Those two markets saw double-digit revenue declines in Q1, but COO Bruce Beasley notes that the company, overall, still slightly outperformed the industry with a 4.6% revenue decline. He was also critical of Arbitron for its PPM panel juggling in Philadelphia, which he charged has been disruptive to ratings in the market. “I would not want broadcasters to go through what we’re going through now in Philadelphia,” said Beasley when analyst Jim Boyle of CL King asked for his view of the odds for Arbitron resuming its PPM rollout in September.
Beasley was clearly displeased at having Arbitron tweaking demo cells and sub-cells “in the middle of us paying all kinds of money.” He suggested that Arbitron should not be rolling out any additional markets “until the cells and sub-cells have proper samples.”
Blaming Arbitron’s “failure to get it right,” Beasley said his company’s stations and those of other broadcasters in Philadelphia “are suffering from unnecessary ratings and share volatility.” Noting the recent initiative by Arbitron to address undersampling of the 25-34 demo, Beasley said it has resulted in lowering participation from the 18-24 demo and a “substantial decrease” in the 35-54 sample. “This is extremely disruptive to ad buyers, particularly those who use a one-book approach, rather than a three-book average to make buying decisions. And like the boy who cried wolf, Arbitron is telling PPM subscribers like Beasley that they will get it right in the next few months,” he said. Beasley said his company has established an internal task force to deal with PPM problems and he assured investors that Beasley Broadcast Group is focused on the PPM situation.
Despite all that, Philadelphia was one of the markets where Beasley Broadcast Group outperformed the overall market in Q1, as it did in its other large market, Miami. The company’s big problems for the quarter were two markets hard-hit by the housing market downturn, Las Vegas and Ft. Myers-Naples. Beasley recently made management changes in Las Vegas. In Ft. Myers, the problem is historic big-biller WRXK-FM, which has undertaken initiatives in music and promotion to get back on track.
Even with the drag from those underperforming markets, which the company said account for about 20% of total billings, Beasley Broadcast Group reported that Q1 revenues were down only 4.6% to $29.4 million. Station operating income fell 5.7% to $8.1 million. The company is not giving forward revenue guidance, except to say that it generally expects to track in line with the overall radio industry. However, for Q2, subtract two percentage points for those underperforming stations.
RBR/TVBR observation: We noted yesterday that we would be looking for PPM data from April week two in Philadelphia to show evidence to support Arbitron Chief Research Officer Bob Patchen’s assurance to clients that 18-24 panel representation was rebounding. The numbers sent along by ever helpful consultant Randy Kabrich show, once again, slight declines in 18-24 panelists, both men and women, although the count for 18-24 women only fell by one. Kabrich also notes that Arbitron fell below its target sample of 1,530 Persons 6+ in Philadelphia for the week.