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Boyle applauds Clear Channel clutter cutting
Coming so soon after his criticism last week of the giant radio platforms (7/16/04 RBR Daily Epaper #138), we were interested to get Jim Boyle's take on Clear Channel Radio's decision to cut spot loads companywide (7/19/04 RBR Daily Epaper #139). The Wachovia Securities analyst says Clear Channel is making a move in the right direction.
"The announcement is very good news long-term for radio, for advertisers, for the audience and, one would suppose, radio group investors," Boyle said of the CC Radio decision. "The long-term consequence should be, if this follow-through occurs as they described it, a much better advertising environment as well as a better supply and demand equation that should shift toward the sellers and also should blunt, partly, not entirely, one of the better selling points of satellite radio vs. terrestrial. The short-term consequences are probably very little because their deadline is a good five months off." Thus, Boyle doesn't see the policy change in creating any problems for Clear Channel in meeting its near-term financial targets.
Will it be tough for Clear Channel to make this stick, we asked?
"Not necessarily. One or two of the other groups have the 'death penalty' - - if you add inventory above and beyond what we have told you is allowed for your format, then you're fired. That's usually a pretty effective deterrent," he said, so managers aren't likely to try cheating on a firm corporate directive. "One would think that they can make it stick if they want to make it stick," he added.
Boyle isn't backing off from his pronouncement that radio's biggest groups will continue to trail industry performance for several more quarters, but he gives Clear Channel for making a move in the right direction by cutting clutter. "It was certainly one of the symptoms that would more easily crop up at a giant platform where even well intentioned corporate management may not have had as precise and detailed supervision as they might have at a much smaller, more nimble platform," Boyle noted.
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