Over-The-Air Local Radio Revenues Up 0.4% in 2011

RADIO ONLINE | Wednesday, April 11, 2012 | 2:16pm CT

In the first edition of its quarterly "Investing In Radio Market Report," BIA/Kelsey reports over-the-air local radio station revenues in 2011 reached $14.1 billion, a 0.4% increase from the year before. Online revenues increased 15.1% in 2011, reaching $439 million. In 2012, the firm expects overall radio industry revenues to reach $14.6 billion in 2012, a 3.5% rise over last year. Online radio ad revenues will grow from $505 million in 2012 to $767 million in 2016.

"Although radio's revenue ascent has been slow since its bottoming in 2009, the industry always picks up steam in an election year and is continuing to prove itself as a valuable local advertising medium, particularly as the integration between over-the-air and online improves," said BIA/Kelsey VP/Chief Economist Mark Fratrik. "News stations, in particular, continue to be leaders in many markets by creating comprehensive over-the-air and digital portfolios of ad products and formats."

BIA/Kelsey's "Investing In Radio" shows the wide variations between some markets and identifies several small and mid-size areas that were able to distinguish themselves in 2011. For example, the Portland, ME, market had the largest increase in revenues over 2010, with $25.4 million, or 22.8%. Continuing in order, Worcester, MA, posted a 15.8% increase, with $12.9 million in revenue, followed by Ann Arbor, MI, a 10.5% increase with $6.1 million in revenue, and Providence, RI, where revenue grew to $45.3 million, a 9.9% increase over 2010.

Fratrik notes that this year began optimistically with a significant rise in transactions, starting with Cumulus Media's acquisition of Citadel Broadcasting and then Hubbard Radio's purchase of some of the Bonneville stations. All-told, however, station transaction volume reached $4.3 billion in 2011 from a total of 1,080 transactions, of which, 682 were in metropolitan markets and 398 were in non-metro markets.

"The major transactions of the year turned out being unique unto themselves due to strategic decisions made by each company," added Fratrik. "In 2012 we think the improving economy will increase the number of station sales, particularly as they prove themselves to be more than an over-the-air profit center."