When the RAB reports June radio revenue figures later this week, the consensus of Wall Street analysts is that the month will be down 4%. CL King analyst Jim Boyle says as bad as that is, he’s expecting worse – maybe as much as a 7% drop. “It appears the combination of recessionary times and ad share erosion has kept the news discouraging,” Boyle said, after looking at data from about 80% of the 50 or so markets he regularly tracks. May, typically the biggest revenue month for radio, was down 8%, and #2 June wasn’t much better.
As the only Wall Street analyst we know of who actually has a background in radio, Boyle also has some advice for broadcasters on how they might make things a bit better, using the inventory from their online sites and HD Radio channels.
“Maybe radio should go back to early TV show sponsorships or early cable net charter advertisers. It seems that the added inventory from radio’s new distribution channels, HD and online, not to mention mobile radio to come, could only aggravate the weak demand versus too much inventory. There might be a way around this circumstance. Older media veterans assuredly recall how in the early days of TV sponsors typically bought all the commercial time on a show and usually got naming rights. Such shows included the ‘Philco TV Playhouse,’ ‘Kraft TV Theater,’ ‘Ford Theater,’ ‘Texaco Star Theater’ and ‘Goodyear Playhouse.’ In the early days of cable networks, which introduced huge amounts of new inventory opposite lukewarm demand, ESPN and others turned that weakness into an attraction for sponsors by selling exclusive and/or charter advertiser packages that included countless mentions and product placement for Budweiser, Timex and others, often exclusively. Perhaps radio could sell entire dayparts on HD stations or entire pages of their websites via highly limited inventory (two spots per hour) or selective ad category exclusivity so as to bolster ad rates for the inventory that could go largely unsold or be given away as bonus spots/signals. Radio has always been a creative adaptable industry for both content and sales. It very much needs to revive those strengths, in our view. When given lemons, make lemonade,” Boyle wrote.