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Radio Revenue to Climb 6.4% This Year, SNL Kagan Believes

'Radio station ad revenue will recover to $17.1 billion in 2010, the highest annual increase since 2003'

Compared to recent years, an increase of 6.4% in U.S. radio sales revenue might feel like the gravy train. But that’s the latest radio revenue projection for 2010 from research firm SNL Kagan.

It is hosting a financial conference this week in New York, and has issued its latest outlook for the year for both radio and TV revenue. “TV and radio station advertising revenues are poised for recovery, with 2010 ad revenues expected to climb 14.3% and 6.4%, respectively,” the company stated. “While the massive declines experienced by both industries in 2009 create a favorable year-over-year comparison, increased spending on political and auto advertising, tighter inventory and growing rates are also expected to drive revenues.

“After dropping 17.7% to $16.0 billion in 2009, SNL Kagan projects radio station ad revenue will recover to $17.1 billion in 2010, the highest annual increase since 2003,” it continued. (That’s a half-billion more than it had forecast for 2010 a year ago.) “This figure includes online ad spend for stations, which is projected to gain 15.0% to $552 million. National spot and local ad revenues are expected to gain 17.0% and 4.3%, respectively. SNL Kagan projects radio station ad revenue will reach $19.8 billion by 2016.”

The company projects TV station ad revenue (including online) will reach $19.8 billion in 2010, up from $17.3 billion in 2009, when industry ad revenue hit the lowest level since 1995. “Total TV station revenue, including that derived from retransmission fees, is expected to reach $20.9 billion in 2010, a number SNL Kagan predicts will grow to $25.4 billion by 2016.”

Senior Analyst Robin Flynn noted in the announcement that “The bounce-back in ad revenues, combined with other positive trends, such as growing digital dollars, have reassured investors, who have bid radio station stocks up 36% and TV station stocks up 26% year-to-date.”

How does this fit with other recent market data? The most recent report from the Radio Advertising Bureau showed a 6% overall increase in actual commercial radio revenue in the first quarter. And BIA/Kelsey’s most recent projection was that total radio industry revenues this year would hit $14.21 billion, an increase of 3.7%.