Analyst Marci Ryvicker noted that the commercial U.S. radio industry’s March revenue performance was the worst drop since right after 9/11.
“Radio, which is already a secularly challenged industry, is being further aggravated by the weakness permeating throughout the economy,” she wrote.
“During the last recession (’01), local radio was –4%, national radio was –19% and NTR was not a separate line item due its immaterial nature. Considering radio’s fundamentals were much stronger during the last recession and a recovery did not occur until April of the following year, we don’t expect there to be improvement in the sector’s core business — although we may see some lift” in the second half due to political spending, she said.
“Although it is difficult to extrapolate these figures to other industries, we believe that the magnitude of radio’s declines confirms what we have been hearing from ad buyers. For example, we attended an out-of-home conference where sources told us that advertising in general remains challenged, especially the local ad market,” she continued.
Ryvicker has lowered her estimate for the year to a decline of 2% overall for radio. She works for Wachovia Capital Markets.