Media company NZME says three recently-launched digital advertising products have the potential to boost revenue in an uncertain media market.
Auckland-based NZME, which split from Australia’s APN News & Media in 2016, listed on the NZX the same year, and counts the NZ Herald, NewstalkZB, Radio Sport and The Hits among its main properties, said OneRoof (property), Yudu (jobs) and Driven (cars) leverage existing newspaper products.
In a surprisingly upbeat annual general meeting in Auckland today, NZME said it is focusing on three areas: slowing the decline in print, growing radio, and boosting digital revenue, particularly through its new brands.
Chief executive Michael Boggs told shareholders the company had been pleased to limit trading revenue declines in the 2017 year to 4 percent, about the same as in 2016. And cost-cutting meant earnings before interest, tax, depreciation and amortisation had fallen only 2 percent to $66.2 million.
Print revenue fell 7 percent to $221.3 million, he said, but that was “better than the market”. Meanwhile falls in radio revenue had been reversed in the final quarter of 2017, and digital grew 8 percent.
Chair Peter Cullinane, better known for founding the upmarket dairy brand Lewis Road Creamery and before that for his leadership of ad agency Saatchi & Saatchi, told BusinessDesk that although the three new digital brands would add $6 million to costs this year, they were a logical progression from existing print classifieds and other NZME advertising products.
“If you look at markets around the world, these particular verticals are highly significant and relatively simple to monetise. There’s a need for what they can offer and it makes sense because we have the benefit of being able to use our other media assets to bring people to them.”
“Trade Me has had a good time of it over the years, without too much competition When you get a major player in the market without too much competition, it’s a good place to play.”
The strategy will bring NZME head-to-head against Trade Me Group, one of New Zealand’s most popular websites and a former Fairfax Media asset. But NZME said OneRoof was already being included in 50 percent of total listings in the market, and Driven.co.nz was achieving 60 percent.
Cullinane says it’s a big market.
“Trade Me has had a good time of it over the years, without too much competition. When you get a major player in the market without too much competition, it’s a good place to play.”
Meanwhile, Cullinane announced at the AGM that Sussan Turner, former group chief executive of NZME media rival MediaWorks has joined the NZME board as an independent director.
Turner, who takes up the role on July 16, becomes part of what is turning out to be a grunty-looking board. Former ASB Bank chief executive Barbara Chapman was appointed in April and the other non-executive members are David Gibson, formerly co-head of investment banking at Deutsche Craigs, and accountant Carol Campbell.
Cullinane took over as chair of a much-shrunken board at the end of last year on the retirement of veteran director and former ANZ National Bank head John Anderson.
He told BusinessDesk today that the number of directors been cut after the split from APN because of the expected merger with local Fairfax unit, Stuff. But when that didn’t happen, the company needed to make new appointments.
While Boggs told shareholders NZME and Stuff would continue to fight in court for the merger to be approved, Cullinane said the company had reached the stage where it would be “business as usual” even if it didn’t.
“We have got used to the idea of the merger not going ahead. We aren’t waiting for the outcome [of the appeals process] before starting doing what we need to do.
“If it does go ahead, that will bring opportunities that aren’t otherwise there. But we are happy to play the cards we’re dealt.”
He said the “rabbit in the headlights” panic in the media around the decline in print had dissipated.
Rather than the rapid collapse many had foreseen, “we’ve got used to operating in a print media world in gradual decline”, he said. Even in print there were “green shoots”, he said, and radio and digital will be areas of growth.
NZME has fingers in several other digital pies including: restaurant booking software company Restaurant Hub; mortgage, insurance and vehicle finance rate comparison site Ratebroker; the Chinese Herald site; and on-demand video service WatchMe.
The shares slipped 1.2 percent to 84 cents yesterday, having declined 3.4 percent so far this year.