Radio advertising revenue declined to 2003 levels last year, according to a recent report from the Radio Advertising Bureau.

Over-the-airwaves radio ad revenue was US$19.63 billion total in 2007, down 2.6 percent from $20.14 billion the year previous. The figure has stayed around $20 billion for the past few years, and hasn't reported any big gains since the online boom of the late 1990s. However, radio's online and other off-air revenue increased 10 percent to $1.68 billion last year.

According to a Wall Street Journal's article, “the numbers for 2007, coupled with the incremental growth of the past few years, speak to the fact that in good economic times, you can't count on radio to grow," said John Blackledge, a media analyst at J.P. Morgan. As the overall economy recession continues, he said he expects radio revenue to decline another three percent this year.

Blackledge said part of the problem is that “radio companies are undercutting each other on price in critical big markets.” Due to the increased entertainment options such as the Internet and mobile phones, consumers are spending less time with radio, especially at home and at work. “By comparison, while similar audience erosion confronts the television industry, the broadcast networks and cable TV generally are managing to keep advertising prices firm or growing,” he added, according to the WSJ article posted by MediaInfoCenter.

Jim Boyle, an analyst at CL King, pointed out the challenge the radio industry faces now is similar with that in the early 1950s. "There was a recession; the country was coming out of a war; there was a brand-new media competitor (TV); and there was a musical technological change in the form of extended-play records, or LPs,” WSJ reported.