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. (Dec. 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.
