SCA’s Grant Blackley predicts when digital revenue will catch linear, doubles down on Sky News deal

Following the release of SCA's 2021 financial results, Mumbrella's Zanda Wilson speaks with CEO Grant Blackley about the future of digital audio, how the current lockdowns may impact revenues, and whether he's concerned about Sky News' YouTube ban following SCA's recent TV deal with the broadcaster.

Southern Cross Austereo’s (SCA) FY21 results saw a 40% increase in digital revenue, reaching $15.4 million, while SCA’s investment in digital was $7 million during the financial year.

CEO Grant Blackley says he’s “delighted” by the results for digital. “We categorise ourselves as an early investor, with an early investment in streaming apps some years back, through to creating Podcast One, and starting to validate that marketplace of podcasts, listening data and insights.

“Then we’ve had the investment in LiSTNR, which is only six months old. We’re very happy with that result, but we are forecasting that we will deliver a further 75% to 100% percent growth across the course of the year.”

SCA has kept up a steady string of investment in LiSTNR since it launched, adding new and often original podcasts almost weekly throughout the past half-year.

More recently, the audio company added ten new curated music stations to LiSTNR, while listeners can also consume SCA’s sports offerings through the app. This coming summer will include cricket after a recent deal was struck with Cricket Australia to broadcast the forthcoming Ashes series.

“LiSTNR, on every measure, is meeting internal targets,” Blackley says. “There were different phases to the development. Firstly there was deployment and launch, now we are on to a separate phase with a stable platform.

“Next, we now need to lean even more so into unique content development. Then the fourth phase, is monetisation. So we’re quite pleased with the maturity and progress and we will continue to lean-in and invest across each of those areas.

“There’s a growing demand for premium audio in the marketplace. LiSTNR is starting to establish itself as a viable and scaled product.”

So how long will it take to get to this fourth phase? Blackley admits that there’s “always a lag effect between consumption and monetisation in any marketplace”.

It will continue to scale but we haven’t seen the tipping point for monetisation, but it will come where you will find the digital audio market starting to equal linear radio. I think that’s still some years in the future but we are going to get to a meaningful market in the next 12 months that will be recognised by agencies and advertisers.”

Overall, SCA revenue fell back 2.2% year-on-year, a result that pleases Blackley given the challenges presented by lockdowns and the halt in radio surveys during 2020.

He also says that despite the current lockdowns affecting much of the country, that the industry is more resilient this time around and advertisers are making more “measured” decisions rather than jumping to pull ad spend.

“[This lockdown] I think we have completely different behaviour in the marketplace by all key stakeholders, that includes agencies, advertisers, consumers, and media.

What we’re seeing is that we are still in a state of recovery across the markets. I did report today that revenues in July and August will up by 20 points, which goes to show that continued recovery.”

So we’re seeing the categories come back. We are seeing more resilient attitudes with agencies and advertisers. It’s more measured and considerate on the way through. It wasn’t like this, at the same time last year when there was more fear and uncertainty, and a suspension of radio surveys. We have now future-proofed [the rating] with GfK and the CRA, for our ratings currency.”

SCA reported a steady revenue for its television assets, losing just 0.3% to $169 million. The next financial year will be worth watching closely, after SCA recently re-ignited its partnership with Network Ten, after Nine moved back to WIN as its regional affiliate.

On top of that, Sky News Regional will be available in 17 of SCA’s regional markets.

“The first thing is we’ve had a good year in TV and we’re delighted with those results. We’ve done a lot of work over the last four years with our TV asset to outsource ingest playout, distribution and our tower business,” Blackley says.

“So the thing that we functionally do best today is, in fact, sell the asset, and we’ve got the best in class sales team out of any media in TV. Moving forward it’s clear that TV has recovered fastest out of all of the sectors.”

Blackley seems unconcerned by the recent media narrative around Sky News after the Sky News Australia YouTube account was suspended at the start of the month for breaching COVID-19 misinformation policy.

“We are very pleased with the launch of Sky News [across SCA assets], as we were pleased with the seamless transition back to Ten. The on-boarding of Sky gives us the opportunity to bring in a new audience into the regions.

“It’s a very strong news and information product. They operate within the rules of Australian Communications and Media Authority, and they have not had a breach in ten years. There is some media noise around certain programs and news, but they remain fully compliant we are very comfortable with the sky news product.”

Blackley also announced during yesterday’s results that SCA had signed a provisional agreement with Google to join Google News Showcase.

He says it means two things for SCA, though he isn’t able to disclose any of the key details of the deal. “It fairly values the contribution we will make to Google News Showcase. And secondly, It gives us even more reason to continue to invest in local news and journalism, which we’ve been doing regardless.

Blackley reveals too that SCA has been “engaged in talks” with Facebook, but there is nothing public to announce on that front yet.


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