Wachovia Forecasts Radio Doom In '09 by Erik Sass,
If anyone is still cherishing hopes of a radio turnaround in 2009, Wachovia analyst Marci Ryvicker's latest note to investors should doom that idea. The outlook is overwhelmingly negative, as Ryvicker sees a 9% decline in revenues in 2008 followed by a further 13% decline in 2009.
"It's the same depressing story," Ryvicker noted. "Advertisers are cutting back significantly, given rising unemployment and the general state of the economy."....continue reading (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100330)
The article goes on to talk about the dismal future for radio advertising for 2009 and even though the last figures from 2008 are not in yet, Ryvicker says it won't prove to be any different than the other quarters. The reason for this analyst's grim outlook is the lack of local and some national advertising for radio stations that used to be their bread and butter. Without the proper advertising, radio stations have very little options left and have started to defaulting on their loans. What could this mean? This might mean even more consolidation of radio stations by one company because they might want to take the chance to buy more radio stations at the cheap price their bank might be selling them for. This could cause even more harm to the radio station's programming and individuality.
I do believe that their will always be a place for radio in our society and communities but the traditional roles of the radio have long been gone. Only time will tell if the radio industry can keep up with the times. Until then, advertisers will continue to drop their dollars from radio because it will not be making them any money. And with the economy still in shambles and a recovery from it not in the near future, you will see more and more advertisers take their dollars some place else.
1 comment:
Does this mean that there will be a monopoly of radio stations owned by select companies? Big names in radio ownership right now are Clear Channel, Viacom, Radio One and Walt Disney Co. But what happens when these companies continue to consolidate and Disney takes over? It sounds silly, but could that happen where we go from a relatively small group of owners to an even smaller group? I barely listen to radio as it is because the same ten songs play over and over again. Will it get worse if ownership is consolidated? How will it effect the music on the radio? Further, we have competing factors for listeners attention: ipods, satellite radio, the internet, music television, etc. I don't see radio completely disappearing because talk radio has a lucrative stake in people's lives, but I think the music industry will be effected greatly by the economic downturn and consolidation of stations.
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