A modest 1.5% gain in revenue was banked by the radio industry in 2012 compared to the previous year. Research firm BIA/Kelsey blamed the sluggish economy and heightened local competition for the sluggish growth. And it sees only modest growth ahead.
In addition to picking up about $200M more over-air revenue, the study found an increase in digital revenue to $491M, representing 1.5% and 10.8% gains respectively.
The firm is looking for an overall gain of 2.3% to $14.7M in 2013, with another boost in digital revenue contributing.
“As the digital marketplace continues to rise in all sectors of advertising, radio is improving its listener engagement online and benefitting from the value of its web and mobile assets,” said Mark Fratrik, vice president and chief economist, BIA/Kelsey. “Overall, the industry is still recognized as an important part of the media mix as it continues to meander around, rising slightly with the rate of inflation but not keeping up with the economy.”
Radio still is working on getting back to 2007 revenue levels, when the over-air take was $17.9B. As the chart below shows, BIA/Kelsey does not see that happening over the next five years.
RBR-TVBR observation: We would take this report as a challenge. We would not concede that there is no possibility that over-air spot sales may not make it back to 2008 levels, much less 2007 levels, but we could understand that.
On the other hand, we would work as hard as possible to beat BIA/Kelsey’s modest digital prediction. That’s where the money is going, and there is no reason radio should not be waiting there to get it.
Compelling local content is the key – radio has boots on the ground in every market in America – a feat that national businesses simply cannot reproduce. Because of that, radio knows what’s going on around town and what its citizens are like, again in a way national companies simply cannot reproduce. Use it, over the air, and over every digital device capable of carrying your station’s stream to a loyal audience.