Harker Research: Trading Broadcast Dollars For Digital Dimes
September 14, 2010 at 4:45 AM (PT)
The folks at HARKER RESEARCH are blogging again, and this time they're commenting on digital revenues. "If you put a dollar bill into one of those change machines and it gave you back a dime and a nickel, you might be a little upset," wrote HARKER. "That's what the digital change machine is doing to radio right now. Drop your broadcast dollar into the machine, and you’ll get 15¢. And you may get even less."
HARKER points out that things are worse for newspapers. "While radio and television appear on the mend, newspaper continues to bleed. Last year newspaper print’s revenue declined another $9.9 billion. In the second quarter of 2010 newspaper print revenue dropped 8% more. With print’s future looking so bleak, newspaper is desperately trying to remain relevant in a digital world and replace print dollars with digital dollars."
How Does This Affect Radio?
"Last year local radio’s revenue declined $3.3 billion. Radio’s digital revenue last year was $480 million," continues HARKER. "The digital change machine gave radio a little less than 15¢ for every broadcast dollar it lost. In the latest quarter, broadcast revenue grew 6% compared to last year, while digital grew four times as fast. Yet only 4¢ out every dollar of local radio revenue came from digital."
Summing up, HARKER writes, "This is the fundamental problem radio faces as it adapts to a digital world: A digital change machine that dispenses pennies on the dollar."
Read the full blog here.