INDUSTRY SEGMENT PERFORMANCE
Radio enticed domestic advertisers to spend a total of $16.9 billion in 1999, up 12.3% from 1998. With projected spending to reach $26.6 billion in 2004, a CAGR of 9.5% for the forecast period. This compares with a 10.0% CAGR for the period 1994-1999.
National spot advertising posted double-digit growth for the third consecutive year in 1999, advancing 11.1%, while local advertising experienced its highest growth since 1981, with revenues climbing 13.0% for the year.
National spot advertising climbed by 15.0 percent for the second consecutive year, and local advertising posted an 11.0 percent advance, an improvement over the high single-digit increases of the prior three years. Over the last five years, advertising on radio stations rose at a 9.9 percent compound annual rate-11.2 percent for national spot and 9.6 percent for local. These sustained growth rates, impressive for a mature medium, reflect the benefits of consolidation.
Radio advertising will grow at a projected 9.7 percent annual rate over the forecast period, virtually matching the 9.8 percent annual increase of the last five years, but growth after 2000 will be relatively modest.
Driven primarily by acquisitions, revenue growth reached 33.4% in 1997, following a 31.9% rise in 1996.
In 1997, the operating income margin rose to a five-year high (15.8%) as the benefits of the recent wave of consolidation began to be realized. These benefits include the opportunity to package and sell inventory across an array of stations within one market and to offer national advertisers a greater reach in a single buy -- opportunities that led to double-digit radio advertising growth in 1997.
Operating cash flow margins climbed steadily in the five year period 1993-97, from 23.0% to 31.3%, with a 3.1% increase in 1997. Overall, radio broadcasting profit margins well outstripped overall communications industry averages.
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