“With no end to radio’s dismal performance in sight, we reduced our industry estimates.”
That’s the reaction of one prominent analyst, Marci Ryvicker of Wachovia Capital, to news from RAB that radio revenue in June dropped 3% compared to last year. The national piece of the total was down 8%, while non-spot was up 14%; both are small sectors compared to local advertising, which fell 3%.
“While June was weak for the third straight year in a row,” Ryvicker commented, “we note that this year’s 3% decline is the worst of the trend thus far. Historically, May and June have been the highest revenue-generating months of the year (at roughly 20% of total annual industry revenue) and provide a pretty clear picture as to how the rest of the year will play out.”
She said June weakness is not a surprise given recent disappointing earnings by radio companies. “The large market groups continue to exhibit the worst performance as they face more competition and have more exposure to national advertising than their small and mid-market peers.”
She foresees a slight drop in overall radio revenue this year.