Radio Industry Revenues continue to slide downward in 2008.

By the end of 2008 the radio industry will have experienced its second year of negative growth by tripling station revenue losses to -7 percent, according to the estimates of BIA Advisory Services. BIA’s fourth edition of the quarterly Investing In Radio Market Report also reports that 641 stations have been sold in transactions valued at $698 million from January through October 2008, a -34 percent change from the same period in 2007 in the number of stations sold and a -44  percent in the value. When the year ends, this will be the lowest level since 1992.

BIA estimates radio station revenues will hit $16.7 billion in 2008, the lowest in more than five years and the beginning of a downward spiral that will go as low as $15 billion next year before possibly rebounding in the next decade. Investing In Radio Market Report illustrates that revenue percentages will fall another 10 percent in 2009 yet will have a chance for positive growth by 2010.

“The already low forecasts for growth in radio coupled with a generally dismal economic climate have also placed a particular strain on the valuations radio stations need to maintain their financing or to be sold,” said Mark R. Fratrik, Ph.D., Vice President, BIA Advisory Services. “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.”

“Last year’s period of strategic acquisitions may have led to this year’s shutdown of any significant transactional activity,” said Dr. Fratrik. “There exists a wait and see perspective from sellers and buyers simply because of current station valuations and the hope that things won’t get worse.”

Radio’s future relies heavily on its embrace of new media and mobile technologies and local advertisers. This was recently the subject of a panel led by Rick Ducey, BIA’s chief strategy officer, at the November “Interactive Local Media Conference,” organized by BIA’s The Kelsey Group (www.kelseygroup.com) The consensus among the panelists was that online and traditional media are blending together, offering a tremendous opportunity to capitalize on a multiplatform approach to delivering content to mass and niche audiences. For example, the panel discussed how CBS Radio, NBC and Comcast collaborated on a successful Great Used Car Sale Campaign in Chicago utilizing the different forums these competitive firms offer. The 10-day event generated 26 million online impressions. Going forward, radio can certainly embrace similar strategies to extend its presence in more sophisticated ways.
BIA’s fourth edition of Investing In Radio Market Report has introduced information on shares for 10 markets that now have audience estimates from Arbitron’s Portable People Meter (PPM). IIR also contains detailed information on HD multicast stations in each market. The final edition of the year includes BIA’s forecast for 2009 with a detailed recap of 2008.

For more information at http://www.bia.com