Riding High on Optimism

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Over the past month, several radio ad revenue reports have been released that show promising news for our industry and the economy in general. The reports all show that radio ad revenues will increase over the next few years. Granted, these predictions come after some of the lowest revenue periods we have seen in recent memory, so it's not hard to expect some improvement. Still, the numbers being touted offer some financial and emotional relief for radio.

Two reports from BIA Kelsey and SNL Kagan both show increases, although their numbers don't agree. BIA expects 2010 revenues to increase 3.7 percent from 2009, while SNL predicts 6.4 percent. Either way, it's an improvement we can all appreciate. The longer term outlook shows these numbers to steadily increase as well.

The Radio Advertising Bureau posted a statistic that agrees with these predictions. The RAB says that first quarter 2010 revenues were 6 percent higher than the previous quarter. This is the highest quarter-to-quarter increase since the third quarter of 2000.

With revenue numbers looking up, some additional good news was released after the 2010 NAB Show from the International Association of Broadcasting Manufacturers. It conducted a survey that shows that broadcast manufacturers have a positive view of their business futures. In the study, 74 percent of the survey respondents anticipate better business in 2011 than in 2009. Of those, 47 percent are already reporting better order volumes than expected. And the sales are healthy: 78 percent of manufacturers said they maintained or increased their prices over the last quarter. In other words, the sales increases are not inflated by lower selling prices.

It's good news for stations and manufacturers alike.

I talk to lots of station engineers on a regular basis. They are aware of the revenue predictions, and many have said they are seeing economic improvements at their own stations. But with the happy news comes a sense of a caution. It was a hard and fast fall when the decline hit, and it's a slow and steady rise to recovery. After working on financial reserves for an extended period, many stations want to rebuild those reserves before returning to business as usual.

The engineers I talk to are stretched thin. They have been doing more with less for some time, and the expected financial relief shows promise, but it's not fully here yet. For many stations, projects that were put on hold are being restarted, although in many cases it's not because of financial recovery but rather necessity: The improvement was put off as long as possible and it just has to be done. Whatever the reason, it's helping the manufacturers.

And because radio is such a close-knit industry, recovery in one area spurs recovery in another. With the heavy burden falling behind us, we can focus on the future again.

Radio bounces back. It always has.

What's your opinion? Send it to radio@RadioMagOnline.com

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