Radio On The Road To Recovery, Says Forecast
Radio advertising experienced significant growth in the 1990s as more commercial stations appeared on the scene and the medium appeared to offer better value for money than press and television.
Despite initial hopes that it would withstand the advertising downturn, commercial radio saw revenues fall in 2001 and is only now experiencing positive growth (see UK Radio Advertising Shows Second Successive Quarter Of Growth).
OMD believes that the autumn will herald an upturn for the industry and tentatively forecasts a small revival in 2003. Further increases will occur as radio attracts a higher share of display advertising.
| UK Radio Revenue Forecasts | |
| Year | Growth (%) |
| 2003 | 2.5 |
| 2004 | 4.2 |
| 2005 | 5.1 |
| 2006 | 7.2 |
| 2007 | 4.6 |
| Source: OMD UK, October 2002 | |
Ownership reforms The Draft Communications Bill will abolish the 15% rule and introduce a 3 + 1 condition. This means that there are to be at least three commercial broadcasters plus one BBC station in any given area. There is also provision for national newspapers, national TV stations and foreign media groups to buy into UK broadcasters.
The likelihood is that UK radio will come to be dominated by three major players, especially if the radio groups are successful in lobbying for 2 plus 1 ownership. OMD expects that Capital and EMAP will be the major beneficiaries in the near future but the proposed legislation threatens to change the face of the radio landscape as we know it.