Radio Revenues to Deteriorate in ’08, Some Hope on ’09 Horizon

April 9, 2008

This article is included in these additional categories:

Media & Entertainment | Radio

The radio industry experienced a fourth consecutive year of disappointing performance in 2007, achieving a 2.3% decrease in radio station revenues from 2006 levels, according to estimates by BIA Financial Network.

2007 revenue totaled? $17.9 billion, slightly lower than the $18.1 billion consecutively recorded in 2006, 2005 and 2004, according to BIAfn’s first edition of the quarterly Investing In Radio Market Report.

BIAfn predicts that radio revenues will be down as much as 3.1% in 2008, due in large part to the economy:

bia-radio-revenue-growth-rates-2002-2012.jpg

But revenues will begin a rebound in 2009, it said, as the radio marketplace improves and the industry starts to see increased income from digital opportunities online and through the airwaves.

The top five markets by 2007 revenue were Los Angeles ($1.1 billion), New York ($755 million), Chicago ($555 million), Dallas-Ft. Worth ($416 million), and Atlanta ($398.5 million).

BIAfn notes that small and midsize markets have retained some stamina due local advertisers’ recognition of radio stations’ value. Examples include Wilkes-Barre, PA (an 8% increase), Des Moines, IA (a 6% increase) and Poughkeepsie, NY (a 5.4% increase). Parts of Texas have also remained strong, a reflection of their local economies.

“While it has been a rough several years for radio the efforts it is making to engage its listeners online and through the digital airwaves will hopefully come to fruition in the next few years,” said Mark R. Fratrik, Ph.D., VP, BIA Financial Network. “If slow and steady wins the race, then the radio industry will prove its continued value as it begins rolling out new programming and offerings to its vast listenership.”

Radio Station Sales

Radio transactions in 2007 were led by sales in medium and small radio stations, as well in unrated markets, BIAfn also noted, citing the first edition of Investing In Radio Market Report for 2008:

bia-radio-station-deals-by-rated-market-size-2005-2007.jpg

More than 316 radio stations were sold in markets ranked 201 and above and nearly 500 radio stations in unranked markets were sold.

“Transactions in 2007 demonstrated continued strategic repositioning in the market by stations and ownership groups,” said Fratrik. “Most recognize the potentials for future growth and are positioning themselves now in markets and regions where they see long-term station values.”

About the data: The above information is based on a comprehensive profile of all 299 radio stations markets in the first edition of the quarterly Investing In Radio Market Report and the new 2008 Investing In Radio Ownership Report published by BIAfn. 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.

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This