Non-Spot Revenue Bulls Ahead, Radio’s Brightest Spot

Small-market radio continues to outpace the top 25 markets.
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Small-market radio continues to outpace the top 25 markets.

U.S. radio revenue fell 2% in February compared to a year earlier, dragged by a 4% drop in local revenue.

National business was off 1%, according to the latest stats from the RAB. But non-spot dollars continued to bull ahead, up 17%.

You’ll recall last month U.S. radio revenue fell 6% compared to a year earlier, which one analyst described then as a horrible start to the new year. For all of 2007, as we reported earlier, revenue was off 2%, though the non-spot component was up 10%.

Local and national revenue numbers are based on 100 U.S. markets as reported by accounting firm Miller Kaplan Arase & Co. The RAB has been reporting off-air data since late 2004.

Senior Analyst Jim Boyle of CL King & Associates said it was the 10th straight monthly revenue drop but “better than expected” because Wall Street had expected a 4% drop.

He also said small-market radio continues to outpace the top 25 markets and that the gap is widening. “Using a biblical analogy, David has been hurling ever larger rocks, even boulders, at Goliath and has had him on the run for the last two years.”

He said RAB’s market sample has shrunk because many small markets no longer have enough groups willing to report revenue confidentially. “Hence, even on a weighted basis, those much better performing markets are not in the sample. That might mean that over 5% of the prior sample is now missing, by our calculations, which might deduct (30 to 40 basis points) of positive growth from ongoing Radio Ad Bureau industry revenue levels.”