Report forecasts U.S. radio over-the-air revenues in 2011 to reach US$14.4B, up 1.2% year-over-year; digital/online revenues to be up 15% to US$479M
November 29, 2011
– With economic concerns affecting advertising spending across all local media, the radio industry has experienced only a marginal increase in over-the-air revenues in 2011, ending the year with projected revenues of $14.1 billion, a 1.2 percent increase over 2010. The industry realized increases in digital/online revenues and will end the year at $479 million, a 15 percent increase over 2010. In the fourth edition of BIA/Kelsey’s quarterly “Investing In Radio® Market Report,” the company also reports the number of transactions was down slightly, 0.2 percent, but the value of these station sales increased noticeably.
“It’s been a year of nominal growth for the radio industry, as advertisers remain cautious about spending their ad dollars in this sluggish economy,” said Mark Fratrik, vice president, BIA/Kelsey. “On the upside, the radio industry has maintained its value, both from a dollar and sales volume perspective. Sales across the country have been steady and the total value of sales has increased to over $4.2 billion through October. All of this together underscores radio’s continuing ability to effectively reach and monetize local audiences via its proven business model. This is a positive situation considering the considerable dollars at stake during next year’s election.”
The chart below represents BIA/Kelsey’s five-year forecast for the radio industry:
Looking ahead to 2015, the “Investing In Radio® Market Report” forecasts radio revenues to grow a moderate 3.5 percent in 2012, due to the election year and the continued growth of the online/digital segment. Radio’s online/digital revenues will grow to $479 million in 2011, up from $405 million in 2010. The five-year outlook indicates radio’s online/digital revenues will reach $758 million by 2015, representing a 13.4 percent compound annual growth rate (CAGR).
Number and $ Value of Radio Stations Sold by Region: January-October 2011
Fratrik highlighted the industry’s continuing integration of digital and traditional assets, which is giving stations opportunities to attract advertisers through online, social media and mobile channels and drive on-air audiences online. In particular, stations have been launching deals into their offerings.
“Local radio stations are a natural participant in the deals space. We’ve been told that you can literally see the sales meter jump when there is an on-air mention of a deal,” says Peter Krasilovsky, vice president, BIA/Kelsey. “Stations typically participate in deals with links to their websites, or in partnership with other deals sites.”
To closely report on the growth of online and digital activities across the industry, the “Investing In Radio” reports include individual market-level online advertising revenue estimates based on BIA/Kelsey’s work with broadcasters and industry resources.
Investing In Radio®
A complete profile of each of the 282 Arbitron-rated markets with historic and projected market demographic and financial statistics is available in the fourth edition of the quarterly “Investing In Radio® Market Report.” The publication is part of the “Investing In” financial guide series that includes estimated advertising revenues, technical data, ownership and acquisition information, and more for every market. Information on these publications is available on the company’s website.
BIA/Kelsey also publishes investment reference guides and provides data services for the television and newspaper industries. For more information, call (800) 331-5086 or email email@example.com.
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research, Continuous Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at www.biakelsey.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey).