Will revenues return to radio?

Although some of the delegates might have been feeling a little worse for wear after last night’s Radio Advertising Awards, today’s MediaTel Group ‘Future of Radio’ seminar still managed to get the debate going.

One of the problems looked at was the mismatch between increasing numbers of listeners and falling revenues.

Jonathan Gillespie, group commercial director at GMG Radio, said that radio is facing a “value chain problem that we as an industry have to solve”, adding that one of the ways this could be addressed is through re-monetising radio’s traditionally loyal audiences on brands’ websites.

Although the recession has had a massive impact on radio revenues, panellist Morag Blazey, former chief executive of PHD and chair of the IPA Radio Working Party, said that a significant amount of the money lost has been due to structural issues.

However, she added that radio “as a 6% media, should be able to overcome that. I think that all of the money lost will come back, probably over four or five years.”

But despite the promise of the government’s Digital Britain report, which gave a DAB switchover date of 2015, Blazey was not convinced that this would be the catalyst for a return of lost revenues.

“It will be about how radio is sold – digital switchover is not why that money will come back,” she said.

MediaCom’s head of radio, Richard Jacobs, was not convinced by the argument that a change in the way radio is sold will be the reason revenues return.

“The reason people spend on radio is because they can see a return through sales,” he said. “Where you can see sales, people will spend more on radio.”

Radio futurologist James Cridland was less upbeat over whether lost revenues would come back to the industry once the recession is over. “Some commercial radio companies have panicked and dropped their yield.”

Like Gillespie, Cridland – who worked at the BBC on its iPlayer for radio service – also touched on the internet as an important part of radio’s armoury as it continues to evolve, although he pointed out that some in the industry have been slow to harness its abilities.

“Not all commercial radio companies have understood what happens with radio and internet combined,” he said.

For Gillespie, however, there has been at least one positive to come out of the current economic downturn. “The recession has fired this industry to look at itself and act,” he said.

MediaTel Group’s Future of Radio seminar was sponsored by Ipsos MediaCT