BIA Kelsey Reports Mixed Radio Revenue 2017 Story

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 2.0 percent, according to the first quarter edition of BIA Advisory Services’ 2018 Investing In Radio Market Report.

Overall the industry experienced a 0.2% 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.

Mark Fratrik

“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.”

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

According to BIA data, as of January 2018, 211 AM and 1,980 FM stations were broadcasting an HD Radio signal.

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.