How bad can it get?


The current Wall Street consensus is that October radio revenues fell about 3%, but CL King analyst Jim Boyle now thinks the drop will be more like 5%. He says the long-time weakness in the top 25 markets continues, with mid-size markets down 6% and small markets off 3%. The gap that Boyle had been tracking for some time between the large and small markets continues, but it has become narrower – and not because business got better in the big markets, because it got worse in the smaller ones. He also notes, though, that the industry faced very tough comps in October, which was up 6% in 2006. In his latest note to clients, Boyle tried to tackle the question, when does radio revenue rebound? "The radio groups that are the lead clusters in a market have to drive prices up, and that often requires time and pain to get the gain. Plus, the top ad category, auto, has to start spending its considerable ad budgets again. More investment in on-air programming and more promotion spending to market that improved locally-differentiated content to listeners is part of it. There are no simple solutions or quick answers," Boyle wrote.

RBR/TVBR observation: What! Hard work, good programming, investment and promotion? Say it ain’t so, Jim! We would also add sales training, recruitment and retention. It really comes down to getting back to the basics that built radio in the first place. Everyone pays lip-service to the need to invest in the product and people, but some of the largest companies haven’t been doing much more than the lip-service part.