|
RADIO INDUSTRY REVENUES CONTINUE TO SLIDE DOWNWARD IN 2008;
BIA EXPECTS -7% GROWTH,
MOVING LOWER IN 2009
Revenue Decrease More Dramatic
Than Last Year;
Online Digital Strategies Offer Potential for Industry
Turnaround
CHANTILLY, VA. December 2, 2008
–
By the end of 2008 the radio industry will have experienced
its second year of negative growth by tripling station
revenue losses to -7 percent, according to the estimates of
BIA Advisory Services (http://www.bia.com),
a leading financial and strategic consulting firm serving
the media and communications industries. BIA’s fourth
edition of the quarterly
Investing In Radio® Market Report also
reports that 641 stations have been sold in transactions
valued at $698 million from January through October 2008, a
-34 percent change from the same period in 2007 in the
number of stations sold and a -44 percent in the value.
When the year ends, this will be the lowest level since
1992.
BIA estimates radio station revenues will hit $16.7 billion
in 2008, the lowest in more than five years and the
beginning of a downward spiral that will go as low as $15
billion next year before possibly rebounding in the next
decade. Investing In Radio® Market Report
illustrates that revenue percentages will fall another 10
percent in 2009 yet will have a chance for positive growth
by 2010.
“The already low forecasts for growth in radio coupled with
a generally dismal economic climate have also placed a
particular strain on the valuations radio stations need to
maintain their financing or to be sold,” said Mark R.
Fratrik, Ph.D., Vice President, BIA Advisory Services. “The
waters are very rough right now but the general
profitability of radio keeps us optimistic that the industry
will weather the storm providing it strategically invests in
its online presence, which will prove to be its rescue as ad
budgets continue to shift to more
measurable online media.”
The chart below shows historic and projected radio revenue
growths in Arbitron markets from 2002 through 2012,
including BIA’s expectations for the coming four years
“Last year’s period of strategic acquisitions may have led
to this year’s shutdown of any significant transactional
activity,” said Dr. Fratrik. “There exists a wait and see
perspective from sellers and buyers simply because of
current station valuations and the hope that things won’t
get worse.”
Radio’s future relies heavily on its embrace of new media
and mobile technologies and local advertisers. This was
recently the subject of a panel led by Rick Ducey, BIA’s
chief strategy officer, at the November “Interactive Local
Media Conference,” organized by BIA’s The Kelsey Group. The
consensus among the panelists was that online and
traditional media are blending together, offering a
tremendous opportunity to capitalize on a multiplatform
approach to delivering content to mass and niche audiences.
For example, the panel discussed how CBS Radio, NBC and
Comcast collaborated together on a successful Great Used Car
Sale Campaign in Chicago utilizing the different forums
these competitive firms offer. The 10-day event generated 26
million online impressions. Going forward, radio can
certainly embrace similar strategies to extend its presence
in more sophisticated ways.
BIA’s fourth edition of
Investing In Radio®
Market Report has introduced information on
shares for 10 markets that now have audience estimates from
Arbitron’s Portable People Meter (PPM).
IIR also contains detailed information on HD multicast
stations in each market. The final edition of the year
includes BIA’s forecast for 2009 with a detailed recap of
2008.
A comprehensive profile of all 299 radio markets is
available in the fourth edition of the quarterly
Investing In Radio® Market Report published
by BIA. The publication is part of the Investing In
financial guide series that includes market trend
analysis, demographic and economic overviews, competitive
overviews, technical data, ownership data, pending and
completed transactions, and Arbitron ratings. Information on
these publications is available on the BIA website at
http://www.bia.com/publications_reference_radio.asp.
BIA also publishes investment reference guides and provides
data services for the television and newspaper industries.
For more information, call 800.331.5086 or email
info@bia.com.
About BIA Advisory Services,
LLC
BIA
Advisory Services, LLC, a subsidiary of BIA Financial
Network, provides research, data, analysis, and financial
and strategic consulting to media, telecommunications,
technology, directory publishing, and local search
companies. BIA Advisory Services includes: The Kelsey Group,
experts in traditional and online local media and
advertising; BIA Research, providers of competitive and
comparative market information and analysis through data
services, specialized reporting, engineering studies and
mapping; and, BIA Consulting, specialists in business
intelligence and corporate growth strategy, and the nation’s
leading communications appraisal and valuation firm.
Additional information is available at
www.bia.com. BIA’s blog is located
http://blog.bia.com/bia/ and the company can be
found on Twitter
http://twitter.com/BIAfn.
|
