Last year was another good year for private radio in Canada, with airtime sales jumping 8.7 per cent to $1.3 billion, the largest year over year increase since 1988.

Private radio stations saw a profit of 20.6 cents on each dollar of revenue before interest and taxes, according to the latest report from Statistics Canada.

Since the start of the current decade, profit has averaged 17.7 cents per dollar of revenue, StatsCan said.

Advertising revenue for private radio rose $105.2 million for the year.

Stations in large markets such as Calgary, Ottawa-Gatineau and Toronto saw the highest profits.

The number of radio stations or networks have been shrinking since the early 1990s, resulting in fewer competitors for the same advertising dollars. There were eight fewer radio stations or networks in 2005 than in 2004.

"The AM segment posted profits before interest and taxes for a third consecutive year in 2005," StatsCan said, "following losses from 1990 to 2002."

FM radio's bottom line wasn't as rosy. The number of FM stations competing for the advertising pie rose to 393 in 2005 from 369 in 2004. But FM still managed to tug an 11.3 per cent rise in revenue from 2005 to finally break the $1 billion mark.

At 35.4 per cent, the FM profit margin for 2005 was similar to that of the previous five years, StatsCan said.

The CRTC's 2006 Broadcasting Policy Monitoring Report published at the end of June this year also reported increases in revenue, showing a 54 per cent increase in radio revenue over the last decade. Television advertising revenues rose 43 per cent during the same period. There was a 49 per cent rise in total media advertising revenue overall.

The percentages of the advertising pie remained fairly constant. Radio advertising was 15 per cent of all media advertising in 2005, compared with 14 per cent in 1997, while television advertising was 34 per cent in 2005, compared with 35 per cent in 1997.

Canadians listened to an average of 19.1 hours of radio a week in 2005, compared with 19.5 hours in 2004, which is a fairly small drop. But there have been similar incremental drops year over year in the years covered by the CRTC report.

The rise in radio revenue is particularly striking in view of the CRTC reporting that, according to MicroBBN surveys between Fall 1999 and Fall 2005, there has been a drop in the average weekly hours per capita across all age groups, with an average of 1.4 listening hours lost per week from all Canadians over the age of 12.

That means that radio stations are making more money, despite fewer hours of radio being listened to, per capita.

Pierre-Louis Smith, vice-president of radio policy and regulatory affairs for the Canadian Association of Broadcasters, credits the 1988 change in CRTC policy, which allowed more consolidation of ownership in radio markets.

One company can now own as many as four stations in a large market the size of Toronto or Ottawa, and as many as three in a smaller market where there are eight or fewer stations.

"That has played a role in helping the industry to provide economies of scale," Smith told CTV News.

"Having said that, there is a trend over the last few years of reduced listenership," he said. "For the radio industry that's a concern, especially in light of new platforms such as satellite radio and Internet radio, which are totally unregulated."

The top five radio operators measured by BBM between 1997 and 2005 (Corus Entertainment Inc., Standard Broadcasting Corporation Limited, Rogers Communications Inc., Astral Media Radio Inc. and CHUM Limited) had the lion's share of listening hours, garnering almost 280 million hours among them in 2005, representing 53 per cent of the national tuning share.