This past year has been one filled with apprehension and economic worry. Like most other businesses out there, radio has seen a marked slide in profitability while the economy reels. Now, according to Gilford Securities analyst Jim Boyle, there is good news for broadcasters.
Radio Business Report takes a look at his findings:
Radio revenues, it seems, were only down -14% in September, after spending most of the year in the minus twenties.
Boyle suggests that in a climate in which advertisers remain highly skittish, radio’s cost advantages, along with its offer of short schedule durations, is working in its favor and improving its results quicker than expected. And he suspects Entercom is particularly well-positioned to take advantage.
Yes, that’s right, a negative number is good news. It’s a small improvement, but it still represents a rough average of a 6% jump in the revenue stream. As the bad financial news continues to roll across the economic landscape, that small percentage swims against the prevailing currents like a salmon in the spawning season.
Friday Morning Quarterback brings us more of the micro picture:
Boyle also found more signs of improvement in September, noting that in the previous three months, “there was only a single market out of nearly 50 that had revenue off [by] single-digits.” In September, nine markets’ revenue was “merely off single-digits.”
I’d be willing to bet that to the other eight stations mentioned above, this news is anything but small.
These days, everyone is hurting: individuals, corporate conglomerates, small businesses, etc. The financial travails that broadcast has suffered are not limited to our industry, but rather affect every business and person in the nation. In the face of such mammoth financial worries, that small 6%, which represents millions of dollars, is important both to the bottom line and to morale.
Mr. Boyle is correct in his assessment of radio strengths in the face of the downturn. I’ve commented on these strengths myself in prior postings. The relatively low-cost compared to other advertising platforms radio becomes and easier line item in the budget to justify. As advertisers watch every penny, the cost factor combined with the massive reach of the medium present a lovely combination.
With each tentative step on the road out of recession more companies will be looking at the most cost-effective means of promoting their products and services. Radio will be ready to help.