More Revenue Pain For Radio
Over the last two days both Entercom (inclusive of CBS Radio) and Radio One released their Q2 Earnings. The numbers weren’t good, with Entercom declining by 8% YoY and Radio One dropping by 3.5%. Entercom attributed their decline to $12M in non-returning traffic revenue from United States Traffic Network. But that would only account for 3% of the decrease – so they had an organic decline of -5% without the USTN collapse. Radio One’s woes were blamed on its flagship market Atlanta being down 11%.
Last week I blogged about iHeart’s 3.5% revenue decline, which came on the heels of Emmis’s -4% performance in Q2. Cumulus will be the last of the large broadcasters to announce their Q2 Earnings next week. Regardless of what Cumulus reports, this is going to be a bad quarter for Radio.
So why is Radio revenue declining? The economy is red hot and overall media spending is increasing in the US. On top of that we’re in a political year, which usually gives Radio a 1-2 point bump in revenue. I think Radio is starting to feel the effects of streaming, which has been eating into broadcasters’ ratings and revenue for years. As a result we’re finally seeing a structural decline in demand for Radio’s on-air inventory which is so large that the broadcasters can’t make it up with digital or experiential dollars. If I’m right this will be the first of many bad quarters in Radio’s future.