BIAfn: Top 25 Radio Groups Won't Top 2.3% Revenue Growth In '06
June 9, 2006 at 1:50 PM (PT)
According to the second edition of the 2006 "Investing In Radio Market Report" issued today by BIA FINANCIAL NETWORK (BIAfn), the radio industry Top 25 largest groups are not expected to experience revenue increases beyond 2.3% in 2006, even with small pockets of growth in several markets. In terms of revenue, CLEAR CHANNEL continues to dominate the radio industry, with 1,171 stations and 2005 revenues topping $3.5 billion, followed by CBS RADIO with 179 stations and $2.24 billion in revenue.
"Radio continues to experience sluggish growth and is not keeping pace with growth in the economy," said BIAfn VP MARK R. FRATRIK, Ph.D. "Despite this bleak outlook, radio is by no means a dying medium; it just has challenges. Some markets are actually rebounding and performing well."
That said, BIAfn forecasts above average growth in several markets this year. In particular, PHOENIX has shown promise since early 2006, and is expected to see revenues rise as much as 8%. Smaller markets that have distinguished themselves include: TULSA, OK (6.5%), LAFAYETTE, LA (5.5%), AUGUSTA, GA (5.5%), and LAKE CHARLES, LA (6%). On the flip-side, below average markets include SAN JOSE (0%), NORFOLK-VIRGINIA BEACH-NEWPORT NEWS (-2.5%), NEW ORLEANS (1.5 percent), WILKES BARRE-SCRANTON (-1.5%).
"We can guess why stations are doing poorly -- iPods, clutter, Internet -- so when we see any of them finish the year with greater than 2.5 percent growth, we know that they have been successful in retaining or attracting certain demographics like younger people to the medium or expanding their own advertising based content distribution," added FRATRIK. "That formula might be taking the form of multi-casting, podcasting, a change in format, better promotions, or even increasing partnerships with locally-based music venues and musicians or other content providers and distribution outlets."
FRATRIK continued, saying, "CBS RADIO’s recent announcement that it will be exiting 10 markets might be the most obvious illustration that some radio groups are re-evaluating their assets and that 2006 may prove to be a year of transition. “Stations will continue to find buyers intending to put those frequencies to good use. Whether these transitions will have an overall positive affect on the industry remains to be seen."