Local Radio and TV Are Significant Contributors To The Gross National Product

MediaPostlogs Research Brief
by Jack Loechner, Yesterday, 8:15 AM
Local television and radio broadcasting contributes 7% of the nation's Gross Domestic Product, or $1.17 trillion annually, as well as 2.52 million jobs attributable to the industry every year, according to an NAB-commissioned study conducted by Woods & Poole Economics, with support from BIA/Kelsey. Total 2010 GDP Impact of Local Television and Radio Broadcasting

Contributor
Dollars and Jobs

GDP annually
$1.17 trillion

From television
$716.43 billion

From radio
$453.88 billion

Jobs on an annual basis
2.52 million

In television
1.54 million

In radio
0.98 million

Source: Newspaper Association of America, June 2011


The study calculated that the local broadcast industry employs over 300,000 people directly and in support industries, creating $49.32 billion in GDP annually. Television accounts for almost 187,000 of these jobs, as well as over $30 billion in GDP, while radio employs 118,000 people and contributes a little over $18 billion to the GDP. Through the consumption of goods and services by industry employees, local commercial broadcasting generates almost $135 billion in additional GDP and more than 833,000 jobs nationwide.

The economic impact of the commercial local broadcast industry, terrestrial television and radio stations, has three major components.

First, the direct impact of the industry is the result of its significant size: 1,370 commercial television stations and more than 11,700 commercial radio stations sustaining more than 300 thousand jobs and more than $49 billion in output.

(It is important to note, says the report, that only commercial local broadcast television and radio is included in this analysis. If noncommercial local broadcast television and radio were included the impact on the United States economy would be greater.)

The direct impact of local television and radio broadcasting on the United States economy is estimated at 305 thousand jobs and $49 billion in economic output. Local television broadcast stations generate 187 thousand jobs and $30 billion in economic output, while local radio broadcast stations generate another 118 thousand jobs and $19 billion in economic output.

The core direct impact of local television and radio broadcasting includes the number of jobs directly in local television and radio as well as the number of jobs in advertising and programming. It is estimated that local television and radio broadcasting and advertising and programming alone account for 195 thousand jobs.

Other industries are impacted by local television and radio broadcasting as well. When measured with a technical input-output analysis an additional 110 thousand jobs are supported in other industries because of the goods and services requirements of local television and radio broadcast stations.

Direct Impact of Local Television and Radio

• $49.32 billion in GDP annually
•$30.19 billion from television
•$19.13 billion from radio
•305.23 thousand jobs on an annual basis
•186.85 thousand in television
•118.38 thousand in radio

Second, 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 833 thousand jobs and $135 billion in output.

The income from local television and radio broadcast jobs flows through the economy creating additional jobs. 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. It is estimated that the cascading effect of jobs and income emanating in local television and radio broadcasting results in $135 billion in additional GDP and 833 thousand jobs nationwide.

Effect of Local Television and Radio on Other Industries

•$134.64 billion in GDP annually
•$82.42 billion from television
• $52.22 billion from radio
•833.27 thousand jobs on an annual basis
•510.10 thousand in television
•323.16 thousand in radio

Third, the output of commercial local broadcast television and radio industry stimulates economic activity by providing a forum for advertising that is free to consumers. An estimated $986 billion in United States output and 1.38 million jobs are attributable to the stimulative effects of advertising on local television and radio.

Local television and radio advertising serves an important role for both consumers and businesses in providing economic information on product prices and features, resulting in greater demand for well made and well priced goods and services. The additional demand contributes to aggregate economic growth.

An unintended consequence of paid advertising by business is that competitors learn of product features, innovations and price structures, encouraging businesses to adapt and offer better products at lower prices benefiting consumers and creating real economic growth and increases in wealth.

The primary impact of broadcast television and radio is reducing the cost of product information through advertising. In this way, broadcast television and radio stations have their most significant impact on economic growth, although the entertainment value of local broadcast television and radio is often emphasized in discussions on their impact on society.

Stimulative Effect of Local Television and Radio on the Economy

•$986.35 billion in GDP annually
•$603.82 billion from television
•$382.54 billion from radio
•1.38 million jobs on an annual basis
•846.56 thousand in television
•536.32 thousand in radio

According to the report, and data collected within the study, the outlook for growth in the commercial local broadcast industry, terrestrial television and radio stations, is strong. Research suggests that both television and radio local broadcast revenues will grow through the year 2015. The unique forum and low cost of providing entertainment and product information to consumers ensure that revenues will increase in coming years. The economic impact previously described in the study will show parallel growth.