Radio Broadcasting in the US Industry Market Research Report Now Available from IBISWorld

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Improving advertising budgets will bring some much-needed relief to radio broadcasters, but increasing competition from online music streaming sites, internet-only radio stations and digital music players will hamper industry growth. For these reasons, industry research firm IBISWorld has updated its report on the Radio Broadcasting industry.

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A boost in advertising budgets will benefit operators, but the internet will threaten growth.

The Radio Broadcasting industry is struggling to retain its relevance and audience because of competition from digital media. In particular, the industry suffers due to its limited interaction with listeners and heavy reliance on advertising, says IBISWorld industry analyst Tony Danova. Before the recession, radio stations benefited from being a long-standing part of advertising budgets. When the recession took hold in 2008, companies in many sectors slashed advertising budgets and continued lowering them through 2010, affording less opportunity for radio broadcasting firms. In fact, radio advertising was hit particularly hard as companies focused more on maintaining a TV presence and growing their footprint online. As a result, IBISWorld estimates that industry revenue will decline at an average annual rate of 3.7% to $16.9 billion over the five years to 2012, including a modest decrease of 0.3% in 2012. The decline in radio advertising led many radio stations to write down losses in assets. It also forced many broadcasters to restructure operations to minimize losses. To make matters worse, competition from other media outlets has increased, especially with streaming media development and the increasing capacity of portable MP3 players. With competition also cannibalizing some revenue, the costs of restructuring pulled the average industry profit margin down.

Although there are more than 6,000 companies participating in the Radio Broadcasting industry, the largest companies are Sirius XM Radio Inc., CC Media Holdings Inc. and CBS Corporation. These large companies often operate several dozen radio stations in multiple markets. This allows them to offer one-stop shops for companies seeking to advertise across multiple cities or to a number of demographics, continues Danova. A similar line of thought has been behind operators integrating horizontally into outdoor and billboard advertising (e.g. Clear Channel) and into television or internet (e.g. CBS). Because this has been a successful strategy, there has been a move toward consolidation during the past five years, and this trend is expected to continue. Other than a handful of exceptions, radio stations are targeted at audiences in a single local market. As a result, there are many radio stations that are individually owned and operated. There are also about 800 public radio stations that are state or federally funded. Many of these stations receive some of their content from providers such as National Public Radio, American Public Media, Public Radio International and Public Radio Exchange. Almost all radio stations produce some local content to supplement syndicated shows and national programming

The economy is projected to recover during the five years to 2017, and advertising budgets will follow. The industry is well established within many companies' media mixes, and radio's role will not be eliminated overnight. Instead, it will diminish slowly as companies dedicate more resources to reaching consumers online. However, technology advancements will help the industry: satellite and digital radio have already become more prevalent. These formats offer consumers high-quality audio and a wider music selection that is comparable to other digital music formats. Nonetheless, a new law may force radio broadcasters to pay performers a fee for playing their music. If this performance tax is enacted, it will lead to further industry restructuring. Amid these uncertainties, IBISWorld projects that revenue will grow during the five years to 2017. For more information, visit IBISWorld’s Radio Broadcasting in the US industry report page.

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IBISWorld industry Report Key Topics

This industry consists of broadcasting stations, networks and syndicates that transmit audio programming through AM, FM and satellite radio channels. The Radio Broadcasting industry excludes operators that function solely online.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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