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PwC: U.S. Broadcast Radio Ad Sales To Reach $16.6 Billion In 2027.


U.S. radio industry ad revenues are forecast to grow at a modest pace through 2027, according to a new report from PwC. Broadcast radio’s combined over the air and online audio ad sales are on track to rise from $15.8 billion in 2022 to $16.6 billion in 2027, at a compound annual growth rate of 0.9%. When subscription revenue from satellite radio is factored in, total radio revenue is expected to increase from $21.9 billion in 2022 to $23.2 billion in 2027. That amounts to a compound annual growth rate of 1.2%.


That total $21.9 billion for last year makes the U.S. the world’s largest radio market by far, accounting for 53.5% of the radio segment’s global revenue.


‘Extremely Popular Medium’


“Despite the challenges coming from competing audio streaming services, radio still remains an extremely popular medium,” PwC says in the Music, Radio, and Podcasts section of “Global Entertainment & Media Outlook 2023-2027.” It cites a June 2022 Audio Today report from Nielsen showing AM/FM radio with a monthly reach of 93% of the U.S. adult 18+ population (234 million listeners), compared to 52% for streaming music services and 13% for satellite radio.


The PwC report also notes that U.S. radio ad revenues “have not fully recovered” to pre-pandemic levels. That is despite a “flurry” of political advertising in the run-up to last year’s mid-term Congressional elections, which provided “a boost.” So did the “continued increase in digital revenues.” However, when the big publicly traded radio companies reported their fourth quarter and full year 2022 results, they “commented on what they describe as the continued headwinds of economic uncertainty as well as the possibility of the country falling into a recession. These factors have already taken their toll,” per the PwC report, in the form of layoffs in commercial and non-commercial radio and “right across the board at media and tech companies.”


Contrasting iHeart And NPR


The PwC report contrasts the 2022 financial results of iHeartMedia with that of NPR. The year-end numbers for iHeart “reflected the positive impact of political advertising and its podcast business on company revenues,” PwC says. That included total Q4 revenue up 6% to $1.1 billion although the gain would be around 1% if political advertising was stripped from the equation. The audio giant also saw podcast revenues jump 17% in Q4 to $113 million while full year 2022 podcast revenues at iHeart soared 42% year over year.


“The company dominates the podcast publisher charts with a unique monthly U.S. audience of 33 million and 412 million global streams and downloads for January 2023,” PwC says, citing data from Podtrac. “iHeart’s continued expansion into the podcast market can be seen in the 814 active podcast shows it hosted in January 2023, a significant increase from the 611 it offered 12 months previously.”


Looking just at the broadcast radio side of iHeart’s business, full year 2022 revenue clocked in at $1.9 billion (including political advertising), up from $1.8 billion in the previous year.


“It was a different story at non-profit media organization NPR,” PwC says, nothing how the public radio network does not benefit from political advertising and relies mainly on corporate sponsorships (37%) and dues paid by its member stations (32%), with the rest derived from institutional grants, individual donations, and satellite distribution fees. The report notes how NPR CEO John Lansing last November predicted budget cuts of at least $10 million before upping the forecast to $30 million in cuts in February 2023 with plans to lay off about 10% of its workforce, citing a decline in corporate sponsorship. “However, looking at the company’s latest financial statements for year to end-September 2022, corporate sponsorship had actually increased quite considerably” to $135.3 million from $121.8 million one year earlier.


The report also notes that NPR is the country’s third most popular podcast publisher, attracting a unique monthly audience of 20 million for 49 active shows in January 2023 with its Up First and NPR News Now podcasts ranking among the top five shows. And while the pubcaster launched its NPR+ platform that provides sponsorship-free, subscriber-only bonus content for individual podcasts, “only 34 of NPR’s 1000+ member stations are taking part in the offering, with 100% of the monthly fee going to the station,” PwC says. As a non-profit broadcaster, NPR is limited in how far it can go in the subscription-based podcast arena and its $8 a month fee “is seen as a request to become an individual donor to a local station rather than a subscription fee.”

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