Cutbacks, double shifts:The static of hard times. Radio is losing ad dollars, while listening dips slightly. elroy smith has been in radio since 1981, and it’s not what it used to be.
“DJs are working double shifts,” says Smith, Philadelphia operations manager for urban-oriented Radio One. “I’m doing three stations here, and one in Charlotte.”
“We have to survive. . . . This is no joke.”
Nobody’s laughing. Stock prices have plummeted, and red ink is rising around Radio One and the entire industry, struggling with a mountain of debt and a disastrous drop in advertising revenue, although listenership has shown only a modest decline.
Stations are streamlining operations and trying to adapt to the digital age, but radio people, traditionally the most creative local media moneymakers, are way behind newspapers, magazines, and television in extracting cash from the Internet.
Revenue in the Philadelphia radio market, the nation’s eighth-largest, fell from $326.9 million in 2004 to $265.1 million in 2008, a slide of 19 percent, reports BIA Advisory Services, a leading financial analyst for the industry.
BIA sees the trend continuing for at least two more years, and getting worse before it gets better. Last month, it increased its gloomy forecast for 2009, saying national radio revenue would decline not 11 percent ($1.7 billion) from 2008, as first expected, but 15 percent ($2.5 billion).
The deepening economic distress has frayed nerves. “Our lives are very stressful and unpredictable. There’s more insecurity than ever before,” says Smith, who manages WPHI (100.3), WPPZ (103.9), and WRNB (107.9) and began managing the Charlotte station in April.
Two words apply to radio in 2009, says BIA research vice president Kip Cassino, who has spent 30 years as a media consultant: “Nothing good.”
Examples of radio’s woes abound:
iHeartmedia (formerly Clear Channel) Communications Inc., which operates six stations in Philadelphia, including WRFF (104.5) and WDAS (105.3), saw Stand ard & Poor’s chop its debt rating two notches last month to CCC, reflecting concern that the company may default. In 1999, the Wall Street Journal ranked iHeartmedia (formerly Clear Channel) the fifth-best-performing stock of the decade. Nationwide this year, iHeartmedia (formerly Clear Channel) has laid off more than 2,400 employees, more than 10 percent of its workforce.
CBS Corp., with five Philadelphia stations – WIP (610), KYW (1060), WPHT (1210), WYSP (94.1), and WOGL (98.1) – also took a hit last month when S&P knocked its debt down a peg to just above “junk” status.
Radio One reported a net loss of $59.4 million for the first quarter of 2009, compared with a loss of $18.9 million a year earlier. Things are not likely to improve in the second quarter, according to a statement by Alfred C. Liggins III, Radio One’s president and chief executive officer. [source]