Managers might be forgiven for leaping at the smallest good news, but the phrase "slight recovery" jumps out of the latest revenue forecast for the U.S. commercial radio business.
It's from BIA Advisory Services, which anticipates a "slight positive trajectory beginning in 2011."
(click thumbnail)More immediately, the research company found that small and mid-size markets continue to perform better than larger ones and that "income from digital sources is quickly proving itself to be a part of radio's future."
While radio is still a viable medium, BIA's Mark Fratrik said, "Tough times will make owners think hard about what they are doing now and should be doing in the future. Technological advances such as online advertising, mobile device advertising, and other new-to-radio advertising could be a solution for offsetting declines in traditional radio revenues, especially in larger markets where these options could have a greater affect."
The year 2008 closed with $16.7 billion in U.S. commercial radio revenues overall, including online, for a decline of 8.5%. Within those numbers, smaller markets (50+) were down an average of 6.6%.
BIA estimates radio's online revenues at $247 million in 2008, up from just $67 million the year prior.
"Online revenue will increase an average of $132 million a year through 2013, a clear demonstration that as radio transforms into a cross-platform medium leveraging its local advertisers it will boost its revenues significantly."
For the current year, BIA expects revenue in the top 50 markets to fall 11%, and in mid-sized and small markets down just under 10%.
Also commenting on the company's findings, BIA's Rick Ducey called for radio stations to "accelerate their transformative process and recognize where they exist in the media ecosystem. To do this they must recondition their sales teams, think more locally, look at their advertisers through a different lens, consider migrating to other platforms, and start partnering with other organizations to provide more for their audience."