Lachlan Murdoch’s New Dilemma, How to Get Young People to Listen to Radio

by StreetCorner 27/11/2009

Lachlan is now the 50% owner of DMG Radio Australia. Last time we looked, many of the licences for DMG Radio Australia were held in offshore companies but perhaps the accounts for the business are now more straightforward and depreciation of the licences is now on the Australian accounts. In any event, depreciation of the radio licences is not the key problem facing DMG, audience is. Lachlan said yesterday that “ we have found in DMG Radio Australia the right business, the right partner and t

he right brands which are positioned for exemplary growth” and that “together we will explore new growth opportunities in the existing business and also in related media.”

The Nova stations are the key asset of DMG Australia and in part they have struggled to retain the early promise of the brand as ratings have slipped. This is not, however, a problem of their own making, as the available audience in their target market has been declining at the same time as handheld music devices have flourished.

DMG Nova’s station in Sydney provide snapshot of the problem facing youth focused radio stations. Because time spent listening to radio has been going down in the younger demographics for many years it is now very difficult for any radio station focused on youth to attain high ratings even if they command a high share of their target audience.

In Survey 7 the Average Audience Monday to Sunday for the 10-17 Demographic across all Sydney radio stations was only 35,000. Of this Nova achieved an average audience of merely 6,000 listeners. This means that of the entire Sydney population an average audience of only 6,000 aged 10-17 were listening to Nova across the week.

Nova had more luck with 18-24 year olds with an average audience of 9,000 for this age group, 20% of the total average audience of 45,000. But Nova’s largest audience is now 25-39 year olds, with an average audience of 17,000. In the 25-39 age group, there is a 135,000 average audience across all Sydney stations ie 135,000 average across the week. The only problem is that now that youth aren’t listening to as much radio, more stations are competing against each other in this demographic. 2DayFM, Mix106.5 and Vega all have over 10,000 average audience in this demographic. Vega the other DMG station has an 11,000 average audience in this demographic, just as many as it has its target demographic of 40-54 so it’s now competing against Nova in its key demographic. Ironically Nova now has a higher average audience of 40-54 year olds than 10-17 years old, with 8,000 on average listening to the station.

At the other end of the spectrum, there are 210,000 people listening to Sydney radio at any one time in the 55+ demographic. So success in this demographic can translate into a big ratings share.

2DayFM, the Number 1 Station for 10-17 year olds had an average of 10,000 listening the No1 Station in the 55+ demo, 2GB, achieved five times this audience with an average of 52,000 listening to the station. It’s hardly seems fair does it.

So it will be interesting to see how Lachlan Murdoch is going to achieve “exemplary growth” with DMG with its “talented on and off air people” (something that has never been in question) in the “existing business and also in related media”. The challenge in the existing business is not of DMG’s making, it’s just a structural shift which has seen young people the world over listen to less radio. Nova is a great brand but it now competes mainly in an older demographic of 25-39 and is butting up against Vega’s audience. Lachlan clearly has a vision beyond youth radio, taking share from 2DayFm doesn’t solve the long term structural problem. So what mediums are the Nova and Vega brands going to turn up on next? Something a family member owns or does he have a separate vision?

Disclosure: Macquarie Radio Network owns Macquarie Media Network, the owners of Streetcorner.com.au

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