John Drinnan: APN radio buy changes landscape

Newstalk ZB host Mike Hosking. The network will now be 100pc owned by APN News and Media, publisher of the NZ Herald. Photo / Janna Dixon

APN's buyout of the Clear Channel stake in Australasian radio networks will change the advertising landscape as it integrates operations online.

But it's not clear yet whether closer ties between its print, radio and digital arms will be focused at a corporate level or have a direct impact on consumers.

The focus in New Zealand will be on print operations, including the NZ Herald, and Newstalk ZB. APN has today indicated that it won't be rushing to a one newsroom model.

Clear Channel's sellout of a 50 per cent stake in a joint venture is no big surprise. It has been mulled over in the market off and on for five years.

The American radio giant has faced its own financial issues and has sold other overseas ventures.

But the complexities of joint venture ownership limited prospects for a sale. The 50:50 Australasia joint venture was a relatively small scale operation for Clear.

But APN's purchase - A$246.5 million for the 50 per cent stake - has a significant effect on competition for advertising revenue.

Under the umbrella of Australian Radio Network (ARN), the joint venture includes New Zealand networks Newstalk ZB, Radio Sport, Coast, ZM, Classic Hits, Radio Hauraki and Flava, which had 2013 revenue of $267 million.

The New Zealand commercial radio market is shared - almost equally - with MediaWorks, whose networks include RadioLive, More FM, The Rock and The Edge. MediaWorks and TRN compete head to head for key demographics.

But like newspapers, radio is focused on local retail advertising markets and not the big national clients delivered by advertising agencies. In that sense there is room for more cross media advertising deals.

Across the Tasman, APN Australian metropolitan radio stations include KIIS 1065fm, Classic Hits and The Edge with 2013 revenue of A$693 million.

After a period where APN was looking for buyers of its print interests, the acquisition of TRN will be welcomed and help entrench its role in high cash turnover businesses. Sceptics will say radio entrenches APN in old media, at a time it is under intense pressure. But radio has coped relatively well in the unravelling advertising crisis.

All media have battled the upheavals in advertising including the new competition from the likes of Google and social media.

Radio has benefited from being a medium that people can listen to at the same time as consuming other content.

Meantime a new management regime at TRN led by CEO Jane Hastings has also been improving the marketing focus of the way TRN is run.

APN has looked in the past at divesting New Zealand operations and recently sold magazines including The New Zealand Woman's Weekly, Listener and Creme to German publishing group Bauer. Closer ties between print, radio and digital now make more sense.

Sky Television had looked at TRN and it is understood it liked what it saw.

But the sale never went ahead.

It is understood that across the Tasman the media company SevenWest network had expressed interest in Clear's stake in Australian stations.

Sky TV's John Fellet says he doubts that the departure of Clear would have a big impact on the overall media landscape.

But the Radio Broadcasters Association chief executive Bill Francis - a former head of talk radio at TRN - said that Clear had always had a significant impact offering advice to ARN including TRN.

The new operation will continue to use the iHeartRadio digital radio system - a radio version of Spotify - that is closely linked to Clear in the US.

Francis doubted that the main rival of TRN - MediaWorks - would be overly concerned apart from the potential for a coalition between Herald and TRN content. But TRN already has to compete with MediaWorks owning TV3. The biggest impact should be closer ties expected between the digital arms of APN's print including the NZ Herald and its talk radio stations Newstalk ZB and Radio Sport.