Canary’s mineshaft song not pretty

But the Q3 lead-off conference call from Emmis (discussing what for them are Q2 results) was not entirely devoid of optimism. Jeff Smulyan continues to insist that radio is suffering from a perception problem, and still can claim 260M very real listeners.

Overall, the company posted net revenue was $94.2 million, compared to $95.7 million a year earlier. Pro forma publishing and domestic radio net revenues dropped 6.6% and 8.4%. Operating income was flat at $17.1M, and station operating income came in at $26.4M, a mere $100K below the previous year’s results.

Smulyan noted that it was an extremely challenging economy, unlike anything anybody in any industry has seen ever. “Where it goes, nobody knows,” he observed. “Through all of this, radio listening has held up…I think it’s not lost on major advertisers that this is a business that reaches 260M people a week.”

Emmis execs noted that ad placement cancellations are up – automotive and motion picture accounts were cited as examples – but at this point they said it’s only slightly above the norm, but bears watching.
Rick Cummings said the scariest part of the situation is that radio is already fighting a recent history full of setbacks, even before the current situation developed.

Smulyan said, “The question is the fundamental viability of the sector.” He said people were writing off radio as dead before the Wall Street meltdown, but the fact remains that people still tune in – that wouldn’t happen if the content was as lackluster as some claim. He said the upside is that tough times may cause many key advertisers to rethink moves into other media and return to radio, which Smulyan believes is still capable of delivering excellent results.

RBR/TVBR observation: There is something to be said for tough times working in radio’s favor. Just as fast food restaurants benefit from consumers being priced out of the casual full-service dining market; and discount retailers benefit from troubles at mall boutiques; radio’s relatively inexpensive rates compared to other media, coupled with the fact that it is doing a better job of holding its audience than is the newspaper industry, could fuel somewhat of a renaissance if general economic indicators continue to trend down.