BIA/Kelsey: Digital Revenues for U.S. Radio Continue to Rise
March 28, 2017
The digital advertising income of U.S. radio stations continued to grow in 2016, as the industry reported a 14 percent increase in online revenues, compared with only a slight increase in over-the-air income, according the first quarter edition of BIA/Kelsey’s 2017 Investing In Radio® Market Report. News WTOP/Washington, DC was the top revenue-generation station, taking in $67.5 million in advertising revenues as the overall industry over-the-air advertising revenue stayed relatively flat at around $14.1 billion. News/Talk stations experienced an overall improvement in 2016, likely due to the presidential year.
"In an age where consumers have many entertainment choices, local radio maintains its strength and popularity in the marketplace among national and local advertisers," said Mark Fratrik, SVP/Chief Economist at BIA/Kelsey. "Our forecast also notes that by 2021 we expect radio to surpass newspapers and become the fifth largest media category among advertisers."
Fratrik added that the prospects for 2017 remain similar, with OTA revenues increasing less than one percent and online about 12 percent. BIA/Kelsey forecasts that the radio industry’s revenue in 2017 will reach a total of $14.9 billion, representing 10.5 percent of its estimated $148.8 billion U.S. local advertising marketplace.
Radio transactions and station sales are encouraging to BIA/Kelsey, thanks to the Entercom-CBSRadio agreement. After regulatory approval, the industry is expected to experience renewed activity due to the sale and realignment in some markets. In 2016 the market was slow, with 556 station sales and nearly $500 million in transactions across the industry.
"We are encouraged by the Entercom purchase and how it will affect the competitive landscape," Fratrik said. "The combined group will be closer to the size of industry leader iHeartMedia and we expect the transaction to have a positive effect on radio since both organizations are progressive and well-run."