Just weeks after new Australian Radio Network (ARN) COO Michael Stephenson promised a reimagined company – the broadcasting giant has warned of a steep decline in advertising revenue heading into year’s end.
ASX data shows October revenue fell about 10% year-on-year, with full-year EBITDA now expected to be 25–27% lower than FY2024.
The company blamed “significant softness” in the national advertising market and lingering client caution as the economy continues to bite.
Radio futurist James Cridland told Mediaweek the timing of the update “raises eyebrows,” given the scale of ARN’s commitments and the renewed pressure across the market.
“Seeing advertising down 10% year-on-year in October is clearly a concern,” Cridland said.
“June’s report already showed a decline, so this feels consistent – but perhaps there’s some expectation management going on, making the situation sound worse now so the next set of results look better later.”
Cridland said the downturn comes as ARN pushes hard to reposition itself as a broader entertainment company, investing heavily in digital audio, podcasting and app-based experiences – despite linear radio still delivering around 90% of its revenue.
“They were focused almost entirely on podcasting and the iHeart,” he said.
“What really stood out was how little mention there was of the core products – the ones that actually generate the bulk of the income. It’s ironic that a $20 million-a-year show like Kyle & Jackie O isn’t being rolled out nationally, given its importance to revenue.”
Cridland singled out the ongoing boycott campaign from activist group Mad F***ing Witches, with some media buyers wary of brand association even as the show drives massive ratings.
“Clearly the group are having quite an impact,” he said.
ARN COO Michael Stephenson
Not unexpected
In their HY25 results, ARN reported that its revenue had slipped across key markets, with metro and regional advertising both down 2% year-on-year.
Group revenue fell to $334.3 million in FY23 from $344.9 million the previous year, while net profit before tax dropped from $66 million to $45.2 million.
Digital audio provided a bright spot, climbing 36% to $19.8 million, fuelled by a 27% rise in weekly podcast listening and 28 million monthly downloads.
iHeart continued to dominate the local podcast landscape, maintaining its position as Australia’s leading publisher with a combined audience approaching seven million.
From upfront confidence to market caution
At the Upfronts, Stephenson assured advertisers ARN was no longer just a radio network but a digital entertainment business built for growth.
“We’ve really focused on the transition from a radio business to an entertainment company,” Stephenson told attendees. “To do that, you must transform to become increasingly more digital.”
ARN’s transformation program – targeting $40 million in cost savings over three years, with $35 million already actioned – is helping to offset some of the impact. Operating costs for the second half are projected to improve by around 8% year-on-year.
The company said it remains focused on long-term growth, pointing to leadership changes, non-core divestments, iHeart product upgrades and a reset of its commercial team.
However, Cridland believes the group’s strategy must still contend with its core reality: “Yes, digital and on-demand audio are the future, but right now, linear radio still pays the bills. That’s where the attention – and the confidence of advertisers – needs to be rebuilt.”
Radio futurist James Cridland
Balancing ambition and pressure
For ARN, the immediate test lies in maintaining advertiser trust while managing costs and audience momentum across its radio and digital brands.
The Kyle & Jackie O deal, worth $200 million over ten years, was meant to signal strength in ARN’s audio dominance and give the network a flagship asset to anchor its growth story. Now, as advertising softens, it’s become a symbol of the balancing act between high-profile investment and market headwinds.