Smaller markets seen rebounding fastest


If it weren’t for the scale, the new chart from BIA Financial Network would look pretty good. After hitting bottom in 2008, radio revenues should rebound. But that growth line is still in negative territory for a while.

Expanding on his earlier forecast of no growth for the radio industry until 2010, BIAfn Vice President Mark Fratrik has broken that down by market size. He sees markets 51+ and 11-50 getting back to 2007 revenue levels by 2011, but with the largest markets, #1-10, lagging two to three years behind that.

Fratrik told RBR/TVBR the top 10 markets are "big waves" and in some sense may distort what is going on in smaller markets. He noted that while the industry is down overall, some smaller markets will be up in 2008 – including McAllen-Brownsville, TX; El Paso, TX; Madison, WI; and Baton Rouge, LA.

"It’s not just one industry. It’s a whole different dynamic going on in the medium and small markets," Fratrik said.

"We’re in a little recession. I don’t think it will be very long, but it is a recession," he said. But that makes it a good time for entrepreneurial companies to buy stations. "The glass half-full approach is that there are opportunities out there of underperforming stations that may have to be sold or the owners just want to get out of the industry," Fratrik suggested. For the buyers, there should be better days ahead.

"We don’t foresee radio operators returning to the double-digit growth they experienced in the earlier part of this decade but it is evident that a resumption of slightly stronger revenue growth will bolster their financial futures as they continue to capitalize on their digital assets and, simply, their positions in their local markets," Fratrik said.