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Wachovia Revises Radio Prediction Downward, Expects Drop of 13%

Wachovia analyst Marci Ryvicker revised her 2009 radio revenue prediction downward significantly, from a drop of 8% to a drop of 13%.

Even that may be too optimistic, Ryvicker warned, saying there will be no recovery until the economy and/or credit markets improve, writes MediaPost.

Commercial radio has never been more challenged, according to Mark Hubbard (via Radio Ink), radio veteran who has held various positions within the industry, including senior vice president of corporate development for Clear Channel. In a report that detailed his predictions for the new year, Hubbard identified some of those challenges as being the loss of younger listeners who are migrating to MP3 players, and the erosion of older audiences as they switch to competitors like satellite radio.

He wrote, too, that Arbitron’s PPM measurement system will be “a disaster for radio.” The industry has lived for years on imprecise Arbitron numbers, but “we all knew that this system was over-estimating the audience data,” he wrote. “...People report their ‘feelings’ and not their actual behavior. Feelings were easier to exploit. Actual audited numbers were the death of internet banner ads. Look for perfect information to remove the last vestiges of the creative glow of inefficiency that radio has enjoyed for years.”

Hubbard pointed out that the financial underpinnings of the industry have been “severely stressed,” and that there is no leverage left in the system enabling companies to buy and sell things. “This is a great time to buy, but only if you have cash and don’t need financing.” There are sellers everywhere, he pointed out, but not many buyers.