New York, NY (PRWEB) April 21, 2014
The Radio Broadcasting industry is struggling to retain its relevance and audience due to competition from digital media. In particular, the industry suffers because of its limited interaction with listeners and heavy reliance on advertising. “Prior to the recession, radio stations benefited from being a long-standing part of advertising budgets,” according to IBISWorld Industry Analyst James Crompton. When the recession hit in 2008, companies in many sectors slashed advertising budgets, lowering them through 2010. Radio advertising was hit particularly hard as companies focused more on maintaining a TV presence and growing their footprint online. Nonetheless, IBISWorld expects the industry to arise from recessionary lows with revenue increasing at an average annual rate of 1.9% to $17.0 billion in the five years to 2014, including an estimated increase of 1.7% in 2014.
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,” says Crompton. With competition also cannibalizing some revenue, the costs of restructuring caused profit to plummet from prerecession levels. IBISWorld expects profitability to remain subdued in the next five years.
The economy is projected to recover over the next five years, with advertising budgets set to follow. The industry is well established within many companies' media mixes. Radio's role will not be eliminated overnight, but it is expected to diminish slowly as companies dedicate more resources to reaching consumers online. However, technological advancements will help the industry, with satellite and digital radio already becoming more prevalent. These formats offer consumers high-quality audio and a wider music selection that is comparable to other digital music formats. Nonetheless, new regulations may force radio broadcasters to pay performers higher royalties for playing their music. If this performance tax is enacted, it will lead to further industry restructuring.
For more information, visit IBISWorld’s Radio Broadcasting in the US industry report page.
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IBISWorld industry Report Key Topics
The Radio Broadcasting 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.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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.