Goldman Sachs analyst Mark Wienkes surveys the radio landscape and finds it desolate. There’s only one radio company worth owning, he says: Emmis Communications (EMMS), albeit with a lower ($7) price target. And he continues to advise Sirius (SIRI) and XM (XMSR) shareholders to dump their holdings, regardless of whether the two pull off their merger:
With traditional radio under attack from more targeted and commercial-free alternatives for time, radio broadcasters are under increasing pressure to retain listeners and revenue. Similar to contracting newspaper readership and television viewership, radio listenership continues to decline across all demographics as listeners migrate toward other forms of media consumption, including not only ad-supported media such as Internet streaming radio but also consumer-supported media such as mp3 players and video games.
Weinke’s report shows radio lost share in most ad categories in 2007, including automotive, media, cosmetics and retail. And more fuel for recession-watchers: Entertainment spending in general is facing a “triple-whammy” of higher mortgage rates, housing price declines and tighter credit, creating a strong “consumer headwind.”
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