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 people who thought this $200 million experiment would fail includes every rival, senior radio executives, experienced presenters and 5 million people from Melbourne who have repeatedly clobbered national networks who believe Victorians are desperate to hear what Sydney people think.

You can read more about the implosion here.

But as the remaining lesser-paid staff — ARN has cut hundreds of workers in the past year — rejoice at the end of the mammoth deal, it's important to look first at why the radio company took on the idea.

An advertising opportunity 

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

The ABC is almost entirely funded by taxpayers, via the federal government. It makes a small amount from commercial ventures, but you won't see advertisements in the middle of the 7pm bulletin.

Different audience segments are valuable to different clients: 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 low socio-economic area.

Some of the most valued segments are "grocery buyers" — essentially people aged 25-54.

And media companies that can reach big numbers can make a lot of money: it's why TV networks shell out billions for the right to broadcast AFL, NRL and the Olympics.

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

Imagine: one show, one deal, lots of hungry ears.

Kyle and Jackie O, utterly dominant in the Sydney FM radio market, offered this. Their show was a hot-mess mix of celebrity chat, stunts, sexual banter and competitions.

They were a well-oiled content machine, prolific online, talked about, appearing on TV shows as talent judges and feted in weekend magazines for their lifestyles, romances and controversies.

They could be piped into Melbourne's breakfast market and harvest advertiser dollars, spreading the eye-watering pay packets of the stars across more states and saving the money of hiring local teams of presenters and producers.

The pair are number one in the FM market in Sydney, and the mega-deal signed to prevent their defection to a rival could now be explained by their imminent nationwide success.

Or, as the ARN release to the stock exchange in November 2023 noted, the new arrangements "…will be offset by lower content costs".

As in: they're already making the show in Sydney, so sending it down the pipe costs no more.

Not a great return on investment

It was all so simple.

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

It was never clear that there was fervent listener desire for the full show, every day.

I haven't bothered getting into the grim, bawdy and gross "scandals" the pair have broadcast, nor their inability to understand that a huge segment of the radio market is driving children to school in the morning, so probably isn't going to tune into a show that discusses how to vape with your vagina.

The result in Melbourne was grimly predictable. In the most recent radio listener survey the show limped into 8th. Not a great return on investment.

The idea of getting them to Brisbane as well? Torched like the on-air/off-air relationship of the hosts.

Whatever happens to the pair from here, people outside of Sydney hadn't broken up with Kyle and Jackie O.

They never hooked up.