Kagan: Broadcast Revenue Growth Led by Texas, Southwest & Western Markets
April 24, 2007 at 10:37 AM (PT)
A new study from SNL KAGAN, "Radio/TV Station Annual Outlook," forecasts revenue growth for TV and radio stations will be fueled by the CENTRAL GULF, PACIFIC and MOUNTAIN media regions as fast-growing TEXAS and CALIFORNIA help boost overall revenues.
The report projects radio revenues in rated markets to grow by a compound annual growth rate (CAGR) of 3.3% per year between 2006-2011, with unrated markets growing at a CAGR of 2.8%. Total radio revenue, including network revenue, is expected to increase at a 3.2% CAGR.
Competition from new media is pressuring broadcasters to better leverage their greatest asset -- their connection with the local community.
Television’s return over the same period is hampered by its odd/even cycle (with additional political and Olympic Games revenues in even years), as the current CAGR calculation is based on an ending odd year and beginning even year. KAGAN expects a five-year CAGR of 1.5% for local and national spot ads. Network comp is expected to decline from $267 mil. to $66 mil. during that time, a CAGR decline of 24.3%.
"Competition from new media is pressuring broadcasters to better leverage their greatest asset -- their connection with the local community," says SNL KAGAN analust MICHAEL BUCKLEY. "Broadcasters communicate with their local-market constituency better than any other media, but a fresh stage of monetizing those relations will require greater insight into the local market’s growth potential over the next several years."
Radio/TV Station Annual Outlook provides market-by-market projections, using multiple factors to calculate growth rates. For television these factors include retail growth rates, estimates for political revenue, Olympic Games viewership, World Cup soccer viewership, and changes in local economic factors. For radio, individual markets are based on estimated retail growth in core-based statistical areas, which best represent the separate radio markets. Estimates are also based on economic factors, spillover when TV inventory becomes tight due to political ads, and international sporting events.
For more information, go to www.kagan.com.