BIAfn: Stagnant Station Revenues In 2006, But Upward Trend On Horizon
April 3, 2007 at 12:16 PM (PT)
The radio industry experienced a second year of less than 1% growth in revenues in 2006, achieving a mere 0.4% increase in station revenues, according to the estimates of BIA FINANCIAL NETWORK (BIAfn). According to the first edition of BIAfn’s quarterly Investing In Radio Market Report, the year closed with $18.1 billion in income, just slightly higher than the $18 billion recorded in 2005. BIAfn predicts the industry’s slump will begin to rebound in 2007 with a growth rate of 2.2%.
As the radio industry continues to adjust to its competitive role within the entertainment industry, we still see a slight improvement in radio industry growth.
"As the radio industry continues to adjust to its competitive role within the entertainment industry, we still see a slight improvement in radio industry growth," said BIZfn VP MARK FRATRIK. "The growth we have recently seen has primarily been in the mid-level and small markets and should continue, as these markets have responded better to the competitive challenges facing the radio industry."
BIAfn also notes in its Investing In Radio Market Report that 2006 was the first time in six years that radio transactions returned to volumes above $22 billion ($24.9b in 2000 and $22.9b in 2006) and the number of stations nationwide exceeded 1,000 (1,794 in 2000 and 2,100 by the end of 2006). The high level is connected to the announced privatization of CLEAR CHANNEL, but even without that sale it demonstrates overall that the industry is considered a smart investment in the long term.
"This is a period of strategic repositioning for many stations and ownerships groups," said FRATRIK. "Many groups are exiting and entering markets and regions where they feel they can increase station values. It's also a demonstration that industry participants feel competent they can generate future growth."