“Challenging” conditions in the advertising sector and an audience drop from the Today Network are continuing to impact Southern Cross Austereo, with the group downgrading revenue forecasts for the next financial year.
In August, the network announced that it expected revenues for the 2015 finanical year to be 5-7 % down on the prior year. However, at SCA's annual general meeting yesterday, CEO Rhys Holleran said; “Market conditions and continued ratings challenges lead us to believe that we are likely to be marginally outside this range. The revised figures for the finanical year will instead hit 7-8 %.
Holleran said that this would make SCA's half year results 18-20 % down from the first half of FY14 compared to an expected 10-15 %provided to the market in August.
He added that the first two months of the 2015 finanical year had seen a challenging advertising market as a result of being in a prior year federal election and the impact of economic uncertainty.
SCA chairman Max Moore-Wilton added that SCA is expecting metro figures to be down further in 2015 from previous 0.6 per cent loss as the group “cycles through tough comparative figures this year and continues with the regeneration process on the Today network.”
The station has been hard hit in the ratings since the departure of star radio duo Kyle and Jackie O to rivals Kiis FM last year.
Holleran said; “it was no secret that the 2DayFM breakfast show has not met our expectations” and that the group “will continue to work on returning the station to a leading position.”
He said that both TV and metro radio were being impacted by a competitive ratings environment with it's affiliate Channel 10 also recording a decline in viewership in recent years.
Moore-Wilton, who is stepping down as chairman in the 2015 finanical year, said that despite the tough environment SCA was a showing “strong leadership in the digital space” and was one of Australia's fastest growign digital publishers.
But he said his one regret about stepping down as chairman is that he hasn't seen the government reform a number of outdated legislative regulations which are preventing the industry from moving to meet the challenges of new technologies and changing market requirements.
SCA confirmed that Moore-Wilton was speaking of the need for media reform generally and with the 'reach rule' as the number issue. The rule impact TV broadcasters, noting that no one enetity can control TV stations reaching more than 75 % of the population.
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