Back in April, BIA Vice President Mark Fratrik was forecasting that radio revenues would decline 3.1% this year. But things have gotten so much worse in the ensuing months that BIA is now expected 2008 revenues to be down 7% — with an even worse drop of 10% in 2009. Fratrik is finally forecasting growth, but only modest growth, in 2010.
“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,” Fratrik said as he issued his forecast update.
After dropping 2.2% in 2007, BIA now sees US radio revenues dropping 7% in 2008 to $16.7 billion. Then look for an other drop of 10% to $15 billion in 2009 – a huge negative swing from the previous forecast that revenues next year would decline only 0.2%.
From that low point, a tiny recovery of 1.5% is forecast for 2010. That’s actually an improvement over the 0.9% growth that Fratrik had previously forecast, but comes from a much lower trough the previous year. For 2011 the new forecast is 2.5%, up from the previous 1.8%. And for 2012 the BIA forecast is for radio revenue to grow 3%, slightly stronger than the previous forecast of 2.5%.
RBR/TVBR observation: Forecasting has certainly been a challenge this year, with the economy changing so fast – almost all to the worse – that it has been like throwing darts at a moving target. Suffice it to say, at this point it’s hard to forecast a number too low and easy to worry that a sadly negative forecast might prove to be overly optimistic.