Analyst raises radio revenue forecast


Two months after reiterating his estimate that US radio revenues would be up only 1.5% this year, BIA/Kelsey Vice President Mark Fratrik has revised his forecast upward. He’s now looking for an increase of 3.7% to bring the year in at $14.21 billion.

Fratrik reworked his numbers after hearing the Q1 results from broadcasters. However, he noted in a conversation with RBR-TVBR that the Q1 revenue gain for the entire industry reported by the Radio Advertising Bureau (RAB) was driven primarily by national, up 19%, while local gained only 2%. He pointed out that in RBR-TVBR’s reports on Q1 Wall Street conference calls, large market groups with a greater exposure to national businesses generally did better than groups with stations in medium and small markets.

There are still many US Census metros where unemployment is above 10%, Fratrik said, so the recovery is not being felt evenly. “We do the entire industry,” he noted. So long as unemployment remains high there will be many areas where the slump will continue. Also, he noted, the comps will not be as easy for radio in Q3 and Q4 as they are against the 2009 numbers for the first half of the year.

But yes, the economy is getting better and ad spending is improving, so the BIA/Kelsey analyst has gotten more optimistic about how 2010 will play out for radio. Looking further down the road, he’s predicting that radio revenues will finally be approaching 2008 levels (but not quite getting there) by 2014, although that will be partly driven by revenues from online and other off-air sources growing by a half billion bucks from what they were in ’08. (Chart below.)

RBR-TVBR observation: Just as many forecasters had to repeatedly revise their estimates downward last year, there have already been several adjustments upward this year. Anthony DiClemente and George Hawkey at Barclays Capital are still leading the pack with a forecast of 7.4%. That is, unless you count Entercom CEO David Field as a forecaster, with his prediction from last September that 2010 could be up 10% or more.

Radio Revenues
Source: BIA/Kelsey