Nine important to Southern Cross Austereo future but radio critical, says Blackley
A year after he took the helm of a faltering Southern Cross Austereo, CEO Grant Blackley has offered a bullish outlook to the year ahead, countering the more conservative views of his media rivals.
Blackley: “We’ve seen progress over the past 12 months across our key five strategies”
But Blackley tempered his remarks with another call for an urgent need for media reform to be addressed by the Federal Government.
Speaking with Mumbrella after SCA reported a rise in revenue of 5.1% to $642.3 and a net profit after tax of $77.2m.
“It does mark the end of the first year and, as we foreshadowed 12 months ago, there was a set of strategies that we wanted to employ,” Blackley said.
This included improving the financial position of the company through capital management, investing in content, sorting its affiliation agreements, and moving to better monetise its assets than had been done in the past. Blackley said the goal was to also reset the business drivers and motivations for the executive team.
“They were our key five strategies and we are very pleased to say in the past 12 months that we’ve actually seen solid progress in each of those areas,” Blackley said.
“But I think most importantly it’s positioned the company for the future in a much more positive light than we were 12 months ago.”
While the deal with Nine Entertainment Co., to switch its regional affiliation from WIN was the headline-grabbing move of the year, Blackley was quick to point out that SCA remains 80% exposed to radio and only 20% exposed to TV.
He continues to believe that radio is ‘under done’ and has a vision of shifting the business from being a radio broadcaster to becoming an audio company.
“That said, for the 20% of exposure, the new affiliation with Nine in the three aggregate markets is obviously a step-change for us, it hadn’t occurred in 30 years – a change of that nature,” he said.
“I think it was seamless in its execution most importantly though, and the reason we did it, is because it’s got better economics. It will actually provide more audience and more revenue opportunity for us.
“We are yet to unlock the full value of that.”
While bullish about the year ahead, he admitted incremental growth would be harder to come by as the company operated from a stronger base.
He said that the sales strategies that had been put in place had not come into effect until early in 2016 with the appointment of the company’s first chief sales officer.
“We have had a very good second half and with that momentum we are actually entering the fiscal year of ’17 with positive moment moving forth,” he said.
“I actually think given our exposure to radio and our prominence in regional markets in radio we see radio improving.
“I still personally believe that it is undercooked in respect of the share of revenue of what it achieves versus what it delivers and I think a lot of media out there today, whether it be television, newspapers or magazines, are actually achieving a commensurate rate of return of the value the place to market.
I don’t think that is the case with radio. I actually think that radio is still subservient to where it should be.
“We have seen radio grow substantially in the past 12 months and we don’t see that in the coming year there will be change to that growth profile.”
He said that the company had a “strong disposition” towards more partnerships such as those struck with Vevo and the Australian Traffic Network which would also allow SCA access to emerging technology.
“We want to lean on technology, not own it and we want to work with people who are leading in their market wherever they might be. Vevo is a classic example.
“We are very considered and very thorough in looking at opportunities and we will start to expand our influence in audio as opposed to radio more substantially in the next 12 months.
“We will spend more time understanding and curating an outcome for podcasting and digital radio because we are already in that market and that is effectively an adjacent market to radio.”
He said that in 12 to 24 months he wanted SCA to be seen as “the leading audio provider” in the market, but there needed to be more education of advertisers and consumers of the opportunities.
But he said the future of the industry was reliant on the government fulfilling his promise to address media law as matter of urgency.
“I think the urgency that the industry requires and needs is no different regardless of the shape of government,” Blackley said.
“I do believe that there is a recognition from the Prime Minister to the minister to both parties, and all constituents for that matter, that media reform should occur. It is timely and it does need urgent attention.”
Hi Mum,
It is Grant Blackley, not David Blackley.
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Did he change his name as I thought his name was Grant?
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Hi Alan,
You are most right – we’ve fixed that one up, thanks for pointing it out to us.
Cheers,
Miranda