BIA/Kelsey: Radio Industry revenues increasing in 2010.

The radio industry will begin to see slight broadcast advertising revenue increases in 2010, after several years of negative revenue changes and a very difficult 2009, according to BIA/Kelsey, advisers to companies in the local media space. BIA/Kelsey’s first edition of its quarterly “Investing In Radio Market Report” shows that 2009 closed with $13.7 billion in revenues for radio from broadcast and online sources, a decline of -18.4 percent from 2008. The company predicts industry revenues to hit $13.9 billion this year, an increase of 1.5 percent, but more importantly, the start of 2-4 percent annual growth rate over the next few years, including a predicted 16.5 percent compound growth rate from web and other online revenues.

“While the poor economy held it down momentarily, radio is coming back to demonstrate that it is an important advertising vehicle, particularly in local media markets,” said Mark R. Fratrik, Ph.D., Vice President, BIA/Kelsey. “The industry will continue to grow its online revenues in 2010 as increasingly more progressive radio groups recognize they are more than just over-the-air transmitters and begin to integrate cross-platform promotions with their broadcast and web operations.”

Dr. Fratrik also noted that the full year 2009 saw a continued slow pace in station transactions, with only $400 million in total value of radio stations that were sold.  The pace of acquisitions should increase in 2010 as operators will be attempting to get additional properties that offer efficiencies of scale to their operations.

“A lack of debt financing has been hampering the industry but we expect a modest rebound to begin in the early part of the second half of the year,” Fratrik said.

This slightly optimistic forecast is encouraging the radio industry to explore unique ways to improve revenues. However, this still relies on its ability to embrace maturing mobile and online vehicles and learning how to coexist with new and developing technologies.

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