You can’t put lipstick on a pig. And you can’t make business year 2020 look any better for the commercial radio industry in the United States. It simply sucked.
And here’s a new chart that shows the big hurt that COVID-19 put on the industry.
“As anticipated, the radio industry took a very big hit in 2020 due to the pandemic and subsequent cutbacks in overall spending activity,” said BIA Advisory Services in its announcement.
“According to the first quarter edition of BIA Advisory Services’ 2021 Investing In Radio Market Report, over-the-air advertising revenues dropped to $9.7 billion, a 23.6% decline from $12.8 billion in 2019.”
Even hardened radio sales veterans may swallow hard when they hear that the industry’s revenue fell below the $10 billion mark.
BIA said digital ad revenues at stations “demonstrated their continued strength,” declining only slightly to $939 million in 2020 versus $1 billion in 2019.
Still, that’s the first time in memory when the digital portion of our radio industry’s revenue went south in a given year.
SVP and Chief Economist Mark Fratrik said in the announcement, “Local radio stations have been feeling the impact of new competition for the past few years; unfortunately, the pandemic just exacerbated the problem and it will take some time to recover.”
Even though those blue digital columns are still pretty small compared to the green OTA ones, he called online digital advertising radio’s “shining star.”
“Those broadcasting groups that have invested-in and oriented their companies toward digital will benefit faster from that foresight.”
The green lines in that chart start to grow again because Fratrik thinks 2021 total local radio revenue will be $11.7 billion, with about $1 billion from online revenues, a 9.7% increase.
Another measure of the economic lockup: BIA said station sales transactions fell “to levels that hadn’t been seen in years.”
It counted 534 stations sold in 2020 for an estimated value of $139 million, “a stark contrast from the 1,080 sold in 2011 for $1.1 billion.”