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HT&E’s Ciaran Davis reinforces ‘strength’ of radio and addresses further diversification in 2021
HT&E suffered through the global pandemic as radio ad spend fell sharply, resulting ARN taking up JobKeeper and making redundancies. Mumbrella's Zanda Wilson speaks with CEO Ciaran Davies about the shape of the company looking towards the rest of 2021.
When Australian Radio Network (ARN) parent company Here, There & Everywhere (HT&E) released its financial results for the calendar year 2020 this week, there were few surprises.
Radio, like most segments of traditional media, was hit hard by the pandemic, and ad spend suffered throughout the year. But HT&E CEO and managing director Ciaran Davis is looking beyond a 22% fall in revenue, to a “strong” balance sheet that he says leaves the company, and ARN, in excellent shape.
“As we move forward into this year, we’ve called out the enduring strength of radio. It tends to get overlooked in a digital world, and among the new products and players that are coming along.
“Listenership has never been higher, the number of devices has never been higher. And there is a [big] future for digital audio [too]. The commercial market for podcasting is growing, and we’re really going to see that grow further over the next two to three years.”
HT&E CEO & managing director, Ciaran Davis
Throughout our chat, the enduring “strength” of radio is one thing that Davis keeps coming back to. That and genuine gratitude for how his ARN staff worked through what he admits is the toughest challenge he’s faced in his media career so far: COVID-19.
Comparing the challenges to the global financial crisis, which Davies was in Europe for, he says last year was different and more “all-encompassing”.
“The difference I think with this pandemic was that it was a storm on many fronts. It was a human catastrophe, there was an economic [catastrophe]. There was a social one in terms of lockdown.
“That hit everybody very hard, as we all know. Although I think from a business perspective, you saw the good in people generally. People just rolled up the sleeves and got on with it, and that was exciting. It was very humbling to see how people adapted to working from home very quickly.
“We, unfortunately, all had to take 20% pay cuts, which was really hard on people, but everybody realised that it was for the great good, and that was great to see. Unfortunately, we had to lose some people, but things like JobKeeper, that helped stave off more severe consequences that would have been necessary.”
Davis says the on-air teams did some of the best work he’s seen during lockdowns, and he’s proud of what they did to help restore a sense of normality for Australians.
“The creativity that they pulled out, the up-beat presentation they did, that actually helped our listeners. That helped people try and have a routine, and normality.
“They were listening to Jonesy and Amanda, Kyle and Jackie O, Christian O’Connell, as they would have if they were going into work.”
ARN ended 2020 as Australia’s #1 metro radio network
When asked whether he would have done anything differently with the benefit of hindsight, Davies thinks long and hard before answering.
“That’s a really good question. I don’t want to say ‘no’ without having a think, but I guess the fact that I’m searching hard probably means no, I don’t think we would.
“At the end of H2, 2019, we made a big investment in our comms and technology, so when we had to send everyone home we were ready to go. It was a bit of luck, but everybody was able to go home on day one, set up remotely without any technology hitch.
“I was sad to see people leave the business, unfortunately, and many good people who’ve been with us a long time [left]. That was hard on a personal and professional level, but I don’t think we’d change how we operated.”
One area of ARN’s business that bucked the trend was its digital audio segment, with revenues up 122% across the calendar year.
“Through our iHeartRadio app platform we saw a huge growth in downloads and registered users,” Davies explains. “People were still listening to content, and we made it available to them on over 60 devices here in Australia.
“So they’re consuming as they want to, in their own time, with full control of themselves.
“We definitely saw catch-up radio and catch-up podcasts on the platform really increase in downloads. We also then worked hard on our podcasting strategy. We hired extra capability to work on content creation, but also to work on the back end, which was actually quite a challenging thing to do.
“And then we developed new products that we rolled out, including a product called dynamic audio, which has the targeting capability for the digital channels, but also [for] broadcast radio. Together with the sales team, we tried to bring the strength of broadcast radio and digital audio together.”
Advertisers are returning to radio, and ARN also reported revenues for January were just 6.9% down year on year. So what about marketers who might be hesitant to return to traditional media like terrestrial radio?
Davies says they shouldn’t be worried at all. “The proof is in the GfK research. Radio listening switched from in-car to at home [in 2020],” he says.
“I think that’s why we had a lot of cancellations in April, similar to the outdoor market. Advertisers thought that because people weren’t in the car going to work, that they weren’t going to be listening to radio. Actually, it’s just been a switch in terms of where they were listening.
“We saw massive growth in things like smart speaker consumption. It’s our content that people still want to consume. The environment in which they consume, the device on which they consume, is totally up to them. As the economy bubbles up again, I think listening may switch back.
“We all know the strength of radio. It has great reach, it’s a great medium for immediacy. In a market like this, you have flexibility to make the changes you want, depending on the time of day.”
HT&E bought a stake in Ooh Media in 2020
HT&E has, at various times, been involved in the business of Out-Of-Home (OOH) advertising. But having previously sold its OOH arm Adshel to Ooh Media for $570 million, 2020 saw HT&E invest in the latter company, buying a $15 million stake.
So will 2021 be a year of further investment in OOH, or other forms of media, outside of its core radio offering via ARN?
Davies was coy on the subject, but admitted the company is in “an advantageous position”, should it wish to diversify further.
“If you look at the trends that we’ve seen worldwide from a consumer perspective, really accelerated through COVID in 2020. Customer control, and where they choose and how they choose content is pretty much in the power of the customer,” he says.
“That, from an advertiser perspective, means they are looking for more reach. They’re looking for validation. From a media owner perspective, the challenge is to provide that level of validation and effectiveness.
“If I look at this market here, I think we are going to be considering – from a consolidated perspective – how we can get more content out there, how we can do more multi-platform delivery.
“Our balance sheet is very good, so we’re in an advantageous position, which gives us optionality. But there’s nothing on the cards at the moment.”
Zanda Wilson was a reporter and podcast producer at Mumbrella, specialising in radio reporting. He left Mumbrella in September 2021.
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