Local Radio Stations Now Rank Fifth Among Local Advertising Platforms As Overall Ad Revenue Dips in 2017: BIA/Kelsey

Overall radio ad revenue dipped to $13.87 Billion in 2017, according to new research from BIA/Kelsey. Two new BIA reports examine the state of the radio industry to explain the effect of new audio competition, audience levels, programming trends, transactions and provide market profiles of Nielsen Audio-rated stations.

The digital advertising income of U.S. radio stations had a decent rise in 2017, as the industry reported a 9.7 percent increase in online revenues, compared with a slight decline in over-the-air income of 2 percent, according to the first quarter edition of BIA Advisory Services’ 2018 Investing In Radio Market Report.

“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. “There is an unprecedented number of new audio entertainment and information sources and new advertising platforms competing with radio, including many that are unregulated. It’s an aggressive environment that competes for audiences with local radio.”

Overall, the industry experienced a 0.2 percent drop from 2016 to end the year at $13.87 billion. In terms of transactions, the volume was the highest since 2011, with 752 stations being sold at a value of $3.32 billion.

BIA examined the hurdles and continuing value of the radio industry in the newly published state-of-the-industry report, "Market Assessment and Opportunities for Local Radio: 2018-2022". The report includes analysis on where radio is positioned in the competitive landscape, the effect of digital competition and the variety of new revenue streams the industry is embracing such as podcasting and streaming. The report also explores how radio is improving its sound and quality with multicast signals and FM Translators.

“The radio industry is attempting to build out digital channels to reach local communities, but they are also focused on overall platform improvements,” Fratrik explains. “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.”

As of January 2018, 211 AM and 1,980 FM stations were broadcasting an HD Radio signal, according to BIA data. Another strong opportunity being employed is the increased use of FM translators for rebroadcasting AM signals. Finally, other new technologies including NextRadio opens up new avenues for revenue growth.

(For more information visit http://www.biakelsey.com).