John Kelly’s ambitious plan for SCA’s ‘growth engine’ LiSTNR
Following its somewhat disappointing full-year earnings, the silver lining for Southern Cross Austereo (SCA) is the 36% revenue jump by LiSTNR. “It is our growth engine,” said the company’s newly minted CEO, John Kelly, who wanted investors to know that LiSTNR is crucial to SCA’s plan for capturing known audiences.
Kelly said in the earnings released yesterday that LiSTNR is on target to break even during the fourth quarter of financial year 2024, which is a year ahead of previous guidance.
John Kelly
Hitting the LiSTNR breakeven milestone would be a major achievement for the company, considering the significant set-up costs and ongoing development of the platform continue to erode group profit. The total expense of the digital audio operations was $36.6 million for the 2023 financial year, with an increased spend on “employee expenses to capture monetisable audience”.
When asked what these expenses specifically entail, Kelly told Mumbrella that it’s an investment in sales and employees who have skills in personalised targeting.
“Sales heads, particularly in the programmatic space, is where we’ve got people working with desks to grow our audience in that space,” he said.
“The second part is actually people that are going to increasingly work with personalised opportunities to directly target our known listeners, to reduce churn, to increase the ARPU (Average Revenue Per User) associated with our listeners, and to increase the lifetime value associated with listeners.”
“We think that investment will pay dividends and higher CPMs and continued growth in revenues in the future.”
SCA is “unapologetically all about audio”, said Kelly, while the clock ticks for its regional television operations. Addressing the question of whether SCA is looking for a pathway out of TV, Kelly said it’s more about maximising the earnings from its operations.
“We’re disappointed with the TV performance for the year, no doubt about that. It was the main drag on our results,” he said.
However, it is fuelled by factors including a waning television advertising market, the lack of a unified sales approach with its content partner Ten, and Ten’s ratings, said Kelly.
In its results, SCA flagged a strategic cost review to remove $12-15 million in annualised costs, with $5-7 million targeted for the current fiscal year. While television seems like an easy target, Kelly said the program will be implemented across all parts of the business.
“Whether it be TV, radio, podcasts, technology, corporate, everything, there will be no stone left unturned to find ways of doing things better in the strategic cost review.
“In relation to TV, our main issue is monetisation … ensuring we monetise that audience our friends at Ten and Seven deliver in the most effective way possible.
“Cost out is maybe incidental, but it’s not the priority.”
