Australia’s commercial radio celebrated a milestone 100-year anniversary this week, as it prepares to report “double-digit” growth in digital audio ad investment.
Ford Ennals, the chief executive of CRA, said the industry is in good shape, “100 years on, it’s not showing its age – radio has adapted as a flexible medium, and I think it’s very much poised for growth in the future.”
The growth is being driven by podcasts and digital investment and the CRA predicts “double-digit growth for digital audio” ad spend this year.
“We certainly see ourselves running between a 15 and 20% increase in streaming podcast revenue, and that’s also true for the broader audio market. What we see on the radio broadcast side is a market that’s flat – it’s strong and resilient, but it’s not showing growth this year.
“It’s been a challenging year for many, many mediums, and a lot of advertisers have pulled back a little bit waiting to see where the recessionary winds blow. But radio has held up, we’re very pleased with the fact that we’ve grown overall.”
Contract extensions and potential takeovers
The anniversary comes in a big week for the sector, which saw Kyle and Jackie O dominate the headlines (again), with the 10 year contract extensions with ARN – and Christian O’Connell’s five year deal. All coming amidst the ongoing negotiations surrounding a potential takeover bid for SCA.
“This milestone comes at a really good time,” Ennals said. “There’s been a lot of publicity surrounding the contracts for Kyle and Jackie O, and that just reinforces that radio broadcasters are prepared to invest in talent, because talent builds audiences. It builds audiences not just for music, but for advertisers.
“People are investing strongly in radio and audio because they’re confident that the medium is going to grow, that’s behind the announcements from ARN, and perhaps behind some of the activity we see in this merger area between ARN and SCA.
“People feel that maybe radio and audio assets are undervalued, and that there’s a lot of value there because we’re going to see growth.”
The strength of Australian audio
Speaking to Mediaweek as he left Parliament House after meeting with Communications Minister Michelle Rowland, Ennals said the Australian audio landscape is “the strongest in the world.” He credits this to “the geography of the country and the localness of the markets,” pointing out the vital role that radio plays outside of brightening people’s days with entertainment.
“We have 260 commercial radio stations, 220 of those are outside the five Metro capital areas. There are a lot of towns, a lot of rural areas, and a lot of markets that don’t have a local newspaper anymore – hundreds of local newspapers have closed, so in many cases, commercial radio is the only local media in town.
“I’ve been at a conference today with the Communications Minister talking about emergencies, talking about the bushfire season. People rely on radio for that critical information. So I think the local connection is one of the reasons why radio is so healthy and so important here today, compared to say, the US and UK.”
Top Image: Ford Ennals