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U.S. Radio Revenue ‘See-Saw’ Continues to ‘Saw’

The month of May was ‘broadly tough,’ one analyst says.

U.S. commercial radio took an 8% hit in revenue in May, its 13th consecutive monthly decline.

Compared to the same month a year earlier, local revenue was off 9% and national plummeted 13%, according to monthly figures from the Radio Advertising Bureau.

Non-spot revenue continued to buck the trend, up 12%.

Analyst Jim Boyle of CL King & Associates said the drop was a surprise to Wall Street, which had been expecting a 4% drop (his own prediction had been 6%).

“Once again, behind that discouraging monthly industry headline was the same split-personality situation,” he told investors. “In the May data we analyzed, the gap remained very wide with a 500 basis points (bps) spread between big-market declines and small-sized market revenue performance.”

In May the average big market was down 8% but the average small market was off 3%. Small markets continue to outperform big ones this year in radio.

He described 2008 as a see-saw year for radio, “as the months go from grim to less grim and back again.”

Further, Boyle noted, “About 20% of radio ad revenue is historically generated from May and June. The third sizable decline in the first five months of the year coupled with the recessionary times, ongoing audience erosion, continuing ad share drop, programming cuts and promotion budgets along with ad rate discounting have persistently hurt radio results.”