Radio Stations

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,200 radio firms in the US operate radio broadcasting studios and facilities that transmit programming to the public, affiliates, or subscribers. Major revenue categories include local advertising; national and regional advertising; programs; public and non-commercial programming; and network compensation. Satellite radio broadcasters generate the majority of revenue through subscription fees. Public radio stations receive the majority of revenue from listener contributions.

Regulation Impacts Operations

Radio broadcasters are regulated by the Federal Communications Commission (FCC), which governs licensing, ownership, and assignment of frequencies, locations, power, and other technical parameters.

Seasonality Affects Revenues

Revenue can be uneven and subject to seasonal factors.

Industry size & Structure

The average independent radio broadcasting company operates out of a single location, employs about 22-23 workers, and generates $6-7 million annually.

    • The radio broadcast industry consists of about 3,200 firms that employ about 91,000 workers and generate about $21.6 billion annually.
    • The industry is concentrated at the top; the top 20 companies account for about 76% of industry revenue.
    • The majority of firms operate within a limited geographical market. Large companies include iHeartRadio (formerly Clear Channel Communications), Cumulus Media, NPR, and SiriusXM Radio.
    • Large companies may have operations related to other forms of media, such as television or outdoor advertising.
    • The industry excludes Internet-only radio services, such as Pandora. Internet-only radio providers are considered part of the Internet broadcasting and services industry.
                              Industry Forecast
                              Radio Stations Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 10, 2023 - Former Emergency Management Officials Want AM Radios In Electric Cars
                              • The lack of AM radio in some new electric vehicles could cut off drivers from important safety alerts broadcast over the medium, seven former Federal Emergency Management Agency (FEMA) administrators wrote in a letter to US Transportation Secretary Pete Buttigieg. Car manufacturers that don't include AM radios in electric vehicles say that the motors generate electromagnetic frequencies on the same wavelength as AM radio signals, creating buzzing and signal fading from the interference. While drivers can use smartphones and other tech to connect to radio stations, the signal keeping those services online isn’t as reliable as AM radio during emergency events, the former FEMA officials said.
                              • Radio stations generated $1.8 billion in digital sales in 2022, up 21.1% over 2021, according to report from the Radio Advertising Bureau and Borrell and Associates. The $1.8 billion accounted for nearly one in five advertising dollars, with a fast-growing portion of it coming from the sale of streaming video advertising. Half of the industry’s top-line growth is expected to come from digital sales in 2023, according to the report, and more local ad revenue will come from video streaming than audio streaming spots.
                              • Magna, a unit of Interpublic Group of Companies' Mediabrands, expects national radio advertising to remain weak in the first half of 2023 and for local to hold up better. Auto also looks more promising. “We do think at some point in 2023, auto will turn a corner and will start increasing advertising spending,” says Michael Leszega, Associate Director of US Market Intelligence at Magna. “We see car sales that have started to increase now” – albeit only when compared to low car sales in 2021. “We think that auto will rebound somewhat to give a bright spot for the radio market.”
                              • Legislation under consideration in the US Congress would require AM and FM radio stations to pay royalties to performing artists for recordings that they broadcast. Experts say that the American Music Fairness Act is fiercely opposed by the National Association of Broadcasters (NAB). Representative Jerry Nadler said that the exemption enjoyed by broadcasters from such royalties is “grossly unfair” and that “its impact has become increasingly inequitable over time as the shape of the industry has changed,” but proposals to end the broadcast exemption have failed for years. The NAB has said that “performance tax proposals have struggled to gather supporters in Congress because members of Congress understand the devastating effect they would have on local radio.”
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