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Challenging Times Ahead For Radio Industry

A new analyst report suggests that radio is in for some tough times ahead. James Boyle, vice president and senior analyst for CL King & Associates (an investment research firm with offices in New York and Boston), paints a less than flattering picture of the radio industry.

�Why should the plunge radio stocks have taken the last 30 months reverse itself when the industry�s prospects haven�t brightened sufficiently? �All the trends are weak to disappointing, if not downright depressing,� he contends...and this from an analyst whose family has been in radio for 50 years.

Among the red flags pointed out by Boyle: Erosion. He suggests it is worse than industry observers realize and is accelerating. �Radio listenership is actually declining faster than analysts, investors and journalists thought.�

He says the rate of that erosion is inexplicably faster among women, which he points out is counter to conventional wisdom. �This is not a good trend,� Boyle notes.

According to his report, radio�s latest quarterly ratings book reported the worst year-over-year drop in the last 10 years, with listenership down nearly 3%.

Additionally, the industry�s traditionally strong advertising categories are cutting back. The CL King report says the telecom industry, for example, purchased 35% fewer radio spots in 2005 compared to 2004. The auto industry, another important buyer of radio, is also looking elsewhere.

�Too many of us have for too long kidded ourselves that the radio sector was, is, or is soon to be poised for a marked upturn,� Boyle admits in his report.