Join the club?

ARN "isn't afraid" of the meteoric rise of audio-based social media channel, Clubhouse according to CEO Ciaran Davis.

The platform, which allows users to join by "invite only", reached 10 million app downloads in February and boasts celebrity users such as Elon Musk, Mark Zuckerberg, Drake, Oprah Winfrey and Jared Leto.

However, despite the growing influence of the app, Davis points out it remains a minnow globally and locally. There is more of a likelihood ARN would partner with the app rather than compete with it.

"The premise of Clubhouse is in-line with radio – connecting people as a community through the audio channel. From our perspective, they aren’t competitors, as we offer a similar product on a larger scale, through multiple different channels and devices," Davis told Mi3.

"We’re not afraid to partner with players in the social media space, we do so already with the obvious ones, Facebook and Instagram but are also becoming more heavily involved in TikTok."

Davis said any decision would boil down to relevance, with ARN's content needing to suit the dynamic and interactive style of Clubhouse. The radio boss also says there would need to be proof that radio audiences were migrating to the platform before any partnership is considered.

The Clubhouse platform allows users to host "rooms" in which they act as a moderator and allow people to openly discuss preset topics, ask questions or listen to a panel. Industry insiders have already drawn parallels with talkback radio rather than typical music-led commercial radio.

Radio parity

Davis says the headwinds radio faced in 2020 are beginning to die down, with ARN expecting to return to year-in-year revenue parity by the end of Q2.

The network’s radio revenue was down 6% for 2020, recording $208.4 million for the year compared to $222.3m in 2019.

Davis attributed the decline to the significant impact Covid had on the travel, entertainment and SME sectors, all of which are key radio advertisers.

He said there are already signs of a rebound coming from SME and other direct advertising sectors, and expects travel will begin to pick up towards the end of the second quarter.

The radio boss added that there was still an issue with the perception of audiences compared to ad spend.

"There is a misconception from advertisers around the audiences listening to radio, which has been a contributing factor to the decline line spend," said Davis.

"Audiences didn’t decline, they shifted – smart device listening increased 60% since the start of Covid and streaming of ARN stations climbed 14%."

Davis suggested belt tightening by advertisers has also limited radio as a channel for "primary use".

"Most brands have had to narrow the amount of media they use, with the majority leaning into television, as we saw with their stronger fourth quarter," he said.

"However, what happens generally is that when key inventory becomes less available on TV, there is a natural spill over into radio, as brands search for alternative broadcast methods. That's what we are now beginning to see – and are likely to see more of as ad spend returns."