MTR continues to struggle

I wrote a couple of years ago about the struggle that Melbourne Talk Radio (MTR) would face in establishing a strong radio presence in Melbourne, especially given the existing players in the market namely Fairfax-owned 3AW and ABC 774.

Since the well-publicised launch of the station back in April 2010, the station has continued to receive media coverage, however this is usually due to poor Nielsen Radio Ratings Survey results. It seems that nothing has changed in nearly two years on air.

The Macquarie Radio Network and Pacific Star Network Joint Venture (JV) has also recently featured in the press due to mounting tensions between the JV partners. There has been Court action between the partners and late last year rumors were circulating that the station was soon to be reworked with the station relying more heavily on networked content from its sister Sydney station 2GB as a means to minimise costs. In fact MTR closed its Melbourne newsroom and now relies on news content from Sydney.

There was also controversy over the summer period with perennial troublemaker Sam Newman (who contributed to Steve Prices’ breakfast program) walking out on his role with the station after his on-air comments were censored by production staff. Newman a couple of weeks ago surfaced as a new signing for Triple M, after a number of years away from the Southern Cross Austereo station.

The latest Nielsen Ratings released last week again did not paint a rosy picture for MTR and its owners. MTR had an all-people share of a mere 1.4%, a slide of 0.7% from the last survey of 2011. The station trails 3AW which had a 12.8% share, with the ABC on 12.3% and sister station SEN on 3%.

Although audiences are likely to drop in the volatile first survey due to summer holidays, cricket/tennis on the ABC and other seasonal factors, the fact is MTR seems locked around a 1% to 2% audience share. Its average audience last survey was only 8,000 with a cume audience of 94,000. Comparatively 3AW has an average of 69,000 listeners with a cume audience of 608,000. In the key breakfast slot MTR managed a 2.3% share versus 17.4% for 3AW.

The problem however does not seem to be solely content based. Having spoken to a number of Melburnians and sampling the station whilst traveling to Melbourne, the station has good content in the mornings, with Steve Price in his element and the divisive Andrew Bolt providing commentary. The issue appears to be due to technical problems and brand loyalty.

MTR still struggles for signal strength, even in inner Melbourne. 3AW experienced this a number of years ago and switched from its 1278AM frequency on the dial to 693AM in order to have a stronger signal. Until MTR can strengthen its signal further, listeners will be unwilling to listen to lesser audio quality despite the content available. The other issue is listener loyalty.

It is often said that listeners have a reluctance to change radio stations. This is not just a form of convenience but listener loyalty to a station. This could be no more illustrated than with 3AW, which last week celebrated its 80th Anniversary. The Nightline slot is a perfect example of the kind of loyalty that listeners have with the talk station. Bruce Mansfield and Phillip Brady field many calls each night with devoted 3AW listeners, whilst many more listen in bed. Last survey Nightline (+1hr of Sports Today) had a 14.2% share in the time-slot (7PM to midnight), which comfortably accounted for its competitors.

Many listeners who listen to Nightline may want to listen to MTR content the next morning, but if they put their radios to sleep listening to 3AW, most radios will wake up with 3AW and then not be changed for the rest of the day.

It appears that MTR’s problems may be terminal. The lack of a stronger signal and listener loyalty to existing brands is proving a huge barrier for MTR to have a stronger following amongst talk radio stations in Melbourne. Unless MTR can develop more of a niche offering such as SEN has successfully done with sport, it will be a long road ahead for MTR to climb up the ratings ladder and generate strong revenues in the years to come.

Further compounding these issues is in developments today JV partner Macquarie Radio Network (MRN) issued a Default Notice to MTR over a Working Loan Capital Agreement, where MRN is the lender and MTR the borrower.

MRN has advised MTR that the amount owing under the agreement is immediately due and as a result MRN will not provide MTR with any further funding under the agreement.

In response to this announcement Pacific Star Network (PSN), the other JV partner in MTR, requested its shares be placed in a trading halt by the ASX.

The ASX met this request by suspending trade on the shares until Monday, pending an announcement from PSN regarding the breach notice issued to MTR.

The market awaits for PRN’s response to see what the future is for the commercial talk station.

Do you or have you listened to MTR?

Sources:

Nielsen Radio Ratings

Pacific Radio Network ASX Announcement

Macquarie Radio Network ASX Announcement

ASX Announcement – Share Trading Halt