A report in The Australian, quoting forecasts by Venture Consulting, says radio revenue will crumble in the next few years. CRA’s Joan Warner questions that assumption and tells radioinfo the industry is confident of its future.
The report said radio “faced a [revenue] fall from 8.2% to 6.8%… That was a much bleaker outlook than the widely used forecasts by PwC, which has predicted… a 0.2% drop for radio to 9%. In dollar terms, Venture said ad revenue for FTA TV would fall from $3.45 billion last year to $3.02bn and for radio from $1.01bn to $893 million.”
Warner disagrees, saying online streaming “can’t reliably and robustly replicate or replace the extensive reach of free to air broadcast radio live to large audiences.”
radioinfo: This report seems at odds with other data that has been coming from the radio industry. What is your response to Venture consulting?
Warner: The resilience of radio advertising has been proven over a considerable period of time. Throughout the global economic crisis and the recent uncertain economic conditions the radio industry has been able to maintain a strong revenue base and is confident of doing so in the future. To do this, ensuring radio is in the media mix will be crucial.
To help promote the cost effectiveness and flexibility of radio as an advertising medium and a crucial part of the media mix, the industry will continue to undertake research on radio’s effectiveness and consumer interaction with and loyalty to radio. We will continue our highly effective onair brand campaign, as well as finding new ways to communicate the strengths and effectiveness of radio to agencies and advertisers.
radioinfo: The consultant quoted in the report said: “(Broadcasters) have been cushioned for some time, even though they have had their audience start to migrate away,” Has radio really been cushioned from the internet, or has it been responding and adapting so that it has been able to keep its revenue up?
Warner: A highly competitive media landscape means radio, like all other media, must work hard to maintain and increase its audience and advertising revenue. Fortunately one of radio’s strength’s is its ability to effectively respond to change.
radioinfo: “We believe the broadcasters are under threat in the medium term.” said Codrington. Do you agree?
Warner: The radio industry has continued to thrive when presented with the challenge of competition from TV, internet, ipods, podcasts, mobile phones and apps. Radio broadcasters have always looked at new technologies and platforms, that supposedly threaten radio’s future, as opportunities for radio – in many cases cleverly integrating them into their business models.
Radio continues to attract new listeners.
Last year in the 5 metropolitan centres 9.5 million people listened to commercial radio each week – up from 9.4 million people the previous year. Of this audience, radio reached 85% of 10-17 year olds each week, followed by 79% of people aged 40—54 years and 78% of 18-24 year olds.
radioinfo: Any other comments about the articles comparisons with streaming?
Warner: Radio is more than music and more than a jukebox. The Australian radio industry broadcasts some of the most innovative content in the world. Radio is live and local, it is sports, news and information, celebrity and gossip, audience participation and interaction. No streaming service can replicate the essence of good radio.
In addition online streaming can’t reliably and robustly replicate or replace the extensive reach of free to air broadcast radio live to large audiences. However, radio has made use of opportunities to engage and reach audiences wherever they are through the use of streaming . Radio must continue to be available across all platforms – AM, FM, DAB+, in cars, online and on any other new device that comes to market.
The radio industry is a dynamic and much loved industry that embraces new technology and new challenges and must continue to do what it does best: provide content that is relevant, live, local, immediate, and interactive whether the format is music, entertainment, news, talk or sport.
A report by Citi Research, from earlier this year, also takes a positive outlook on the industry’s revenue future.