Radio ad revenues topped $1.4 billion: Statscan

Ad revenues were up in private radio last year, according to new data from Statistics Canada. But the growth rate is shrinking...

A Statistics Canada report released yesterday says private radio ad revenue jumped 5.3% to $1.4 billion in 2006, but the growth rate has slowed. The average rate over the last five years was 5.7%.

The numbers are down from the peak in 2005 of 8.7% growth, which was the industry’s biggest gain in almost two decades. The FM band’s ad revenues jumped 5.6% to $1.1 billion in 2006. Seven out of 10 FM stations made a profit.

Radio profits in 2006, at $284 million (before interest and taxes), were up 0.4% from the previous year. The profit margin, at 20%, was reportedly the third highest in four decades – after the 21% in 2005 and the 20.5% in 1971.

Some insights noted by Statistics Canada? English-language profit margins are larger because those stations spend less revenue on programming and admin. The profit margin for English-language stations was 22%, while French-language stations saw 11.5% and ethnic stations reached 8.3%.

Also, mediacos can reap benefits by owning more than one station in larger markets. The profit margin for the five largest metro markets was 13.4%, while smaller markets reached 13.9%.

AM radio saw a total profit (before interest and taxes) of $17.6 million last year, a 29.7% jump from 2005 – even though Statistics Canada says almost half of all stations didn’t break even. AM radio’s 5.5% profit margin didn’t come close to that of FM radio, at 24.2%.