Updated Revenue Projection
The research firm IBISWORLD has updated a report on the radio industry that projects light at the end of the revenue downturn tunnel.
IBISWORLD writes, "The Radio Broadcasting industry is struggling to retain its relevance and audience due to competition from digital media. In particular, the industry suffers due to its limited interaction with listeners and heavy reliance on advertising. Prior to the recession, radio stations benefited from being a long-standing part of advertising budgets. When the recession took hold in 2008, companies in many sectors slashed advertising budgets and continued lowering them through 2010. Radio advertising was hit particularly hard as companies focused more on maintaining a TV presence and growing their footprint online. As a result, IBISWORLD estimates that Radio Broadcasting industry revenue will decline at an average annual rate of 2.5% to $17.3 billion in the five years to 2013, despite an estimated increase of 1.0% in 2013."
The decline is expected to end though -- with IBISWORLD noting, "The economy is projected to recover over the five years to 2018, with advertising budgets set to follow. The industry is well established within many companies' media mixes."
“Radio's role will not be eliminated overnight," notes IBISWORLD Industry Analyst JAMES CROMPTON, "but will instead diminish slowly as companies dedicate more resources to reaching consumers online.”
However, technology advancements will help the industry: satellite and digital radio have already become more prevalent. The report adds, "these formats offer consumers high-quality audio and a wider music selection that is comparable to other digital music formats. Nonetheless, new regulations may force radio broadcasters to pay performers higher royalties for playing their music. If this performance tax is enacted, it will lead to further industry restructuring. Consequently, IBISWORLD forecasts revenue will grow in the five years to 2018."
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