Radio advertising downturn strikes Chrysalis hard |
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Thu, 12 May 2005 14:30
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LONDON: Advertising revenues of Chrysalis, the owner of one of London's top commercial radio stations, declined about 88 % to £265,000, signalling the weakening of consumer confidence as well as the decreasing consumer spending in retail and other markets.
Announcing its profits for the half year till February, Chrysalis sent out a profit alarm following the warning given by GCap Media last week, which drew a rather dreary picture of the radio advertising market saying that advertising revenue had dropped by 17% in the last month. GCap Media was formed as Capital Radio and GWR recently merged and came together.
Chrysalis that owns the Heart 106.2 FM station also seemed to concur with GCap’s assessment of the market in the future and forewarned that it was possible for the annual radio profits to fall by even 6% since radio revenues had already plunged by 12.5% in the months of March and April.
| Chrysalis chairman, Chris Wright commented on the downturn in the market saying that consumer spending had drastically slowed down and therefore, radio advertisers were playing it safe. He said, ''It's all to do with worries about interest rates, higher taxes, house prices, consumer confidence and so on. Hopefully, the Government will take notice of these issues and do something about them.''
Furthermore, Chrysalis’s books unit has also been weathering rough storms as its losses have increased to £2.5m. Therefore, the children's books and promotional divisions of the book unit will now be sold and a former Harper Collins executive, Robin Wood, will be designated as the chief executive of the book unit.
Chief executive of Chrysalis, Richard Huntingford said, ''We want to get the business back to profitability,'' said chief executive. ''That will ultimately make it more attractive in the long term to a third party.'' He also stated that the radio industry had been one of the first media targets of the plummeting market trends in this year.
However, Chrysalis has planned to retain its music business, Chrysalis Music that contributed about 60% of the company’s first-half earnings.
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