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Fratrik: News Stations Lead in Integrating Platforms

BIA/Kelsey updates its five-year radio revenue forecast

Mark Fratrik thinks radio is “continuing to prove itself as a valuable local advertising medium, particularly as the integration between over-the-air and online improves.” He said news stations in particular are leaders in many markets “by creating comprehensive over-the-air and digital portfolios of ad products and formats.”

The BIA/Kelsey exec added that observation as the research firm predicted that U.S. radio industry revenues will reach $14.6 billion in 2012, a 3.5 percent rise over last year.

National elections should help with station revenue. Further, “Online radio ad revenues will grow from $505 in 2012 to $767 million in 2016,” the company believes. “Online revenues will continue to grow at a fast pace, becoming an important portion of station income.”

An overall increase of 3.5% would be an improvement over 2011. BIA/Kelsey thinks over-the-air local radio revenues for the past year were $14.1 billion, up a fraction of a percentage point from the year before. But online revenues increased more than 15%, to $439 million.

Portland, Maine, saw the largest percentage increase in revenues in 2011, up about 23% to $25.4 million. Other markets with notable percentage increases were Worcester, Mass.; Ann Arbor, Mich.; and Providence-Warwick-Pawtucket, R.I.

Despite big station deals (think Hubbard/Bonneville and Cumulus/Citadel), station transaction volume was only $4.3 billion in 2011 from 1,080 transactions. Fratrik said the improving economy is likely to increase the number of station sales in 2012.

The chart shows BIA/Kelsey’s five-year forecast for radio.