No relief in sight as radio ad revenue declines
By Jeffrey Yorke and Katy Bachman
NEW YORK (Billboard) - Newly released data suggests that the U.S. radio industry could be on track to record its worst annual drop in ad revenue in decades.
According to the Radio Advertising Bureau (RAB), total ad revenue for all U.S. radio markets dropped 10 percent in October from a year earlier. Local revenue fell 15 percent, while national revenue slipped 1 percent.
October marked the industry's 18th consecutive month of year-on-year revenue declines, according to James Boyle, a senior broadcast analyst at research firm C.L. King & Associates in New York.
Given that total ad revenue is down 7 percent year to date through the end of October, the continuing decline evokes comparisons to 2001, when ad revenue was down 7 percent for the entire year, Boyle said in a November 24 research note. But, he observed, that was against a tough comparison to 2000, when revenue grew 12 percent.
"One actually has to go all the way back to 1954, when radio ad revenue was down 9 percent against the prior year's dip of 2 percent" to find a worse decline, Boyle said. "1954 was the fourth straight year of substantial radio advertising underperformance versus total domestic ad revenue."
That was also the year, Boyle quipped, "when 'The Lone Ranger' had its last new radio episode and Sen. Joseph McCarthy was railing against hidden Communists."
The future doesn't appear bright, Boyle said. "If the recession lasts for all of 2009 and the weakness persists in many of the major radio ad categories, such as auto, to the point where spending severely plunges, then it may be 2010 or beyond before radio revives," he said. Continued...