• by Erik Sass  @eriksass1, September 17, 2008

Radio revenue is expected to drop 8% to 9% in August, according to veteran radio analyst Jim Boyle of C.L. King and Associates--making it the 16th straight month to see radio revenues decline. The consensus on Wall Street is for a 9% decline, according to Boyle, who wrote that radio "seems stuck in a new, discouraging territory," bedeviled by a secular downturn and worsening economy working in tandem.

 

As in previous months, Boyle noted, radio stations in small markets continued to outperform medium and big markets in August. Over the last 17 months, Boyle calculated that small-market radio has grown 0.8% per month on average. That may not seem like much at first, but it's better than big markets, which have seen revenues decline an average 5.3% per month.

Boyle attributes the continuing success of small-market radio stations to their "old radio" approach, focusing on local content and strengthening relationships with local advertisers. Smaller markets are also less likely to have experienced the kind of destructive price wars that undercut rates in big metro markets dominated by several large, highly competitive radio groups over the last two decades.

Like other "traditional" media, big radio groups have recently pinned their hopes on rapid growth in Internet radio revenues. However, it still contributes only a small part of total radio revenues.

According to the Radio Advertising Bureau, "off-air" revenues--which include Internet radio--grew 10% to $501 million in the second quarter of 2008. However, that's just 9% of the total $5.36 billion. And the amount of revenue added by Internet radio in the second quarter ($45 million) is dwarfed by the amount lost overall ($343 million).