Radio Revenues Wil Continue to Stuggle in Major Markets

Implications: Latest annual "Investing in Radio" study by BIA Financial indicates large markets will continue to experience slow to negative growth for next few years while some turnaround is evidenced in smaller and medium markets. What are small and medium markets doing right that the big markets are not doing?

Analysis: Radio has had litle good news of late.  Revenues are down, HD radio is slow to develop, XM and Sirius are one step away from a merger, and the Internet and iPods continue to create more audience fragmentation.

The latest BIA Financial Investing in Radio Study indicates the doldrums will continue in the large markets, while smaller and medium markets will show some rebound--if you call single digit growth projections of less than five percent a rebound.

A few quick observations:

Small and medium markets are much more local in their orientation than large market stations clusters built on formula radio where every station in every large market sounds the same.  The big market players just don't get it that by eliminating virtually all localism they are eroding their own audiences.

The markets cited for growth in this article:  McAllen-Brownsville, El Paso and Madison--without seeing the actual breakdown much of this growth in the two Texas markets are without doubt due to Spanish language radio, which is growing at an even faster pace than general market stations.

The article suggests that digital assets will help radio stations grow their revenues, but no real evidence is presented.  For many radio stations, leveraging their digital assets is going to be a slow process.