Local commercial broadcast radio and television generates a whopping $1.17 trillion of Gross Domestic Product (GDP) along with 2.47 million jobs, according to a new study from Woods & Poole Economics, with support from BIA Advisory Services. The analysis explores local broadcasting’s impact on the economy through direct employment, its ripple effect on other industries and as an advertising medium for messaging consumers. The report was commissioned by the National Association of Broadcasters.
The comprehensive 70-page report, “Local Radio and TV: Helping Drive the United States Economy,” reveals that direct employment from local commercial broadcasting—that is, jobs at local radio and TV stations—as well as in advertising and programming, is estimated at 318,000 jobs. That generates more than $53 billion annually in economic impact, Woods & Poole Economics states. Broadcast radio specifically provides more than 130,000 jobs that result in more than $21 billion in GDP. Of the total 318,000 jobs provided through direct employment, about one-third are tied to industries supporting local broadcasting.
Terrestrial radio and television stations are “critically important to the United States economy as a whole and to local economies in particular,” the report says in its executive summary. “Local radio and television's key role in the dissemination of entertainment and local programming is well established. Its important value to the national economy is often overlooked, and in many ways taken for granted.”
NAB President and CEO Gordon Smith, in a release accompanying the report, notes, “America’s local broadcast radio and TV stations play a unique role in every community across the country. They keep citizens informed with local news, viewers entertained with the most-watched programming and families safe with lifeline emergency information. But broadcasting plays a pivotal economic role as well, creating hundreds of thousands of well-paying jobs while helping hometown small businesses reach local consumers through advertising.”
Other Industries Impacted By Radio And TV
The study stresses, in fact, that numerous other industries are impacted by local radio and TV broadcasting “because they provide goods and services used in creating local television and radio broadcasting and advertising.” Industries as varied as telecommunications, public utilities, manufacturing, transportation and retail trade provide inputs into the production of local radio and television.
“Through advertising, the industry provides consumers with critical economic data on the price and features of products and services,” Woods & Poole Economics surmises. “To businesses, the industry provides a forum for getting messages about innovations and efficiencies directly to consumers. An unintended benefit of business to consumer advertising is that other businesses receive the same information and are prodded to adopt technologies and efficiencies to remain competitive; this free competitive intelligence is very valuable to consumers and to the economy as a whole.”
Further, the report explains that the economic impact of traditional radio/TV stations offers three major components. First, the direct impact of the industry is the result of its significant size, including 10,941 commercial radio stations. Second, as with any industry in a developed economy, “workers in the commercial local broadcast television and radio industry consume goods and services in all other sectors of the economy supporting more jobs and creating more income and output.” This ripple effect is estimated to result in more than 794,000 jobs and $132 billion in output. And third, the output of the commercial local broadcast radio/TV industry stimulates economic activity by providing a forum for advertising that is free to consumers. The “stimulative effect of advertising on local commercial broadcasts is very significant,” with an estimated $988 billion in U.S. output and 1.36 million jobs attributable to the impact of advertising on local television and radio.
“The income from local television and radio broadcast jobs flows through the economy creating additional jobs and income in various economic sectors,” the study explains. “A job in local television and radio broadcast stations multiplies itself by helping create jobs in construction, farming, mining, state and local government and all other economic sectors. The workers in the industries supplying goods and services to local television and radio broadcast workers in turn consume goods and services.”
Looking ahead, the report gives a thumbs-up to the industry’s forecast. Its outlook for growth for broadcast television and radio stations is positive through the year 2023. “The unique forum and low cost of providing entertainment and product information to consumers ensure that revenues will increase in coming years. For radio, BIA projects revenues from over the air will reach $13.0 billion in 2019, remain the same in 2020, while easing slightly to $12.9 billion in both 2021 and 2022, with $12.8 billion in 2023. But online revenues for radio will move as such between 2019 and 2023: $0.991 billion to $1.062 billion, $1.135 billion, $1.206 billion and $1.282 billion.
Woods & Poole Economics is an independent economic and demographic research firm in Washington, DC that specializes in long-range economic and demographic projections.