Fall Format Trend Overview - Part 2

Rock, Oldies, Adult Hits, News/Talk And Latin

Last week, Radiocrunch President Anthony Acampora analyzed ratings data for Top 40, Urban, Country, and AC. This week, Anthony moves into the Rock and Latin worlds, and also takes a peek inside gold-based formats such as News/Talk, Adult Hits, Classic Hits, and Oldies.

Results are national format trends provided by Arbitron for the Fall book each year since 2001. The change is the five-year difference from 2001 to 2006.

Before we start our inside look at the Rock formats, it's important to acknowledge that we are genuinely concerned about the alarming declines that these formats have seen since 2001. A lot of programmers are blaming the loss of Howard Stern. However, many of the declines in Rock happened prior to Stern's exit.

CLASSIC ROCK

Inside The Numbers: The decline for Classic Rock is probably the least of our concerns. The format is down 16% overall and 19% in the key 25-54 demo since 2001. However, despite its declines, Classic Rock remains a viable format that still delivers decent 25-54 numbers, although not at the levels of five to seven years ago.

Our Tip: While there is still a need and desire for '70s-based Classic Rock stations, they could well face the same challenges currently faced by many Oldies stations in the next few years. We recently designed a more '80s-focused Classic Rock format for a client, and it debuted at #2 25-54 in a very competitive market in its first book. WQBW came into Milwaukee and delivered initial strong 25-54 results, forcing heritage Active Rocker WLZR to move to a more Gold-based approach as WHQG. WQBW slid, but it had a good fall book and has become a viable facility. Classic Rock, not unlike AC or Oldies, will have to continue to evolve to keep its average age viable.

MAINSTREAM ROCK

Inside The Numbers: More than anything else, we've seen a decline in the number of Mainstream Rock stations. Many of these outlets have either moved into Classic Rock, or actually morphed into a more Active approach. When we first split Rock and Active Rock into formats at R&R back in the '90s, the panels were of comparable size. Today, Active Rock has at least twice as many stations.

Our Tip: Mainstream Rock is becoming a tougher sell. Truthfully, unless a Mainstream Rocker has a great morning show, the station can be very easy to surround and force into a position, or out of the format completely. KSJO/San Jose and KLOL/Houston are two heritage Mainstream Rockers that went away over the last few years. Our feeling is that there may not be a need for a Mainstream Rock station at all in most markets. Of all the Rock formats, this one would be #1 on our endangered list, as Classic Rock, Active Rock, and Alternative all have more focused positions.

ACTIVE ROCK

Inside The Numbers: Of all the Rock formats, Active Rock has hung in there. While the growth is not tremendous, the loss of some Mainstream stations and the severe decline of Alternative have been helpful to Active Rock. In addition, with so many Alternative stations abandoning or de-emphasizing harder music, this has given Active Rock a chance to own more music.

Our Tip: Active Rock programmers should hope that Alternative radio continues to stay away from them musically. Just like Rhythmic and Urban, Active Rock and Alternative go through stages where they share more music between them. Over the last couple of years, Alternative and Active Rock have not shared as much music -- and Active has been the winner -- with very little erosion. In 2001, Alternative led Active Rock by 2.5 shares 12+ (4.2-1.7) and 4.8 shares 18-34 (8.2-3.4). Today, Alternative's lead over Active has been trimmed down to a just 0.8 shares 12+ (2.6-1.8) and 1.7 shares 18-34 (5.0-3.3).

One interesting trend we are watching is a unique rock hybrid format that Clear Channel has been doing in some of their southeast markets. While each station is somewhat different, WKLS/Atlanta, WPLA/Jacksonville, WENN/Birmingham, and KYRK/New Orleans have been experimenting with a mix of Rock hits, primarily from the '80s through now. The stations, however, are not aggressive on new music. But in these very high ethnic markets, this will be an interesting concept to watch.

ALTERNATIVE

Inside The Numbers: The format has been extremely challenged over the last five years, seeing huge drops of 38% 12+, 39% 18-34, and 33% 25-54. In this particular format, we've decided to also break down the 18-24 and 25-34 age cells over the five-year period:

18-24 9.7-5.8 (-40%)
25-34 7.3-4.5 (-38%)

The erosion for the format seems to evenly spread between the two cells. One trend we have seen - especially in larger ethnic markets - is the huge decline in Rock shares among the 18-24 cells. Part of this could be related to the preference for Hip-Hop in those markets cutting into Alternative's once huge core.

Our Tip: We believe Alternative has the ability to really turn things around in 2007. One of our Alternative clients had one of the best fall books in the format. They moved from 8th to 1st 18-34 and from 11th to 3rd 18-49. This West Coast client went against what most in the Alternative format are trying to do.

