CHANTILLY, Va. (March 26, 2009)
– While declining revenues in radio seem reason to write the industry’s epitaph, there are clear indications that small and mid-size markets are performing better and that income from digital sources is quickly proving itself to be a part of radio’s future. According to BIA Advisory Services’ first edition of its quarterly Investing In Radio® Market Report, 2008 closed with $16.7 billion in revenues (including online revenues), a decline of -8.5 percent from 2007. However, BIA’s data indicates that markets that are 51 and over were down only an average of -6.6 percent. BIA’s
research also charts that the industry had online revenues of $247 million
in 2008, up $67 million from 2007.
Online revenue will
increase an average of $132 million a year through 2013, a clear
demonstration that as radio transforms into a cross-platform medium,
leveraging local advertisers will boost revenues significantly.
BIA predicts that the industry will start a slight positive trajectory beginning in 2011.
In 2009 the top 50 markets will see revenue declines in the -11 percent range, while mid-sized and small markets (ranked 51 and higher), such as Grand Junction, CO and Grand Forks, ND-MN, and Odessa-Midland, TX will be slightly lower at -9.64 percent. BIA sees the smaller markets as continuing to provide services to their local advertisers and maintaining their presence in the local media marketplace.
“Despite all appearances, radio is still a viable medium as evidenced through listener numbers, revenue growth in certain markets, and the popularity of specific formats,” said
Mark R. Fratrik, Ph.D., Vice President, BIA Advisory Services. “Tough times will make owners think hard about what they are doing now and should be doing in the future. Technological advances such as online advertising, mobile device advertising, and other new-to-radio advertising could be a solution for offsetting declines in traditional radio revenues, especially in larger markets where these options could have a greater affect."
The
chart below shows the percentage of changes in radio revenues from the past
five years and BIA’s expectations for the coming five years.
The chart below shows
that online revenue for the radio industry will increase an average of $132 million a
year through 2013.
The struggles of the radio industry began a few years ago but have been exacerbated by changing technologies and the recent problems in the financial markets. Station owners have been left to grapple with both strategic and tactical decisions for the long and short term in order to remain solvent.
“While expense cutting may be necessary in this economy, radio broadcasters must accelerate their transformative process and recognize where they exist in the media ecosystem,” said
Rick Ducey, chief strategy officer of BIA. “To do this they must recondition their sales teams, think more locally, look at their advertisers through a different lens, consider migrating to other platforms, and start partnering with other organizations to provide more for their audience.”
BIA has created a new conference, “Winning Media Strategies,” to discuss critical topical issues for broadcasters and provide them with a tangible means to improve their operations. In a three-day program, May 20-22, 2009 in Washington, D.C., more than 50 speakers will discuss new technologies, shifting consumer demographics, media usage trends, new competition, and how different business models are driving the changing media ecosystem. Additional details and registration information is available at:
http://www.bia.com/WMS.
A comprehensive profile of all 302 radio markets is available in the first edition of the quarterly
Investing In Radio® Market Report and the new 2009 Investing In Radio® Ownership Report published by BIA. Both publications are 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.
