Look for June revenues to be down 2% when RAB issues its monthly report, says CL King analyst Jim Boyle. But he notes continued strength in smaller markets, where Arbitron markets #76 and smaller were up 6% for the month, while their cousins in the top 25 fell 6%, based on his data gathering. June, Boyle notes, is the second biggest revenue month of the year for radio, behind May, and the small and mid markets have now beaten the big markets 15 times in the last 17 months.
"Apparently it is better to be in Des Moines than Detroit or operate in Lafayette than LA for revenue growth prospects, according to the market data," Boyle told clients. The analyst continues to believe that 2007 is shaping up to be the 7th year in a row of "slow-to-no growth" for radio. Is going private the answer? "When and if some radio companies decide to offer investors a significant premium near term to go private, even patient investors may have a very hard decision [to make] about the prospective long-term rebounds of individual companies in a seemingly mature media business versus taking the cash," he concluded.
SmartMedia observation: Why is it better to be in markets #76 and below? No real good reason but the true answer, those market operators have to operate their stations and truly work for a living. They are local and being local means being out serving and promoting to your market. Most of the operators RBR speaks with in those markets are doing what they do best and that is local. They do not pay attention to the top 10 markets. As one operator said, "What new idea has come out of NYC, Chicago, or LA in the last 2 years? Zip!" Know something, that operator is right.
