PUBLIC RADIO EXCEEDS COMMERCIAL RADIO IN REVENUE GROWTH BUT SMALL STATIONS LAG BEHIND

We have good news and not-so-good news today about broadcast radio’s status in the multichannel, multi-platform media environment.  Then, we will look at a recent CPB presentation to see where public broadcasting fits into the narrative.

In our opinion, the best “big picture” analyst about radio (since Tom Taylor retired) is Fred Jacobs of Jacobs Media Strategies.  On Wednesday (6/5) Jacobs published a fascinating commentary called The State of U.S. Radio in Two Charts [link]. Anyone who is interested in how broadcast radio is doing compared to other media should read it.

The first chart (shown on the left) provides the most recent estimated time spent with various media platforms during an average day. 

Radio usage is one-hour and twenty-minutes per person, per day.   

Though radio usage is far higher than two of it’s old media cousins, newspapers and magazines, it is obvious that digital media is the most used medium.

Radio has kept its large listening base for three primary reasons: Listening by people in vehicles remains strong, people value certain types of programming and broadcast radio is a local service that is free, available anywhere and is easy to use.

A growing factor is "Alexa" and other Smart Speakers. They appear to be increasing radio listening in the home, but new research will tell us more.

Radio has long been the "Rodney Dangerfield" ("can't get respect") of media. Perhaps radio’s slogan should be “We’re Still Here!”

Here is Jacobs second chart. It comes from BIA Advisory Services and it shows commercial radio’s standing, compared to other media by measuring local ad revenue.  

Of the $145.8-billion expected to be spent on advertising in 2019, BIA projects that over-the-air radio will had 8.9% of the revenue pie. 

This means that local radio will get roughly $13-billion in 2019. Radio revenue is bigger than the revenue for printed newspapers (6.5%, $9.5-bllion), cable TV (4.0%, $5.8-billion) and the venerable Yellow Pages, once the cushiest-sales position in all media (0.7%, $1.0-billion).

Radio trails the annual ad revenue projections for broadcast television (11.8%, $17.2-billion) and Mobile (12.3%, $17.9-billion). So radio broadcasters can say “We’re Still Worth You Ad Dollars.”

CPB DATA SHOWS PUBLIC RADIO REVENUE CONTINUES TO GROW, EXCEPT AT SMALL STATIONS

Traditionally it has been difficult to compare public radio revenue with commercial media because the public radio data is hard to find. 

Now the public broadcasting revenue idata is available from CPB.

In May, CPB presented the data for 2018 at the annual Public Media Business Association (PBMA) conference. We are grateful that CPB made charts from the presentation avaialable to us. 

Here are the big numbers: In 2018 the total revenue for CPB qualified public radio stations was $1.1-billion. The total revenue for public television stations was $1.3-billion. 

CPB provided five-year revenue trends for 406 grantees representing 1,168 stations. 

University licenses made up 46% of the grantees and community licensees made up 43%.

Overall revenue for the 406 public radio grantees grew by 19% from 2014 to 2018, an increase of $180 million.

Most the revenue growth happened because individuals increased their support by 31% between 2014 and 2018. 

 Foundation support was up 29% and underwriting ("business") was up 15%.

The only category showing a decline was support from university sources. It was down by 2%

This is certainly good news but not all stations saw this much revenue growth, particularly in smaller markets. CPB divided the 406 grantees into three categories based on their annual total station revenue:

• 97 “Larger” stations had annual revenue above $3,000,000. They represent 24% of the 406 grantees. As a group, annual revenue for these 97 grantees grew by $159,000,000 in the past five years.

• 127 “Medium” size stations had annual revenue between $1,000,000 and $3,000,000. They are 31% of the grantees. As a group, annual revenue for these 127 grantees grew by $21,000,000 in the past five years.

• 186 “Smaller” stations had annual revenue under $1,000,000. They represent 46% of the 406 grantees. As a group, annual revenue for these 186 grantees decreased $1,000,000 in the past five years.

These are important trends because they touch upon the mission of public broadcasting.  Some would say the bigger stations live in a different word from smaller stations.  But, bigger stations not only have big revenue gains, they also have had unprecedented audience gains. Isn't this the kind of growth public radio needs in order continue its public service?

Smaller stations, pressed for cash, might argue that it is important to have dependable public radio service in all 50 states, therefore they need a larger slice of the CPB pie.  One thing is certain, this will continue to a major issue for stations, CPB and NPR.