BIA/Kelsey Sees Slight Increase in Radio Industry Revenues for 2010
as Some Markets Exceed 7 Percent Growth
Growth will come from utilization of OTA assets with mobile and online
CHANTILLY, Va. (Aug. 25, 2010) - The radio industry will see its over-the-air
revenues in 2010 climb 4.4 percent over last year to $13.93 billion,
with another $459.3 million in revenues coming from digital and online
sources, according to a revised forecast issued today from BIA/Kelsey,
adviser to companies in the local media space. This uptick, reported
in the third edition of BIA/Kelsey’s quarterly "Investing
In Radio® Market Report,” comes from collective increases
across the country in the various radio markets. Stations in top 10
market cities will average a 6.26 percent increase from 2009, while,
notably, San Francisco and Philadelphia can expect overall revenue
growth of eight percent due primarily to an increase in spending by
national advertisers.
Scattered cities in a number of markets will
hit 7.5 percent or greater growth this year,
including Miami-Ft. Lauderdale-Hollywood, Florida (7.5 percent); Denver,
Colorado (8.5 percent); Syracuse, New York, Little Rock, Arkansas,
and Springfield, Massachusetts (8 percent); and New Haven, Connecticut
(7.7 percent). Markets 11 to 25 will raise an average of 4.05 percent,
while others will see average revenue increases of between 2.73 percent
and 3.66 percent.
“We’re glad to see positive growth in most U.S. radio
markets but still feel there remains enough uncertainty in the country’s
overall economic performance to tread carefully stepping into the second
half of the year. Bear in mind, too, that the third and fourth quarters
of 2009 were better than the first half of that year, so we do not
expect the change to be that large by the end of this year,” said
Mark Fratrik, Ph.D., vice president, BIA/Kelsey. “Radio’s
performance this year will largely be driven by the success of the
top markets; however, its impact will resonate to smaller ones.”
The
chart below represents BIA/Kelsey’s updated five-year forecast
for the radio industry:
BIA/Kelsey also notes that the small volume of radio station transactions
this year have been a function of the revenue and profit decline experienced
in recent years and a lack of bank financing. As of July there were
only $168 million in transactions compared with $207 million in 2009.
“Station
owners are hesitant to sell at today’s lower multiples, while
potential buyers’ view the growth potential conservatively in
light of the economic uncertainty. Additionally, the inability to get
sufficient debt financing to lower the cost of capital leaves the transaction
marketplace stuck in neutral,” Fratrik said. BIA/Kelsey’s
valuation techniques and access to historical market data can help
buyers and sellers trying to assess value in the current environment
and lenders evaluating the sector.
Investing In Radio®
A comprehensive profile of each of the 291 Arbitron-rated markets
with historic and projected market demographic and financial statistics
is available in the second edition of the quarterly “Investing
In Radio® Market Report” and the new 2010 “Investing
In Radio® Ownership Report” published by BIA/Kelsey. Both
publications are 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 at http://www.bia.com/publications_reference_radio.asp.
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 e-mail info@bia.com.
About BIA/Kelsey
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.bia.com and www.kelseygroup.com. The company's blogs are located at http://blog.bia.com/bia/ and http://blog.kelseygroup.com/, and it can be found on Twitter through http://twitter.com/BIAKelsey.
