Radio and audio 4
4.2.3 Revenues among our comparator countries
Sixteen of our 18 comparator countries reported revenue growth in 2014
Revenues among the 18 comparator countries featured in this report grew by 3.5%, as discussed in section 4.1.2. Apart from Italy and Japan, all comparator countries reported an increase in radio revenue in 2014, with the largest proportional growth coming from India (14.0%) and China (9.8%). Overall proportional growth in BRIC countries and Nigeria (8.8%) was greater than overall proportional growth in European comparator countries (2.8%).
Revenue growth in the US market, the largest among our comparator countries, grew by
£412.3m to £12.5bn, representing a 3.4% increase. The US accounted for 54.7% of the total revenue of the comparator countries as a whole. Revenues in Italy and Japan decreased by 1.5% and 2.4% respectively, predominantly due to a drop in commercial revenue.
Radio industry revenues: 2014 Figure 4.7
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015- 2019 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility.
Ofcom has used an exchange rate of $1.648 to the GBP, representing the IMF average for 2014.
Note that the UK radio industry figure is sourced from broadcaster returns made to Ofcom. All figures expressed in nominal terms.
25.1 25.7 26.3 27.0 28.1
19.1 19.6 19.9 20.4 21.2
4.4 4.4 4.4 4.5 4.6
1.6 1.7 2.0 2.1 2.3
0 10 20 30
2010 2011 2012 2013 2014
Total Advertising Public radio licence fees Satellite radio subscriptions Revenue (£bn)
1.2 1.1 3.0
0.4
0.7 0.6
0.3 0.3 0.3
0.1 0.1 0.2 0.3 0.3 0.2 1.3
0.1 0
1 2 3 4
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA
£bn 12.5
3.6 1.9 3.4 -1.5 3.4 -2.4 3.1 1.9 1.3 5.7 0.4 4.0 2.8 4.3 7.0 14.0 9.8 4.5 Year-on-year
growth (%): :
186 Revenue growth remains high among the BRIC countries and Sweden, while Italy and Japan recorded proportional decline
As Figure 4.8 shows, the BRIC countries include the three fastest-growing markets in 2014.
India had the highest rate of growth, at 14.0%, constituting the only double-digit percentage increase in 2014. This growth was a result of the Indian Government’s partial auctions across 69 cities, which allowed for a potential of 135 channels, alongside growing demand for radio advertising.117
Of the European comparator countries, Sweden recorded the highest annual growth (5.7%).
This may be explained by strong recovery in 2014 following the significant drops in advertising in 2012 and 2013.118
The largest proportional decline was in Japan (2.4%), the only other decline was in Italy (1.5%).
Radio industry revenue annual growth: 2013-2014 Figure 4.8
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015- 2019 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility.
Ofcom has used an exchange rate of $1.648 to the GBP, representing the IMF average for 2014.
Note that the UK radio industry figure is sourced from broadcaster returns made to Ofcom. All figures expressed in nominal terms.
Public radio licence fees contribute the largest proportion of revenues in Germany, Sweden and the UK
Of the 18 comparator countries, nine of the radio markets are part-funded by public radio licence fees, and with the exception of South Korea and Japan, all these countries are within Europe. Public radio licence fees constitute the majority of radio revenue in three of these countries: Germany, Sweden and the UK.
Germany has the highest public funding ratio, with 79% of revenues coming from public radio licence fees. Of the markets that are partially public-funded, public radio licence fees contribute the least in Japan (5%) and Poland (7%).
117 See FCCI-KPMG, 2015. Indian Media and Entertainment Industry Report 2015, pp 143-155.
https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/FICCI- KPMG_2015.pdf [Accessed 30 September 2015].
118 PwC Global Entertainment and Media Outlook 2015-2019 https://pwc.com/outlook [Accessed 5 October 2015].
3.6 1.9
3.4
-1.5 3.4
-2.4 3.1
1.9 1.3 5.7
0.4 4.0
2.8 4.3
7.0 14.0
9.8
4.5
-5 0 5 10 15
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA Annual growth (%)
In the UK, three-fifths (60%) of radio revenue comes from public radio licence fees. France and the Netherlands are the only other countries where public radio licence fees account for over 30% of total revenues.
The US is the only comparator country where subscriber-based satellite radio is available; it contributed 17% to total revenues in 2014.
Proportion of radio revenue, by source Figure 4.9
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015- 2019 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility.
Ofcom has used an exchange rate of $1.648 to the GBP, representing the IMF average for 2014.
Note: (1) The UK radio industry figure is sourced from broadcaster returns made to Ofcom. (2) In Australia, advertising revenue is shown as the sole source of radio revenue. Although there is no licence fee to fund radio or television broadcasting in Australia, the Australian Broadcasting Corporation (ABC) is funded by the Australian Government as part of its budget each year, so publicly-funded radio services are available in Australia.
Radio markets in the US, Germany and Sweden generate the highest revenue per head of population
The highest total revenue per head of population in 2014, including advertising revenue, public radio licence fee revenue and satellite radio subscriptions, was in the US (£39.30), followed by Germany (£36.40). Sweden ranked next, generating £29.40 revenue per head.
In Asia, the highest revenue per head of population was in Singapore, at £16.00.
In the UK, revenue per head was £18.70 in 2014, slightly higher than in France (£16.70), the Netherlands and Singapore (both £16.00).
40 61
21
77 83 95 100 100 69
22
93 100 78
100 100 100 100 100 60
39 79
23
5
31 78
7 17 22
0%
20%
40%
60%
80%
100%
UK FRA GER ITA USA JPN AUS ESP NED SWE POL SGP KOR BRA RUS IND CHN NGA Advertising Public radio licence fees Satellite radio subscriptions
Total revenue (%)
188 Radio industry revenues, per head of population: 2014
Figure 4.10
Source: Ofcom analysis based on data from PwC Global Entertainment and Media Outlook 2015- 2019 @ pwc.com/outlook. Interpretation and manipulation of data are solely Ofcom’s responsibility.
Ofcom has used an exchange rate of $1.648 to the GBP, representing the IMF average for 2014.
Note that the UK radio industry figure is sourced from broadcaster returns made to Ofcom.