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MediaRave: Spotlight On Media Competition

APN, Canwest Listings Put Spotlight On Media Competition

MEDIARAVE
By John Dee of JDee Media
July 2004

The recent listing of APN News & Media and the upcoming listing of CanWest on the NZ stock exchange is exciting news for the media business. Having these two big players publicly listed will put the focus on media as a business and will lift the profile that media and advertising plays in helping to drive the New Zealand economy.

In Australia where all three TV networks are publicly listed, their performances, and programming strategies are closely followed and challenged by the financial sector. And based on that experience we can expect financial analysts here to be demanding in their scrutiny of APN and CanWest’s approaches to increasing their respective advertising revenues.

To date, there’s been virtually no pressure on the NZ key media players to be upfront in their commitments to delivering specific audience shares, ratings, or readership figures. Pressure will be put on CanWest to explain and then prove how it’s going to grow it’s audience and consequently it’s advertising share.

Currently CanWest(TV3/C4) has 25% of the TV advertising revenue, which is in line with it’s audience share of 25%.Every 1% growth in audience is worth an estimated extra $6M in revenue.

Real Interest Lies In Radio

But the real interest will be in the radio sector where APN, through it’s TRN stations (ZM,ZB,Classic Hits,Hauraki,Radio Sport) and CanWest (More, Pacific, Z, Edge, Rock, Solid Gold) dominate the market with a combined share of 81%. If APN and CanWest cannot collectively grow their share of the radio advertising market, analysts and shareholders will put pressure to each of them to secure growth by taking share off the other.

Looking at the last three years, both APN and CanWest should have some concerns.

On a national basis TRN’s audience share has dropped from 41.8% to 39.5%, CanWest has dropped from 42.1% to 40.5%. In the highly competitive and vital Auckland market, TRN especially should be concerned. It’s share has declined from 51.5% to 39.9%, CanWest has grown it’s share from 20.2% to 24.7%. Collectively, TRN and CanWest’s share has declined from 71.7% to 64.6%. The other issue will be the role of The Radio Bureau (TRB). Currently, CanWest and TRN are joint owners of TRB where the bulk of the national advertising dollars are placed. To date, TRB has worked well for TRN and CanWest with the focus being to compete against other media not against each other. This has ensured that radio has not been devalued by undercutting its rates.

Competitive Options In A New Environment

However, this model may not please analysts who will expect two competitors to compete more aggressively for marketshare. A possible outcome will be for TRB to focus on the marketing of radio and for TRN and CanWest to set up separate sales houses.

For national advertisers this can only be good news, who unlike local advertisers, have not experienced TRN and CanWest aggressively compete against each other.

The other issue will be why APN and CanWest don’t package up their various media properties to lock in more advertisers. CanWest for example, should be offering joint TV and radio packages, whereas APN could offer packages involving their press, radio and out of home media properties.

Once again this will be good news for advertisers.

By and large in NZ, media companies have treated their media properties as silos. Once these companies are listed, we can expect a change in the way media is marketed, and sold. Greater competitiveness and accountability for the advertising dollar will benefit advertisers.

One could conclude, finally, that the NZ media market has come of age.

ENDS

© Scoop Media

 
 
 
 
 
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