SNL Kagan predicts robust growth for online radio revenues

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Radio online revenues are expected to grow by double digits this year, totaling $441 million. The figure would represent a 12% year-over-year increase, according to a report by SNL Kagan, a financial data intelligence firm that specializes in media and communications.

The firm predicts an even more robust increase next year, forecasting online radio revenue growth of 20%, year over year, to $530 million. As the market matures, revenue will level off through 2013, rising to $827 million, according to the forecast.

Justin Nielson, broadcast analyst at Kagan, said radio stations have turned to the online channel to make up for revenues that have declined in traditional radio.

Commenting on the growth, Nielson said: “I think a lot of it has to do with consumers who are streaming more music online and through mobile than ever before.”

He added that many radio stations have improved their Web sites, incorporating online streaming, and they are developing mobile applications for listeners.

Online radio also has the potential to become a viable platform for direct response ads, Nielson added.

“I've seen those campaigns come through the online radio space, such as coupon campaigns for the local grocery store,” he said. “They might have something on the station Web site to get a free coupon.”

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