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

                              Dec 4, 2022 - Royalties For Artists Under Consideration In US Congress
                              • 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.”
                              • Radio will capture 6.5% of what is forecast by BIA Advisory Services to be an $18.2 billion holiday retail advertising pie. “Radio’s over the air share is consistent for both the larger retail stores and the specialty stores,” said Mark Dugan, Director of Data Insights, and Client Relations at BIA. About $8.7 billion of the forecast $18.2 billion advertising spending total is expected to be invested by larger retail outlets, such as clothing stores, department stores, and home centers. Some $9.5 billion will be spent by specialty stores, including electronics, furniture, jewelry, and sporting goods retailers.
                              • Magna, a unit of Interpublic Group of Companies' Mediabrands, cut its forecast for nonpolitical ad spending for the second half of this year and its total advertising spending growth forecast for 2023. Company analysts say that a weaker economic environment is likely to cut into consumer spending. Items like food, drinks, personal care, and household goods ‘are especially at risk as firms are forced to increase product prices and face the possibility of consumers trading down in favor of cheaper brands.’ Advertising expenditures will decrease as a result. Ad spending growth for all of 2022 will come in at 9.8%, Magna said, less than the 11.1% forecast in June. The growth forecast for 2023 was cut to 4.8% from the June prediction of 5.8% growth.
                              • Bluetooth has now surpassed FM radio as the most important media feature among new car buyers, according to the Jacobs Media 2022 TechSurvey. About 80% of respondents with a Smartphone said that they can now connect the device in their car, a new high and an especially popular feature for younger consumers participating in the latest survey. “These content monsters, as we call the younger generation, are far more likely to connect their Smartphone to the car for content,” said Jacobs Media President Fred Jacobs.
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