ARN Media’s $200m Kyle and Jackie O experiment has failed

ARN Media bet the entire company on controversial, high-profile duo Kyle and Jackie O.

It failed.

The list of those who think this $200 million experiment will fail includes all competitors, senior radio executives, experienced presenters and 5 million people from Melbourne who have repeatedly crashed national networks believing Victorians are desperate to hear what Sydneysiders think.

You can find more information about the explosion here.

But while the remaining lower-paid staff (ARN laid off hundreds of workers last year) are rejoicing at the end of the massive deal, it’s important to look at why the radio company adopted the idea in the first place.

An advertising opportunity

Radio stations (and all commercial media) make money by attracting viewers and then selling their attention to advertisers.

ABC is almost entirely funded by taxpayers through the federal government. He earns a small amount from business ventures, but you won’t see ads in the middle of the 7pm newsletter.

Different audience segments are valuable to different customers: for example, a company selling high-end luxury watches is more likely to target readers of the Australian Financial Review than a local newspaper in a lower socio-economic area.

Some of the most valuable segments are “grocery shoppers,” primarily people ages 25-54.

And media companies that can reach big numbers can make a lot of money: that’s why TV networks are spending billions of dollars for the right to broadcast the AFL, NRL and Olympics.

So the potential to connect national advertisers to large radio audiences in key east coast capitals was delicious.

Picture it: a demonstration, a deal, lots of hungry ears.

Kyle and Jackie O, who are extremely dominant in the Sydney FM radio market, offered this. Their shows were a steamy mix of celebrity chats, acrobatics, sexual banter and competitions.

They were a well-oiled content machine, prolific online, talked about, featured as talent judges on TV shows and entertained in weekend magazines with their lifestyles, loves and controversies.

These could be funneled into Melbourne’s breakfast market, raising dollars from advertisers, spreading stars’ eye-popping pay packets to more states and saving money on hiring local teams of presenters and producers.

The duo are number one in Sydney’s FM market and the huge deal signed to prevent them losing out to rivals can now be explained by their imminent success nationwide.

Or, as ARN’s November 2023 disclosure to the stock exchange puts it, the new regulations will be “…offset by lower content costs.”

Namely: they’re already producing the show in Sydney, so it doesn’t cost anymore to send it down the pipe.

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Not a great return on investment

Everything was very simple.

One of the many warning signs that went ignored was that Brisbane and Melbourne were both playing a one-hour Kyle and Jackie O compilation that had long been played during drive time in various states.

It was never apparent that listeners were fervently craving the entire show each day.

I haven’t bothered to get into the horrific, salacious and disgusting “scandals” the duo air, or their inability to understand that a large portion of the radio market is taking kids to school in the morning, so I probably won’t tune in to a show that discusses how to steam with your vagina.

The result in Melbourne was brutally predictable. In the latest radio listener survey, the program fell to 8th place. Not a great return on investment.

Any ideas of taking them to Brisbane as well? It went up in flames, as did the hosts’ on-air/off-air relationship.

No matter what happened to the duo from there, people outside Sydney stuck with Kyle and Jackie O.

They never connected.