Challenging Times Ahead For Radio Industry
A new analyst
report suggests that radio is in for some tough times ahead. James
Boyle, vice president and senior analyst for CL King & Associates
(an investment research firm with offices in New York and Boston),
paints a less than flattering picture of the radio industry.
�Why should
the plunge radio stocks have taken the last 30 months reverse itself
when the industry�s prospects haven�t brightened sufficiently? �All
the trends are weak to disappointing, if not downright depressing,�
he contends...and this from an analyst whose family has been in
radio for 50 years.
Among the red
flags pointed out by Boyle: Erosion. He suggests it is worse than
industry observers realize and is accelerating. �Radio listenership
is actually declining faster than analysts, investors and
journalists thought.�
He says the
rate of that erosion is inexplicably faster among women, which he
points out is counter to conventional wisdom. �This is not a good
trend,� Boyle notes.
According to
his report, radio�s latest quarterly ratings book reported the worst
year-over-year drop in the last 10 years, with listenership down
nearly 3%.
Additionally,
the industry�s traditionally strong advertising categories are
cutting back. The CL King report says the telecom industry, for
example, purchased 35% fewer radio spots in 2005 compared to 2004.
The auto industry, another important buyer of radio, is also looking
elsewhere.
�Too many of
us have for too long kidded ourselves that the radio sector was, is,
or is soon to be poised for a marked upturn,� Boyle admits in his
report.