‘You’ve got to continually invest – we don’t have that problem’: ARN chief reveals why the network has ‘taken the licensing path’ with iHeart
ARN has invested heavily in digital audio over the past few years, and is “now starting to see the fruits of our labour”, according to chief and managing director, Ciaran Davis.
The company’s half-yearly results certainly show this: ARN’s digital audio revenues reached are up by 26% from the first half of 2023 to $11 million, with iHeartRadio netting 2.8 million registered users.
“We spent a lot of time, and effort, and investment in digital audio,” Davis tells Mumbrella. “We knew it was coming for the last couple of years.”
Davis says the company’s podcast efforts have been strong for “a number of years”, and advertisers “are starting to get to grips with the medium, how it works, what best environment to use, what type of creative to use”.
“But I think with the industry measurement system Radio 360 breaking out live streaming audiences last year, that’s actually opening an availability of people listening to radio in live streaming formats,” he explains.
Ciaran Davis
Davis says that around 27% or 28% of listeners are actually turning into live radio through the iHeart app, discounting the theory that digital content would swamp traditional radio: “We see people with headphones on the whole time listening on their phones or on desktops or on iPads or on smart speakers, whatever it is. I think people thought that was immediately a risk to radio. It’s not.”
ARN’s metropolitan network achieved a 21.7% audience share in Sydney, and 19.7% in Melbourne — the leader in both markets.
“They’re still consuming our content on whatever platform that they can, and we make our content widely available,” he says.
Davis says ARN’s content is now available to listen to via over 2,000 different connected devices. “I’ve always believed that the strength of radio is the content, the localism, the connection with audiences and community. And honestly, we’re now seeing the benefits of digital coming through to audio, and I think the future is quite positive – if we continue to have the ability to invest in local content.”
ARN’s cost management is also “on track to limit total cost growth to between 2-4%,” according to their financials, delivering $6.5 million in “permanent cost savings” in 2024, with the aim of an additional $5-$10 million in savings across 2025 and 2026. This is good news, because, as Davis explains, it’s very expensive to build a digital audio empire.
“There’s a lot of debate about building your own versus licensing,” he reasons. “We’ve taken the licensing path. We spend about a million bucks a year through exclusive license arrangement with iHeart out of the U.S. It’s a fantastic platform. It’s got the back-end development capability.”
There’s also the benefit of iHeart’s deep pockets. Davis says the company spends “about $30-$35 million” on capital expenditures each year, upgrading and maintaining the app.
“It’s use of algorithms and AI to analyse interactions to have better predictability and notifications is something that I think any local operator would struggle to continue to invest in, because we know that an app like this, or a platform like this – you don’t just build it and set and leave.
“You’ve got to continually invest and upgrade, and we don’t have that problem – which is great!”
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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There is a lot to be said about radio. It has maintained its 7.9%-8.0% advertising share since 2016. and sits comfortably at best reach of the mass mediums. Whereas FTA has fallen from the 88% (7&9 -but c82% for TEN) over the past decades to c70% the radio reach of 98% in Metro markets, and much less ( c48%) in regional markets is still phenomenal at c80% . Outdoor at current 15% of ad spend is essentially over indexed for the nature of that medium. Possibly because the media buyers are such trendy young things that from their inner city abodes, that’s all that they intake of media traditional media . Of the 5 criteria that count in communicating with an audience (Video, sound/a score, talk, emotion, story) FTA still scores all of them . Just think of the “I feel like a Toohey’s” ads. Radio gets 4 of these – Sound, talk, emotion, and story, Outdoor gets one – a static billboard.
A!N should be , as should SXL, viewed as a quality media asset. .
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