DALLAS A decision to reduce advertising on its radio stations contributed to a 13 percent drop in Clear Channel Communications profits in the second quarter, the company said. Demand for advertising was also off, the company said.
The decision to reduce commercial time by 27 percent was designed to attract more listeners, the San Antonio-based company said. Listeners spent about 15 percent more time tuned to stations in the top 50 markets after the reduction in commercials, the company said.
John Hogan, chief executive of Clear Channel's radio division, said advertisers were responding positively to a decision to use more 30-second spots and fewer 60-second spots.
Ratings for Clear Channel stations in the top 25 markets rose 3 percent in the "spring book," which tracks audience growth, the company said in an earnings conference call. Ratings in the top 50 markets rose 3.9 percent. Revenue, however, fell 6.5 percent after the move to fewer commercials, the company said.
A shift in ad spending toward cable television, the Internet and outdoor signs also affected revenue, the company said.
Clear Channel, the world's largest radio broadcast company, plans to sell shares in its billboard unit and spin off its concert division.