National radio sales down by 25%: CBS

It's been a dismal year for the blind medium, with a shortfall of 12.7% for the year according to Canadian Broadcast Sales. But a looming election, increase in wireless competition and H1N1 prevention campaigns stand to bring about a better run for Q1/2010.

Not since Sept. 11, 2001, has radio experienced a decrease in revenue like this year, says Patrick Grierson, president of Canadian Broadcast Sales (CBS). A report released yesterday shows Q4 was radio’s biggest challenge of the broadcast year with sales down by 25.2%, contributing to a total revenue shortfall of 12.7% for the year.

‘The bad economy, bad consumer confidence – and add to that the dog days of summer that followed through that quarter,’ are the factors Grierson blames for the drop.

The drop in demand has led to softening of rates, which lowered by about 10%, says Grierson, ‘and in some places even more than that, quite honestly.’

But not all provinces are created equal, he adds. ‘Saskatchewan and Manitoba have had a remarkably good time, as have the Atlantic provinces – Newfoundland is roaring along still. But BC, Alberta and Ontario in particular are the softer spots,’ Grierson tells MiC. The three categories that were weakest and contributed to Q4 shortfall are financial services (-61%), alcoholic beverages (-47.8%) and automotive (-40.5%).

However Q1 for this broadcast year is already bouncing back, says Grierson, with September bookings set to close at 95% of last year. The Government of Canada has also launched the broadcast portion of its H1N1 prevention campaign, with a $2 million radio buy running for four weeks. It’s also a good time in the election cycle for radio, but overall ‘I think we would like to see government spending improve,’ Grierson says.

CBS, which represents more than 60% of all private Canadian radio stations, is also looking for a better performance from the telecommunications category given the anticipated increase in competition in wireless. In Q4, spend in the category improved by 42% over the previous year, but finished the year down -19.1%. And the new year looks promising as telecommunications is running 30% ahead of last year in Q1, according to Grierson.

For the broadcast year 2009, retail spending was within 3% of the previous year, but its share of overall spend increased by over two points to 19.7%. Telecommunications accounted for 8.7% of sales and financial services was at 8.6%.