[Swprograms] [The Seattle Times: Radio boom times a thing of the past]

[Daniel Say <say@xxxxxx>]

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Subject: The Seattle Times: Radio boom times a thing of the past
X-URL: http://seattletimes.nwsource.com/text/2002190652_radioworries26.html
                              seattletimes.com
                           Business & Technology
     _________________________________________________________________

     Saturday, February 26, 2005 - Page updated at 12:00 a.m.

     Radio boom times a thing of the past

      By Seth Sutel, The Associated Press

NEW YORK -- For years, investors loved the radio business. Its
   sky-high profit margins were among the best in the media industry and
   changes in ownership rules a decade ago triggered a wave of merger
   deals. Prospects for growth seemed great.

   These days, Wall Street would rather hear something else. Growth in
   advertising has slowed, listeners seem to be switching off their
   radios in favor of iPods, and a new threat is emerging from
   commercial-free channels offered by satellite radio.

   This week, media giant Viacom disclosed that it wrote down the value
   of its radio business by $11 billion and the nation's largest radio
   chain, Clear Channel Communications, said it lost $4.7 billion in the
   fourth quarter, mostly due to an accounting charge.
[ 40 lines down]
   ...Yet even as Clear Channel and Viacom address their own issues,
   external threats are creeping closer. The phenomenal success of Apple
   Computer's iPod, which has already sold more than 10 million units,
   has some executives worried that many younger listeners are tuning out
   radio altogether.

   Satellite radio is also a potential rival. While the success of XM
   Satellite Radio and Sirius Satellite Radio is far from assured,
   investors have bid up their stocks over the past two years, while
   those of terrestrial radio companies have stagnated.

   XM and Sirius are involved in an increasingly aggressive bidding war
   for top talent. Sirius signed a $500 million deal with shock jock
   Howard Stern and a $108 million deal with Nascar, while XM reached a
   $650 million deal last fall with Major League Baseball. Still, the
   companies have just 4.3 million subscribers between them as of the end
   of 2004 and have racked up massive financial losses so far.

   Despite its challenges, terrestrial radio remains a staggeringly
   lucrative business. Viacom noted on Thursday that its radio unit
   earned 44 cents on each dollar of revenue in the fourth quarter of
   last year, versus 46 cents on the dollar in the same period a year
   ago. That's still a huge profit margin by any standard.

   Les Moonves, Viacom's co-chief operating officer, told investors and
   analysts on a conference call that radio was "obviously getting a lot
   of my attention." However, he also said: "It's a different world, but
   (radio) still produces a tremendous amount of cash for us."

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