of connection with the broadcast listener and we wanted to amplify this concept, so we created the brand of the Red Room, an example of expanding our thinking beyond radio.”
 
The Red Room has brought in more than $4 million to Nova’s business. “When we started the Red Room it was with a $15 neon sign and performances in our boardroom, now we have built this into something where the recording industry is asking us to be part of the Red Room. It’s a simple but good example of how we built something important in our overall strategy, and profitable.”
 
The Smooth television channel on Foxtel brings in licencing revenues and the Festival of Chocolate is a brand that is now bigger than the radio stations. “Our brand is indulgence and relaxation – so we created the festival of chocolate, which is now in its fifth year and has become the largest food festival in Australia… It also has in incremental revenue impact on our bottom line.”
 
When Nova was looking to build out its platform strategy they asked the question, ‘what business are we in?’ “That got us thinking, why not make radio for other people. We now provide Coles Radio to 16 million shoppers every week. This brings us lots of different touch-points and earns us significant service fee revenues and we also co-sell advertising into that platform.”
 
Nova is now also extending its strategy beyond radio to audio. “We have partnered with ACast, a global ad-tech platform for global hosting and ad insertion of podcasts. They have a big global catalogue and by partnering with them we have learnt a lot more about the tech platform.”

Podcasting “now has scale and growth” according to O’Connor, who says the company is now “shifting the narrative” beyond radio when talking to advertising agencies, offering clients the ears of listeners on range of platforms.
 
“We can connect a brand message across key consumption times on a range of platforms…
 
“The heart of our business growth has been because we spent time and resources in getting the new narrative right and presenting it to the market. We talk about how all our assets create audio peaks across the day and how they connect with different audiences.”
 

 
Nova’s leadership team is “spending 90% of time on the future,” because “you can’t afford to be bogged down in business as usual,” she said.
 
Other new innovations:
 
Goat.com.au – a mobile-only pop culture, entertainment and news content platform to build touchpoints with the millennial audience.
 
EXP partnership with Habitat – an experience brand. “In radio we have always played a role in activations, this takes it to a new level.”
 
ESL – a gamer partnership. There is $900 million global revenue in gaming and significant sponsorship revenue going into eSports. “The partnership with ESL brings Aust brands into this emerging space.”
 
Wine Selectors wine co-branding and a wine podcast, which aligns with the smooth brand and audience interests. “We expect a six figure sum to come into our bottom line this year from this activity.”
 
How does Nova sell all its diversified offerings? “If we do it right we don’t have to ask the market to buy from us, they want to buy from us.”
 
Success factors for the Nova business have been: bring in the right partnerships, develop the right kind of branded content, get the internal team right, especially the people in the sales force who will monetise it.