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Analyst: April Results Affirm Market-Size Gap
NEW YORK -- May 19, 2008: In a research note Monday, CL King & Associates analyst Jim Boyle says that if 19th-century newspaper editor Horace Greeley -- known for his famous recommendation "Go west, young man" -- were alive today, he "might similarly note the success in a certain part of radio geography and say, 'Go small, young man!'"
While overall radio revenue was down 1 percent in April, Boyle says, "behind that was the same split-personality situation that is being neglected by radio investors." In March, he says, the average big market was down 4 percent while the average small market was up 3 percent.
Boyle notes that small-market radio has outperformed the larger markets in 23 of the last 27 months, and reiterates a point he's made before: That the best predictor for radio revenue is market size, not regional or group differences.
He writes, "The data over the last several quarters suggests market size has become a very good predictor, given an occasional exception, of whether an investor should expect good or bad news. One can see in the same region with similar economies and where there are fewer public radio groups (it is believed near-term pressure on public groups may lead to more price discounting for share vs. private groups that may have more patience to drive ad rates), less national ad exposure, and more direct client relationships in the small markets, radio revenue is surprisingly healthy."
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