Va. (Jan. 17, 2012) - Stocks of publicly held local media companies
performed worse last year than the overall stock market, falling 18.7
percent, according to BIA/Kelsey's Local Media Index
(LMI). The LMI tracks the local media sector, with a market
capitalization of $2.2 trillion, to better reveal underlying dynamics in
both secular and cyclical industry trends.
concludes, overall, there is a secular shift toward growth in digital
revenues as an increasing component of a fairly flat local advertising
economy. As local media companies shift their ownership portfolios along
with their sales and product strategies, eventually the results are
reflected in share prices, with local media companies more involved in
the digital space benefiting most.
subsectors, such as Yellow Pages and newspapers, brought down the LMI,
with those sectors' indices dropping by 77.5 percent and 27.8 percent,
of the LMI that were positive last year and hold equal, if not greater,
promise in 2012 include online advertising and search (8.0 percent),
diversified media (7.8 percent), broadcast television (6.1 percent) and
radio (2.1 percent).
Local Media Index is showing the values of local media companies can be
more volatile to the perceptions about the future of the economy and
local ad spending than the S&P itself, a fact that would not reveal
itself through other indices," said Mark Fratrik, vice president,
BIA/Kelsey. "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. While
the last quarter of 2011 saw a rebound in media stocks, the drop-off
had been too significant to overcome."