Southern Cross Austereo Shares Drop Up to 8.1%, 2Day FM Loses $100,000 a Day in Advert Revenue over Royal Prank Call
By Vittorio Hernandez | December 11, 2012 11:15 AM EST
The joke over the royal prank call is not just on the British monarchs and the hospital where Kate Middleton is confined but has hit Southern Cross Austereo, the Australian company that runs 2Day FM.
Reports said that as a result of the apparent suicide of Jacinta Saldanha, the nurse who answered the prank call from DJs Mel Greig and Michael Christian and gave medical details, shares of the Southern Cross plummeted up to 8.1 per cent on Monday while the radio station is losing $100,000 a day in foregone advertising revenue.
Shares of the company closed 6.5 cents lower at $1.05 on Monday, while the station management estimates total advertising income losses so far at $1 million a week.
Telstra and Coles had pulled out their adverts from 2Day FM, Woolworths and Optus are also planning similar sanctions, prompting the radio station to suspend advertising indefinitely on Saturday afternoon as the public backlash over the incident intensified.
Max Moore-Wilton, chairman of Southern Cross, convened an emergency board meeting of the company on Monday to tackle the advertising loss. 2Day Fm and DMG Radio Australia are earning millions of dollars in advertising revenue based on the formula of a mixture of rock music and gotcha calls.
In the case of 2Day FM, its breakfast segment used to earn $70,000 a day in advertising, estimated Ben Willee, general manager of Spinach advertising agency and a former media buyer.
The incident has prompted DMG Radio Australia, one of Southern Cross's competitors, to ban gotcha call, but media consultant Peter Cox believes 2Day FM would not likely change its format because of the publicity caused by the royal prank call.
Besides 2Day FM, Southern Cross also owners regional TV channels and reported in 2011 s revenue of $687 million, up from 2010's $493 million income.
It is not the first fallout for radio stations. In October, another station suffered also advertising loss after shock jock Alan Jones said the death of the father of Prime Minister Julia Gillard was over shame due to his daughter's actions as head of state.
The Federal Privacy Commission said it would not conduct a formal probe of the 2Day FM incident, but defer to the media regulator, Australian Communications and Media Authority (ACMA), which is reportedly using a rarely used section of the Broadcasting Services Act in response to the incident.
ACMA will cite sections six and nine of the Commercial Radio Code of Practice over unauthorised broadcast of statements by identifiable persons and competitions, stunts and pranks made during live entertainment programmes.
Simon Glenarthur, the chairman of the King Edward VII hospital, where Ms Saldanha used to work, had written to Ms Moore-Wilson to condemn the prank and 2Day FM's actions.
To contact the editor, e-mail:
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- Toyota Tops World Sales of Cars, Sells Over 5K Million Vehicles in First Half of 2014
- Man Swindles Apple for $309,768 in 16 States
- New Malaysia Airlines Caught in Adelaide Airport Latest Scare
- Air New Zealand Pays $1000 to NZ9 Passengers After Three-Night Delay
- Qatar's Surging Real Estate Prices Won't Affect Thriving Economy – Report
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- Top Surprising Features Of iOS 8
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date
- 5 Food Scandals That Shocked The World
- Iran Leader Asks Muslims to Supply Arms to Palestine, Calls Israel ‘Rapacious Wolf’