Local TV, Radio Face Even Tougher 2009

SNL Kagan Forecasts Ad-Revenue Slides of at Least 15%

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NEW YORK (AdAge.com) -- Local media continue to absorb a good part of the brunt of this recession. A new study from financial-analysis firm SNL Kagan forecasts that local TV stations and radio broadcasters will suffer through two years of ad-revenue downturns, with 2009 declines widening from those in 2008.

In 2008, the broadcast sector suffered deep declines as the recession intensified, with radio revenue down 10.0% to $17.7 billion and local and national spot TV ad revenue dropping 6.9% to $20.1 billion. SNL Kagan now estimates 2009 revenue will slide even further, with declines of at least 15% for radio and 15.7% for TV stations.

Local media, which rely heavily on local auto dealers and retailers, took a hit in the last half of the year, even with spot TV gaining some boosts from political spending last fall in advance of the U.S. presidential election. In November, the Television Bureau of Advertising said it anticipated total spot TV ad revenue to fall 7% to 11% in 2009, down from a previous forecast of a 2% to 5% drop.

Meanwhile, Nielsen Monitor-Plus recently reported that spot-radio ad revenue fell 4% in 2008, and network-radio revenue was off 3.3%. The Radio Advertising Bureau recently said all radio revenue was off 9% for the year.

'Another grim year'
"The outlook for 2009 indicates another grim year for broadcast revenues," Robin Flynn, senior analyst at SNL Kagan, said in a statement. "Those radio- and TV-station owners who are able to reduce expenses while continuing to transition their business models to develop digital assets and nontraditional revenue streams will survive and re-emerge as more-efficient operations. 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."

SNL Kagan projected that markets in Michigan will grow the slowest, with mass automotive-industry layoffs placing the future of the Big Three automakers in jeopardy. The Detroit market is expected to decline 16.3% for radio and 17.7% for TV in 2009.

Washington tops the list of markets showing the least attrition, the firm said, citing increases in federal-government spending and "the migration of laid-off banking professionals to jobs in the public sector."

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