• by Erik Sass  @eriksass1, January 7, 2008

Adding to fears of an accelerating slump, overall radio revenues fell 6% in November compared to the same month in 2006, according to a survey by Miller Kaplan, Arase and Co.

The decline was attributed to "very weak" performances in the 25 top markets--down 6% on average--and "soft" results at mid-sized markets, down 4% on average. Smaller markets tended to be down just 1%.

The 6% drop exceeded Wall Street's projection of 2%, and CL King's forecast of 4% to 5%. For the fourth quarter overall, CL King sees radio revenues dropping 3%.

Offsetting the bad news somewhat, radio analyst Jim Boyle of CL King and Associates, who cited the report, noted that comparisons with November 2006 were especially challenging for mid-sized and small markets because of the boom in political ad spending. If these distorting factors are removed, mid-sized markets are actually up 2%, and small markets are up 4%.

These numbers point to a major divergence in the performance of big market stations versus their smaller counterparts. Boyle opined that the "unwieldy giant platforms" dominated by nearsighted investors focused on cost efficiencies are increasingly unsuited to compete in what is at base a "management-intensive, local-centric industry."

This analysis seems to be at odds with the long-term strategy of radio giant Clear Channel, which began divesting itself of stations in small- and medium-sized markets in 2006 to focus on big properties in larger markets. However, by going private, the company also escaped some of the pressure to produce short-term gains through cost efficiencies--the "nearsighted investors" mentioned by Boyle.