• by Erik Sass  @eriksass1, September 2, 2008

Maybe it's the long winters. While the radio business in the United States saw total revenues slip 2% to $21.3 billion last year, according to the Canadian Radio-Television and Telecommunications Commission, Canadian radio's revenues grew 6% to $1.47 billion in 2007. (The value of the Canadian and American dollar was roughly equal in December 2007.)

Weather aside, it's not quite clear why Canadian radio broadcasters are doing better than their American counterparts. But there are a number of factors that may be contributing to their success.

First, there seems to be less competitive friction in Canada. With about 800 public and privately held radio stations, Canada has one station for roughly every 41,250 people, compared with about 12,500 public and private radio stations in the United States, or one for roughly every 24,000 people.

Second, a higher proportion of Canadian radio stations are publicly owned, meaning that they accept little or no advertising or promotional content. About 300 or 38% of Canada's radio stations fit this description, versus just 700 out of 12,500 or 5% in the U.S.

In addition, (and perhaps surprisingly, for Americans raised on images of their neighbor's rural idyll) the Canadian population skews more urban than the U.S., which means the potential broadcast audience is more concentrated. Overall, about 21.5 million or 65% of Canada's 33 million people live in urban areas with populations over 100,000, compared with about 80 million or 26% of America's 300 million people. Also, 12.9 million Canadians or about 40% of the population live in one of five cities with populations over 1 million, compared to 24 million or 8% of Americans.

It should be noted that--in recent years at least--size has not equaled success for American radio stations, as large and mid-sized markets have seen ad revenues tumble, while small market players clean up. In July, the big U.S. radio markets were down 7%, mid-sized markets were down 5%, and small markets were up 2%, according to Jim Boyle, an analyst with CL King and Associates.

A similar dynamic seems to be at work in Canada--but skewing more toward the mid-sized markets. Plus, none of the market categories registered actual losses. According to the Statistics Canada, revenues at the top five metro areas grew 4% in 2007, compared to 8.3% growth in the 28 other metro areas (populations 100,000+), while smaller markets grew 7.4%