Investors Wary on Radio

Investors Business Daily had this to say about radio stocks Tuesday: “The way radio stocks have dived recently, investors may wonder if it’s Armageddon for AM and FM. In the last two weeks, several Wall Street firms have downgraded radio stocks or lowered their estimates for the entire sector. They cite everything from weak national advertising spending to long-term industry-specific woes.”
The publication reports that shares of Clear Channel fell another 1.5% to its lowest since April of last year and have fallen 22% in the past three months and 26% in 2004.
“Other radio firms such as Cox Radio and Westwood One have shown similar stock declines,” it stated, commenting that investors have soured on radio “as hopes for a pickup in ad revenue have been dashed.”
The article pointed to radio’s “structural problems” including spot clutter, quoting one analyst as saying radio has “bastardized its product. … The industry didn’t learn the proper discipline.” RW Online reported earlier this week Clear Channel intends to reduce spot loads across its stations beginning in January.
Commenting in the same article, RAB President Gary Fries said many analysts, who came on the scene during the Internet boom, don’t understand the radio industry.
“Fries said the problem is a poor advertising environment for all media, not an anti-radio one.”