OTTAWA – In Canada, anyway, private radio revenue continues to grow, defying many who believe the web, MP3 players and phones with music players in them will drive radio to an increasingly marginalized role.
In the 2007 broadcast year, ended August 31, 2007, advertising revenue among Canadian private radio broadcasters advanced 6% to almost $1.5 billion (current dollars), outpacing advertising market growth as a whole for the third time in five years.
Moreover, the 19.8 cents of profit before interest and taxes per dollar of revenue represent the industry’s third best showing in the past 30 years, after those of 2006 and 2005, Says the Statscan release.
“The industry’s financial success during the recent past was due largely to economic growth and industry restructuring. Among other things, regulatory changes in 1998 allowed for greater concentration of ownership, which helped radio withstand the competition from other media. The industry also rationalized its operations by transferring AM stations to the generally more popular and more profitable FM band,” added the release.
Of course, FM radio played a predominant role in the industry’s results. In 2007, it generated 78.3% of advertising revenues and 94.6% of profits before interest and taxes, which is a little more than in 2006 in both cases.
AM stations took in $320.3 million in revenue, an increase of 2.1% over 2006 while FM stations earned $1.152 billion, a 7.1% increase.
The size of the market has also been a key factor for radio broadcasters’
profitability. In 2007, radio stations operating in the five largest census metropolitan areas generated almost twice as much profit before interest and taxes per dollar of revenue as stations operating in smaller markets.
Large markets have had this advantage for several years.
Stations in the five largest markets collected $700 million in revenue while those in all other regions counted close to $774 million.
