• by Erik Sass , September 24, 2008

The number of markets experiencing revenue declines jumped between August 2007 and August 2008, according to Jim Boyle, a veteran radio analyst with CL King & Associates, who said "this trend is troubling." Last year, approximately 60% of the 46 markets tracked by CL King were down in August, versus 95% of 43 markets tracked this year.

"It has never been so broadly negative," says Boyle.

Radio is already suffering a one-two punch, as a secular downturn coincides with an economic slump; in year-over-year comparisons, revenues have declined for five straight quarters.

Boyle noted the factors lined up against radio. "The recessionary economy does not aid radio near-term and the fragmenting media landscape does not help radio near-term and long-term." In a grim note to investors, Boyle advised: "With deep revenue declines and margins increasingly compressed affecting more and more markets, it is difficult for investors to profit near-term in radio, we feel."

As in previous months, the one bright spot for radio comes courtesy of radio stations in smaller markets, which have consistently out-performed their big market colleagues.

Over the last 18 months, small-market radio has enjoyed monthly average revenue growth of about 1.1%, versus a monthly average decline of 3.6% in big markets. Boyle has attributed small-market success to their continued emphasis on unique local content and strong relationships with local advertisers.

Also, such markets were probably spared the price wars that undercut ad rates in big markets over the last two decades.