ARN’s Beautiful Set of Numbers
In the current slow-growing economic environment where total advertising revenues are rising at only low single digit rates, it is rare to find a traditional media operation which manages to increase its audiences by 10% and its advertising revenues by almost twice that rate within a twelve month period. However that is precisely the performance which the Australian Radio Network (ARN) generated from its Australian radio operations in calendar year 2014 (CY 2014), producing what former federal treasurer Peter Costello might have described as being “a beautiful set of numbers”.
ARN’s remarkable performance was driven principally by a 36.0% increase in average 10+ listeners to its two FM radio stations in the Sydney market. Stalwart station WSFM rose to the #1 FM position in the market on the back of an impressive 19.6% jump in total listeners; however it was the extraordinary 59.0% audience rise at rebranded sister station KIIS 106.5, Sydney’s #2 FM station in CY 2014, which captured the bulk of the headlines.
The bold move in late CY 2013 to lure to KIIS 106.5 the top rating and out-of-contract, but controversial and incident-prone, breakfast team from 2DAY FM, Southern Cross Austereo’s (SCA) then market leading Sydney FM station, delivered immediate listener and advertiser returns for ARN.
Much of ARN’s impressive 31.7% growth in agency advertising revenues in CY 2014 was probably attributable to that single programming coup, because across ARN’s other six metropolitan stations which operate in Melbourne, Brisbane and Adelaide aggregate 10+ audience numbers were little changed.
ARN finished CY 2014 as the largest commercial metro radio group in terms of total 10+ audience with a 24.0% commercial audience share, compared with only slightly lesser shares of 23.6% for SCA and 22.7% for Nova Entertainment (Nova), thereby ending SCA’s two decade long reign as the top rating commercial radio group.
ARN appears to be well-placed to continue to out-perform its peers in CY 2015’s for three reasons:
- First, it is in a good position to maintain and further benefit from its strong on-going ratings performance in the Sydney market.
- Second, the recent high profile talent changes to the breakfast and drive teams at its recently rebranded KIIS 101.1 in Melbourne have the potential to grow ARN’s audience and advertising revenue share in that market.
- Third, the recent purchase of station 96FM in Perth from Fairfax Media, which should be at least earnings neutral in the short term, gives ARN the opportunity to fairly quickly develop a KIIS-type brand across all five metro markets, which should further boost ARN’s share of agency advertising revenues.
While nothing is certain in the highly competitive world of commercial radio, in the absence of an unlikely ratings catastrophe, the recent purchase of 96FM, combined with the other above-mentioned factors, should ensure that ARN both retains the top commercial metro audience share mantel in CY 2015 and also further improves upon last year’s impressive financial performance.
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