Radio Outpaces Ad Market Growth In Canada (Again!)

Stats Canada: Private radio broadcasters' advertising revenue advanced 6.0% to $1.5 billion (current dollars), outpacing advertising market growth as a whole for the third time in five years.

The industry's financial success during the recent past was due largely to economic growth and industry restructuring. Among other things, regulatory changes in 1998 allowed for greater concentration of ownership, which helped radio withstand the competition from other media. The industry also rationalized its operations by transferring AM stations to the generally more popular and more profitable FM band.

FM radio played a predominant role in the industry's results. In 2007, it generated 78.3% of advertising revenues and 94.6% of profits before interest and taxes, which is a little more than in 2006 in both cases.

The size of the market has also been a key factor for radio broadcasters' profitability. In 2007, radio stations operating in the five largest census metropolitan areas generated almost twice as much profit before interest and taxes per dollar of revenue as stations operating in smaller markets. Large markets have had this advantage for several years.

Hey, American radio owners: maybe it's time to look hard at what's different about radio in Canada. Canadians have been watching American business for many years, and it shows, EH?