Peter Kafka

Recent Posts by Peter Kafka

Will the Web Save the Radio Star?

Is radio making a comeback?

Hard to believe, but advisory firm BIA/Kelsey says the battered industry will see revenue bump up slightly this year following years of decline–and will keep growing after that. Kelsey projects that U.S. revenue will grow 1.5 percent this year and another two to four percent each following year (click chart below to enlarge).

Kelsey is vague about what’s driving that growth. But the firm seems to peg a lot of growth on the Web’s ability to generate ad revenue.

I’m skeptical, because I’ve been hearing about online radio’s advertising opportunities for a long time, but it’s still a tiny business. A more conventional assumption is that the Web, which offers listeners unlimited choice without offering broadcasters a lot of revenue, will continue to undermine the radio business.

But let’s be fair and balanced here. Two anecdotal data points in favor of Kelsey’s online-is-on-the-move argument:

  • An attendee from Allen & Co.’s recent off-the-record digital media confab in Arizona tells me that the talk of the conference wasn’t Zynga, Demand Media or any of the other obvious suspects. It was Pandora, the online radio service that was supposed to be near death just a year ago. Now the company may be on track for $100 million in revenue this year, and a possible IPO.
  • At a Billboard conference panel this month, David Goodman, who runs the digital group for CBS’s (CBS) radio unit, boasted about booming ad sales and said that digital now makes up five percent of the company’s revenue. However, when I asked him repeatedly if his group is turning a profit, he demurred.

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