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Will the Recession Save Local Radio?

October 22, 2009

Posted by: Chris Palmeri in Consumer

Terrestrial radio ad revenue has declined 24% in the second quarter of 2009.  Contributing to this sharp decline has been a combination of the unstable economy and competition from online/satellite radio outlets.

The poor financial performance has led several large radio groups, such as CBS and Clear Channel, to re-think their current model and sell off stations in small to mid sized markets across the country.  The moves are an attempt to refocus resources to the top 50 markets, where there is greater profit potential.  CBS recently announced the sale of four radio stations in Portland, Oregon to Alpha Broadcasting, a small independent radio group headed by a former veteran broadcaster.

As smaller radio groups move in to purchase these discarded stations, a resurgence of independent ownership may be on the horizon. This could change the landscape of local radio by reversing the trends of the past decade, during which time an FCC ruling made possible the consolidation of station ownership under a handful of large broadcast companies.  Nationally syndicated programs and formats replaced local content on many stations, which eliminated a key differentiator with online/satellite radio outlets.

Independent owners can now break from corporate mandated programming and reach out to the community with a focus on local news, events and on-air talent.  This local focus should translate into increased listening, which in turn would allow stations to charge higher rates while attracting more advertisers back to radio.