New media, loss of Stern are tough on local stations

Mark Fratrik , a radio consultant, says the industry may bounce back this year .

The numbers are in, and 2006 was not a banner year for Boston radio. According to a financial network report released in April, revenues in this market are down. Although some stations, particularly news and sports, continue to thrive, last year's total Boston radio revenue, $325.3 million, shows slippage from 2005's $337 million, which was less than 2004's $359.2 million.

"The industry had a challenging year in 2006," says Mark Fratrik , vice president for BIA, a Virginia-based financial and strategic consulting firm for the broadcast and communications industries. "Overall the industry only went up 0.4 percent, and in major markets, including Los Angeles and New York, revenues went down."

The reasons for lower earnings, says Fratrik, are many. The most obvious is the loss of superstar Howard Stern, who drew millions to CBS stations nationally, including WBCN-FM (104.1) , which saw its revenue fall from $26.5 million in 2005 to $18 million. Across the country, says Fratrik, new forms of media ate away at both audiences and advertising dollars.

"Radio stations have strong competitive challenges, whether it's iPods or other audio choices," says Fratrik. "At the same time, broadcasters have a lot of competition selling advertisting. Local cable is becoming more pronounced, [as are] outdoor advertising and Internet sites."

Radio in smaller cities may have done better, says industry watcher Tom Taylor, editor of trade journal Inside Radio , because there is more local and less national advertising there. "In markets outside, say, the top 30, radio stations are much closer to the actual client," says Taylor. "Everybody wants a return on investment, and that can be easier to see in Portland or Bangor than in Boston."

Even in a slow year, there were numerous winners. In terms of overall billing, Entercom's sports-talk station WEEI-AM (850) still did well, pulling in $36.5 million (down from $45.6 million during the Red Sox championship year), while CBS news-talk WBZ-AM (1030) billed $35.1 million (down from $39.4 million). In addition to the drop in revenue, news and talk, says Fratrik, are the most expensive formats to produce, requiring more staffing and licensing fees to sports teams. Nevertheless, "those two market leaders are profitable," he says. Otherwise, he notes, AM is not doing as well.

The rest of the Top 10 moneymakers were FM stations, topped by adult contemporary "Magic" WMJX-FM (106.7) , $24 million, and contemporary hits "Kiss" WXKS-FM (107.9), which made $23.6 million. Also billing big numbers were urban contemporary "Jam'n" WJMN-FM (94.5) , $18.85 million; adult contemporary "Mix" WBMX-FM (98.5) , $18.3 million; modern rocker WBCN, $18 million ; "Oldies" WODS-FM (103.3) , $17.25 million; classic rock WZLX-FM (100.7) , $16.8 million; and classic hits WROR-FM (105.7) , $13.7 million.

For 2007, says Fratrik, look for "a slight increase" in Boston radio revenues. "About $3 million, around 1 percent. Nothing to write home about," he says. Although BIA has forecast a 2.2 percent increase in radio revenue nationally, he sees Boston as "still lagging."

What will bring the market up slightly, he says, are the New Hampshire presidential primaries, particularly as candidates target specific segments of the population. "They'll slice and dice the people who live in New Hampshire but travel to Boston," says Fratrik. "It could help a bunch of stations."

On May 14, WBUR-FM (90.9) begins a four-part series on "A Higher State: Why Public Higher Education Matters to Massachusetts." Reported by "Morning Edition" host Bob Oakes and WBUR reporter Curt Nickisch , the series will air on WBUR during "Morning Edition," 5- 9 a.m., through May 17.