Wednesday, March 30, 2011

Radio...Still Not Dead

Good thing too, since that's the business I've spent the most time in since my teen years.

In a Renaissance for Radio, More Listeners Are Tuning In

Radio stations are receiving a surprisingly strong signal from audiences and the financial markets this year, even as they face intensifying competition from satellite and Web-based audio services including Sirius XM Satellite Radio XM and Pandora.

An average of 241.6 million people 12 and older listened to conventional radio stations each week last year, an increase of 2.1 million over 2009 -- and up 4.9% vs. 2005, according to an annual study that media and marketing research company Arbitron released Monday.

"Radio is much stronger than the general perception of it has been," says Carol Hanley, Arbitron's executive VP of sales and marketing.

The report follows the announcement this month of the biggest radio deal in years: Cumulus Media, the No. 2 station owner, agreed to buy No. 3 Citadel Media for cash and stock that values Citadel at $2.4 billion.

Cumulus will have 572 stations if federal antitrust officials approve the union. That would trail industry leader Clear Channel, with more than 850 stations.

The industry still faces challenges. From 2000 through 2010, teens and young adults cut their radio-listening time in half as they became infatuated with the Internet, cellphones and video games, Edison Research reported.

Yet stations appear to be getting a lift from their ability to adapt to local tastes. Radio owners "can shift their programming very quickly," says Howard Bass, senior media and entertainment partner with consulting firm Ernst & Young. "That's why they're so resilient."

That has helped radio appeal to the growing Hispanic population. The number of Hispanic radio listeners increased 1.1 million last year, Arbitron says, as stations picked up on programming formats for Spanish-speaking audiences.

For example, Texas now has 154 Spanish-language stations, up from 25 in 2000.

The Hispanic audience "has grown immensely," Bass says. "Clearly the listenership has followed the trends."

Meanwhile, radio is benefiting financially from this year's stronger-than-expected market for local ads. Radio's biggest customers, automakers and dealers, are introducing 65 models in 2011, up from 60 last year and 40 in 2009, Wells Fargo analyst Marci Ryvicker says.

"As these local dealers become more (economically) sure-footed, you're just going to see incremental growth in that category," Cumulus CEO Lewis Dickey told Wall Street analysts last week.

The auto industry accounted for $1.8 billion of radio's $17.3 billion in ad sales last year, according to the Radio Advertising. The industry total was up 6% vs. 2009.

(Source: USA Today, 03/22/11)

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