• by Paul Gough , February 11, 2004

Two publicly traded companies with significant holdings in radio reported mixed results in the fourth quarter, but said the tide is turning in 2004.

Media giant Viacom Inc. said Tuesday morning that revenues fell 3 percent in the fourth quarter, from $565.3 million in 2002 to $551.1 million in 2003; full-year revenues were down slightly, from $2.12 billion in 2002 to $2.09 billion in 2003. Viacom owns Infinity Broadcasting, which owns 180 radio stations in 22 states, including many major markets. Another top 10-station owner, Radio One Inc., reported slightly higher total revenues in the fourth quarter, with $87.96 million in 2003 compared to $87.50 million the same period a year ago. Radio One's total revenues rose from $335.75 million in 2002 to $344.65 million in 2003.

Tuesday's data tracked with numbers released last week by the Radio Advertising Bureau, which said that national and local ad revenues fell 1 percent in the fourth quarter.

Revenues at 31 of Infinity's 40 markets were either flat or up in 2003, said Viacom President Mel Karmazin. Nine markets were down last year, and Karmazin told analysts Tuesday morning that six of the under-performing markets would be up in 2004.

"We have taken action to turn around those situations, and again, we feel very good about the progress that we made," Karmazin said. "Radio will be up in the first quarter, and from everything that we're seeing, radio will grow throughout the year." He predicted that Infinity would be in positive territory in the first quarter.

Karmazin declined to release pacings, but said that each of Infinity's top 10 markets would finish up in the first quarter. Infinity--and all radio stations--will benefit from easier comparisons compared to the first quarter of 2003, as the fears of war in Iraq chilled what had been a strong January with hopes of more to come.

Radio One's net broadcast revenue--which doesn't include agency commissions--rose from $76.9 million in the fourth quarter of 2002 to $77.4 million a year later. Revenue growth in Radio One's stations in Washington, D.C., Cincinnati, Dallas, Indianapolis, and Raleigh, N.C. offset declines in other markets such as Charlotte, N.C., Louisville, Ky., Philadelphia, and Richmond, Va.

Cash advertising revenues in the quarter dropped 1 percent in October and 3.5 percent in November before finishing up 10 percent in December, said Chief Financial Officer Scott R. Royster. In January, cash advertising revenue was up 9 percent in January--and as of last week, stood at 89 percent of the company's internal goals for February and 51 percent for March. National advertising will slightly outperform local in the first quarter, with national starting out stronger but being overtaken by local in March.

"The radio industry appears to be heading back into a period of moderate but consistent growth," said Royster.

Pricing, a concern of the radio industry as well as the Wall Street analysts who cover it, is slightly up at Radio One.

"I think pricing has gotten better, but there's also more advertisers out there this year than there were last year," said Mary Catherine Sneed, chief operating officer.