Radio Changing Its Tune

CHANGING ITS TUNE
[SOURCE: New York Times, AUTHOR: Richard Siklos]
While more than 9 out of 10 Americans still listen to traditional radio each week, they are listening less. And the industry is having to confront many challenges including streaming audio, podcasting, iPods and satellite radio. As a result, the prospects of radio companies have dimmed significantly since the late 1990’s, when broadcast barons were tripping over themselves to buy more stations. Radio revenue growth has stagnated and the number of listeners is dropping. The amount of time people tune into radio over the course of a week has fallen by 14 percent over the last decade, according to Arbitron ratings. Over the last three years, the stocks of the five largest publicly traded radio companies are down between 30 percent and 60 percent as investors wonder when the industry will bottom out. Now, radio’s woes have spurred a new wave of deal making. Clear Channel Communications, the nation’s largest radio operator, is now considering selling some of its 1,200 stations in smaller markets after years of acquiring everything in sight, according to industry analysts. The CBS Corporation did the same thing recently and now says it is looking at further station sales. The Walt Disney Company struck a deal this summer to get out of the radio business altogether, and in May, Susquehanna Broadcasting, the nation’s largest privately held radio group, was sold to another broadcaster. But rewriting the ownership map is just part of radio’s scramble to find a new groove. In the last year, the industry has moved into overdrive by increasing experimentation with new formats and starting digital initiatives like HD Radio -- a nascent format that will allow listeners with special tuners to hear more specialized channels. Radio companies are moving fast into Web businesses that incorporate video and other features that could not have been imagined when commercial radio first appeared nearly nine decades ago.
http://www.nytimes.com/2006/09/15/business/media/15radio.html
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