L.A. Broadcasters See ‘Fragile Recovery Mode’ - Radio World

L.A. Broadcasters See ‘Fragile Recovery Mode’

Billion-dollar SoCal radio market was up 4% last year, SCBA says
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Comments about the revenue outlook for Los Angeles broadcasters probably could be applied to many stations and markets around the country.

“We are in a fragile recovery mode, with sales up, consumer confidence wavering and unemployment levels holding at best,” writes the Southern California Broadcasters Association about radio and TV revenue in L.A.

“Los Angeles radio revenue did see an increase of 4% year over year in 2010 over 2009. We project 2011 to come in around 3% above 2010,” the association continued in an online discussion of market factors and outlook.

“Considering political spending accounts for 4.5% of radio revenue for 2010 November year-to-date, and there is relatively little political spending expected in 2011, that’s a pretty aggressive growth rate for a local economy that is sluggish in creating jobs. If the job situation does not improve or deteriorates even more, we will likely just match 2010 revenue levels in 2011.” Again, that’s L.A. total broadcast revenue they’re talking about.

“The indicators of recovery are there, but the likelihood of continued growth [is] still tied to local job development and improvement in the housing sector.”

Looking specifically at L.A.’s recent radio sales trend, the association said, “While the local unemployment levels are stalled at near-all-time highs, retailers and radio began to show signs of recovery in 2010. Seven of the top 10 radio revenue categories increased in 2010 over 2009. The top 10 increased by 10%, driving an overall radio revenue increase of over 4%.

“Local economic experts are predicting that 2011 will have very slow, if any, growth, given the lack of new job development and the continuing problems with the housing market throughout Southern California,” SCBA said. “The 2011 year is also unlikely to have much political spending (unless Gov. Brown gets his June special election to continue the current higher tax levels). Even so, we expect radio revenue to continue to grow throughout 2011, gaining as much as 3% over 2010 as retailers realize the power of radio to drive sales.”

SCBA also said the Southern California 10-county region probably generated just under $1 billion in radio revenue in 2010. That’s a reminder of how big a contribution SoCal makes to the U.S. radio economy. By comparison, in 2009 total industry revenues were $16 billion, according to RAB estimates.

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