A forecast of March radio revenue by CL King Senior Analyst Jim Boyle turned out to be optimistic. He thought the RAB would be reporting a 5% drop compared to March 2007. Try an 8% drop. Local was down 8%, national was down 17%, comprising a total spot drop of 10%. Non-spot revenue was up 18%, however, dragging the total back to -8%.
However, the news is not all bad. If you are operating in a small market, your station(s) is contributing to a 6% increase over the previous year, and groups operating in smaller markets, like Saga and Regent, are benefiting, says Boyle. This is in stark contrast to what looks like a 10% decrease in mid-market performance and a 13% drop-off in large markets.
The small market good news is not enough to inspire any optimism from Boyle. "Most folks believe the economy is already in or about to enter a recession," he wrote. "Radio tends to be a leading indicator. Given its short-term ad buys and with March’s potential deep swoon, one has to say we’re in a recession." What makes it even worse is his contention that the industry was already going up against easy 2007 comps.
RBR observation: Boyle said the consensus has been for a 3% shortfall in March, so the reported results may well lead to a round of eulogizing from analysts. At any rate, looking ahead, he said April appears to be written from the same script but that there is hope for something "relatively better" in May. Still, he was not optimistic about guidance for Q2 either.
|RADIO ADVERTISING BUREAU RADIO REVENUE POOL NUMBERS|
|March 2008 vs. March 2007|
|Local & Nat’l Revenue|
|Grand Total Revenue|
Local and national revenues are based on approximately 100 markets as reported by the accounting firm of Miller Kaplan Arase & Co.