November 23, 2008

Advertising declines...

“Mounting debt and a sharp drop in advertising” sounds like descriptors for the ailing newspaper industry. With major dailies cutting staff and slimming the size of their papers, smaller companies serving local communities – like some Lee Enterprises Rapid City Journal regional papers (Lawrence County Journal) – have turned to publishing just weekly.

But in this instance, “mounting debt and a sharp drop in advertising” characterizes another struggling media enterprise: commercial radio. Unlike the declining circulation of newspapers, however, radio listening -- according to a recent New York Times article -- is actually increasing. Nonetheless, the radio business seems to be struggling big time.

One of the giants of the industry, Citadel Broadcasting, reportedly has laid off 340 people this year, while CBS Radio has chopped 480 staffers. Another radio conglomerate, Emmis Communications, has reduced its staff by 480.

Of course, most of the impact has been in large metropolitan areas, but heartland radio operations are not impervious to these tough economic times. Competition from other technologies – iPods to satellite radio – is taking its toll.

Readers of this site know of our affection for local broadcast services, and we've often waxed nasty about margers and consolidations. We get little solace from the likelihood that media consolidation costs likely caused some of the radio giants to go deeper into debt as they tried to gorge themselves with even more radio stations.

Again, locally-owned and operated stations are certainly not immune to marketplace vagaries, but good local management can help stave off some of the traps that the big guys have fallen into.

A looming challenge for all the radio industry: what to do about digital radio? That’ll have to be the subject of another session

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