PRESS RELEASE BY MBD...

UK RADIO INUSTRY MARKET RESEARCH REPORT

RELEASED: JULY 2008

After researching the UK radio industry development and taking into account various other factors the following conclusions can be drawn from MBD's report:

MARKET REVIEW 2003-2007:

The radio industry’s spend/revenues increased by 2% to a peak of £1140 million in 2007. This represents overall growth of 5% compared with 2003. Between 2003 and 2006, growth occurred in each year with the exception of a marginal decline in 2005.

Between 2003 and 2006, BBC spending (including BBC World Services) increased year-on-year culminating in overall growth of 12% to £540 million. In 2007, BBC radio spending increased by a negligible amount to £542 million, with BBC Radio 4 accounting for the largest share at 15% of the total expenditure (including BBC World Services).

In 2007, commercial revenues increased by 3% to £598 million reversing the trend for decline evident in the previous two years. Nonetheless this still represents an overall reduction of 1% compared with the beginning of the review period. Furthermore the proportional importance of the sector has also declined from 56% in 2003 to 52% in 2007.

MARKET FORECAST 2008-2012:

Revenues from commercial radio are projected to increase moderately during the first half of the forecast period. MBD believe this is due to uncertain economic conditions in the UK which is likely to result in lower investments from businesses and therefore fewer advertisements and sponsorships deals. In addition with stronger economic growth predicted in Asia, larger businesses are likely to divert their attention and money there. Another downward pressure on the radio industry revenues is the current negative press related to phone-in competitions which could result in lower consumer participation at least in the short term. However in 2011 and 2012 growth is anticipated to pick up. This can be partially attributed to the 2012 Olympics. Overall a cumulative real term increase of 9% is projected compared with 2007 taking revenues to £650 million.

The level of BBC radio spending is expected to be lower than that of the commercial radio sector revenue. The spending is likely to be funded by the increasing licence fee, with spending expected to be focused on digital stations and services, including multimedia and listen on demand services. However, in the coming years the BBC plans to cut cost due to concerns over increasing expenditure. In 2012 the level of BBC radio programming spend is anticipated to reach a low of £509 million (at 2007 prices), representing an overall reduction of 6% compared with the 2007. Annual rates of decline are anticipated to fluctuate between 1% and 2% in the five years to 2012.

NOTE TO EDITORS:

Market & Business Development Ltd specialises in business to business market research. The range of reports and industries in which we operate in constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

Click here for full details of the UK Radio Inustry Research Report

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