Radio Stations

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                              Coronavirus Update

                              Apr 28, 2022 - Mid-term Election Ad Spending Under Way
                              • The Democratic Senatorial Campaign Committee has reserved $33 million to be used this fall ahead of the mid-term elections. The initial reservation of funds is likely to be added to and modified as the election season progresses. The announcement is the first of several expected for the 2022 mid-term elections. The National Republican Senatorial Committee (NRSC) is expected to announce its campaign ad reservations in May. Spending by both groups will be a fraction of what will be spent by Political Action Committees (PACs). Politico says that The Mitch McConnell-aligned Senate Leadership Fund placed $141 million in ads and the Chuck Schumer-aligned Senate Majority PAC reserved spots totaling $106 million.
                              • Local radio revenues are expected to build on the recovery of 2021 in 2022, according to BIA Advisory Services. Local radio revenue rose 16% to $12.79 billion in 2021, after a low of just over $11 billion in 2020. Revenue growth in 2021 was uneven as the emergence of the Delta variant began to slow business in the third quarter. BIA expects local radio revenue to grow 5.9% to $13.54 billion in 2022. Except for restaurants and some retail segments, ad spending in 2022 is expected to exceed 2019 levels across all major industry verticals. However, as a whole, local radio revenue will not reach 2019’s $14.16 billion. Digital revenue will be the biggest growth driver in 2022, growing 15.4% over 2021 and reaching $2.17 billion. Election-year spending on political ads will also boost revenues.
                              • Radio industry revenue is expected to increase 6.2% year over year in 2022 to $15.75 billion, according to Kagan, the media research division of S&P Global Market Intelligence. Revenue growth will be driven by lower ad costs and higher return on investment compared to many other media. Radio is also advantaged by its ability to deliver local audiences. Radio will continue to face some headwinds, including competition from streaming and other on-demand music and talk programming options and an expected continuation of work-from-home, which has eroded drive-time listenership. Healthcare, telecommunications, banking, home improvement, and professional services advertising are expected to increase most. Ad demand from the automotive, retail, and travel sectors is expected to remain soft in 2022.
                              • The Corporation for Public Broadcasting (CPB) awarded $275,000 in emergency grants to 14 public radio and TV stations in areas of the US with low levels of vaccinations and/or high rates of infection. Grant recipients are using the funding to develop or extend programming about the pandemic and to counter misinformation about the vaccines. Some stations are also working with local resources to reach communities with low vaccination rates via public affairs programming and TikTok videos and text messages. Grantees included radio and TV stations in Alabama, Arkansas, Florida, Idaho, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee, Texas, West Virginia, and Wyoming.
                              • The National Association of Broadcasters (NAB) outlined for the Federal Communications Commission (FCC), its arguments for the easing or eliminating rules regulating how many radio stations a company can own in a given market. The NAB suggests that the pandemic worsened radio’s pre-existing challenges, including falling listenership due to rising competition from digital audio and declining revenue. Local radio stations’ over-the-air (OTA) revenue declined 45% from $17.6 billion in 2005 to $9.7 billion in 2020, according to the NAB. FM radio’s listenership has fallen 23.5% Over the last five years, according to Nielsen Audio. The NAB argues that under the current regulatory regime, radio station owners find it challenging to leverage economies of scale that would allow them to make the necessary financial investments to improve their stations. Limits on ownership in individual markets also make it difficult for owners to sell their stations.
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