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Nielsen and BIA/Kelsey Report on Radio’s Performance in 2017

Good news from Nielsen, but BIA/Kelsey report is a cautionary tale for those counting on digital revenue

Like reported sightings of Bigfoot, and fanciful stories regarding unicorns, claims over the death of over-the-air radio aren’t based in reality, at least according to Nielsen.

The company reports that each week, more Americans tune into AM/FM radio (93%) than watch television, or use smartphones, tablets or computers. “At the same time, digital streaming offers consumers even more ways to listen across many of those same devices,” they write. “Audio plays a central role in the daily lives of hundreds of millions of consumers. Broadcast radio specifically continues to profoundly enrich the lives of listeners and create value for advertisers.”

That’s the good news. Let’s also examine the news that’s not so good. According to BIA/Kelsey, the digital advertising income of U.S. radio stations showed a 9.7% increase year over year, but during the same period over-the-air radio showed a decline of 2.0%. (More details are shown in the first quarter edition of BIA Advisory Services’ 2018 Investing In Radio Market Report.)

Overall the industry experienced a 0.2% drop from 2016 to end the year at $13.87 billion.

“Although local radio stations are still important players in their local markets, we do not expect the over-the-air advertising revenue of U.S. radio stations to grow much this year or in the near future,” said Mark Fratrik, SVP and Chief Economist, BIA Advisory Services. He said the number of new audio and entertainment sources will provide continued competition for radio, which of course has a negative effect on ad revenue.

The game is still ours to lose. “It’s an aggressive environment that competes for audiences with local radio,” Fratrik writes.

HD radio technology is also mentioned in the report. “The radio industry is attempting to build out digital channels to reach local communities, but they are also focused on overall platform improvements,” writes Fratrik. “Opportunities for local radio stations include the further adoption of HD Radio technology to transmit their programming and add subchannels for additional programming. With car manufacturers including HD Radio receivers in their new cars, radio has a fresh opportunity to impress advertisers and consumers.” According to BIA data, as of January 2018, 211 AM and 1,980 FM stations were broadcasting an HD Radio signal.

The same report also said that another “strong opportunity” being employed is the increased use of FM translators for rebroadcasting AM signals, and that new technologies including NextRadio open up new avenues for revenue growth.

Sorry. No data so far.