Summary
Radio will survive. It is just going to be a very different medium, led largely by internet radio which has no barrier to entry.
Analysis
While it is true that smaller markets have experienced smaller rates of decline than larger markets, revenue continues to drop. What was a 20 billions dollar per year industry will this year likely be 12 to 14 billions dollars. I believe it is reasonable to expect marginal, incremental, annual growth or two to three percent, I think that is probably a best case scenario. Local radio revenues were off 25% in Q1, and network and syndicated revenue was off as well. The latter had much more to do with the recession and automotive business than with the strenght of the market. It should actually expand as local programming is replaced by network/syndicated product. The net result across small, med, and large markets will be some stations going dark, many relying largely if not exclusively on syndicated product, and only a handful retaining their positions as full service outlets, all be it with reduced staff. In large part, while the recession and automotive industry implosion have had major roles as noted above, there is a fundamental paradym shift occuring. Many groups are falling out of covenant with their lenders and are facing or dealing with foreclosure (NASSAUW) or re-negotiating terms with their lenders (ABC/Citadel, Clear Channel). Even with the Bull rally in the stock market, many if not most radio stocks remain of low value and under capital requirements, which has forced major write downs of broadcast assests. Radio will survive. It is just going to be a very different medium, led largely by internet radio which has no barrier to entry.
