BIA/Kelsey Local Media Index

Local Media Trailed Stock Market In 2011

Stocks of publically traded local media companies performed worse than the overall stock market last year, dropping 18.7% for the year, according to BIA/Kelsey's Local Media Index.
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NetNewsCheck,

Local media companies walked a rough road in 2011, but there are some signs that 2012 could be a little brighter, according to BIA/Kelsey.

Stocks of publically traded local media companies performed worse than the overall stock market last year, dropping 18.7% for the year, according to the consulting firm’s Local Media Index, which tracks the $2.2 trillion local media sector.

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“Last year’s poor performance of the LMI was caused by deep concerns over the health of the global economy in Q3 and the belief that businesses would severely cut back on their advertising spending,” BIA/Kelsey VP Mark Fratrik said in a statement.

BIA/Kelsey attributed the loss to “a secular shift toward growth in digital revenue as an increasing component of a fairly flat local advertising economy.” Companies that were more involved in the digital space fared better than their counterparts.

Weaker segments, such as newspapers and Yellow Pages — falling 27.8% and 77.5% respectively — dragged down the entire LMI.

Things did brighten slightly during the fourth quarter, with advertising and search (up 8%), diversified media (7.8%), broadcast TV (6.1%) and radio showing late upticks, providing some optimism in the new year. “While the last quarter of 2011 saw a rebound in media stocks, the drop-off had been too significant to overcome,” Fratrik said.

BIA/Kelsey predicts local media companies’ prospects will improve along with the economy in 2012. Political advertising during a presidential election year should help boost television and radio stations. And the increase of the number of digital platforms will boost advertising opportunities significantly, according to the firm.

BIA/Kelsey will present its 2012 outlook during a free webinar on Thursday, Jan. 19, titled, “Looking Ahead to a Year of Transition and Transformation for Local Media.” Visit BIA/Kelsey’s site for more information.

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