Grim Forecast for Local Broadcast

Grim Forecast for Local Broadcast

SNL Kagan's latest deflating figures follow steep declines in 2008

March 31, 2009

-By Katy Bachman, Mediaweek

NEW YORK Another forecaster is predicting a grim outlook in 2009 for both radio and spot TV. According to SNL Kagan's updated Radio/TV Station Annual Outlook, radio revenue will drop 15 percent, only a tad better than spot TV which will decline 15.7 percent.

The forecast follows steep declines in 2008. Radio ended the year down 10 percent to $17.7 billion and spot TV was down 6.9 percent to $20.1 billion.

SNL Kagan is forecasting a turnaround in 2010, with modest growth for both media in 2013. In the five-year forecast, radio revenue will decline by a CAGR of 1.9 percent and TV revenue will drop 2 percent.

Due to the crisis in the auto industry, markets in Michigan will suffer the most, sending radio down 16.3 percent and TV down 17.7 percent this year. In contrast, Washington, D.C. will hold up better than other markets, with a five-year CAGR of -0.4 percent for radio and -0.2 percent for TV, followed by San Diego, with a CAGR of -0.4 percent for radio and -0.5 percent for TV.

Stations that harness new media and leverage their local relationships in the community should be able to survive the downturn. "Those radio and TV station owners who are able to reduce expenses while continuing to transition their business models to develop digital assets and non-traditional revenue streams will survive and reemerge as more efficient operators," said Robin Flynn, senior analyst at SNL Kagan. "If broadcasters have an advantage over Internet companies, it is their reach within local communities, and their financial success will depend on how they work to meet the needs of the local market."