2005 NAB Radio Show Kicks Off
September 26, 2005 at 10:00 AM (PT)
The 2005 NAB Radio Show kicked off (about a half-hour late) with the annual forum on broadcast financing, moderated by DICKSTEIN, SHAPIRO, MORIN AND OSINSKY attorney LEW PAPER. BEAR STEARNS analyst VICTOR MILLER discussed the industry's "mixed signals" with stock values fluctuating wildly despite little movement either way in revenue growth, and radio stock performance slipping while its advertisers' stock and revenues have risen. He also noted, as he did last year, that satellite radio companies remain valued higher than terrestrial radio in the aggregate despite far wider losses. MILLER said that as investors move towards using free cash flow rather than EBITDA as a primary metric, he expects radio "to start capturing the imagination" of investors.
ALTA COMMUNICATIONS' BRIAN MITCHELL said that CLEAR CHANNEL's "Less is More" ad inventory initiative will create short-term difficulty ("What's bad for CLEAR CHANNEL is bad for the rest of the industry") but that in the long term, the move will increase yield per hour and demand, leading to radio regaining "pricing power."
SAGA's ED CHRISTIAN, asked by PAPER if there's any reason to expect a revenue rebound, responded that while "hope springeth eternal," the absence of heavy political spending will make fourth quarter "tough" but "radio always comes back.... The fundamentals of the industry are as strong as they've ever been." CHRISTIAN says he expects a rebound to "mid-4 to 5 percent growth."
On "Less is More," CUMULUS' LEW DICKEY and EMMIS' JEFF SMULYAN agreed that the initiative has helped the industry, with DICKEY noting that erosion of audience shares has abated and "may have bottomed out." He said CUMULUS has been successful attracting new advertisers with 15 -second spots.
Regarding HD RADIO and the dispute over using the additional channels for "pay radio," DICKEY was adamant that "there is no fundamentally viable business model for pay radio," an assertion echoed later by SMULYAN. DICKEY responded to the comparison to cable TV by suggesting people "go home and unplug the cable" and note the obvious difference from radio, which offers far more free options.