There's definitely a division in sound between the CBS and Entercom Alternative stations in the West - and the Clear Channel Alternative stations in the South. Probably one of the biggest stories in the format was Clear Channel's WBZY beating heritage WNNX in Atlanta last summer. Ultimately, Clear Channel merged the formats of WBZY and Classic Rock WKLS into one station at 96.1, and WBZY is now Regional Mexican.

Our feeling is that Alternative needs to go and focus on cume. Programmers need to stop trying to be A&R executives at record companies. Play the hits, and play them often. That's not to say that you can't be ahead of the curve on new music. Properly dayparted, and surrounded by the right songs, Alternative radio can still deliver the perception of being the place for new music. Plus, Alternative is a great sell for advertisers. The qualitative on the format is strong, and many of these listeners are hard to reach. This is a tremendous format for advertisers, and if it delivers stronger cume, it can only get better.

Alternative also has a tendency to bail on songs once they cross to Top 40 or Hot AC. If the song fits, play it. The best thing that could happen for the format is for Alternative music to cross over to other formats. That immediately makes it more mass appeal, which ultimately helps Alternative's cume.

Alternative - just like most of the other youth oriented formats - needs to closely watch sales, downloads, and the web for content and music. Alternative stations need to be active with their websites, and their promotions need to reflect the audience, who are early adopters of new media and technology.

TRIPLE A

Inside The Numbers: Here's a format that is very steady. It basically maintains in the markets where it exists, and it power ratios well, but there aren't a lot of stations getting into the format.

Our Tip: In the right markets, there's an opportunity for Triple A to find a niche. Considering how well the format does for sales, it's surprising that more broadcasters haven't taken a shot. Much of it may have to due with not understanding how the format works. However, if one was to go in now and launch a Triple A station, it would have to be much more familiar than a lot of the heritage stations in the format.

For under-performing or signal-challenged facilities, this can be an inexpensive format to run that can generate modest cash flow.

SMOOTH JAZZ

Inside The Numbers: 2006 was a tough year for Smooth Jazz as heritage stations in Philadelphia and Dallas changed formats. However, the end of the year brought a new sign-on in Philly, and Broadcast Architecture announced a 24/7-satellite delivered format.

Musically, we've definitely watched the format evolve. While it certainly varies by market, the mix is typically about 30-40% vocal. The format, which used a mix of Pop, Soft Rock, and R&B vocals to balance the instrumentals, seems to be relying even more on R&B - especially in markets with a heavy Black population.

Our Tip: Smooth Jazz is definitely a viable niche format. The concern, as time goes on, is that it skews older. However, just like AC, if it continues evolving, hopefully it will at least stay status quo. We expect that the BA Smooth Jazz network is sure to help the format.

OLDIES/CLASSIC HITS

Comment: No format is more endangered than Oldies. The format has evolved dramatically over the last year or two as we have watched the 12+ ratings slide 22% and the 25-54's drop 26%, with the biggest erosion coming in the last two years.

Now, we have Oldies programmers wanting their stations to be listed as "Classic Hits," as many of them move their music out of the '60s and into the '70s (and the '80s in some places).

The biggest alarm went off in 2004, when CBS dropped Oldies on WCBS-FM/New York and WJMK/Chicago for "Jack-FM." That message was received loud and clear, and it really started a fundamental change to the Oldies format in other markets.

Our Tip: Being a big fan of the Oldies format, we know that musically it has to evolve. To be competitive at all 25-54, the format has to embrace the '70s. At this time, the range of music played on Oldies stations really varies among markets.

We took a look at the average musical year for the 35 Oldies stations that Mediabase monitors in the Oldies format and found that it runs the gamut from 1966.2 at WZZN/Chicago to 1976.6 at WLZT/Columbus, OH, the latter being more of a Gold-based AC. Within the last two weeks, we saw KQLL/Tulsa shift to "Classic Top 40" - basically a '70s-based Oldies station.

If the Oldies stations are successful in their attempt to move into the '70s, then it could be big problems for the more gold-based ACs - which have relied on a lot of this music.

ADULT HITS

Inside The Numbers: After debuting with a very respectable 2.3 share 12+ and 3.1 share 25-54 in 2005, Adult Hits saw growth of 13% 12+ and 10% 25-54 year-to-year -- not bad for a format that many predicted would be a flash in the pan.

Our Tip: For those who thought that this format didn't have legs, the early data shows that there is some long-term viability. We have launched the format in a few incarnations in multiple markets with good success. However, each one of our stations is different. One of them was female-targeted, one was male-targeted, and another was more Classic Rock-influenced. However, all three saw immediate reaction. And, ironically, all three had on-air talent.

Our concern for Adult Hits is that many owners and managers believe that it's a great format because it can be done without personalities. The curse will be broadcasters who get in and don't spend the money to execute properly.

The best example of how to execute: KCBS-FM/Los Angeles. "Jack-FM" in Los Angeles is perfectly tailored to the Los Angeles market. Under the guidance of Kevin Weatherly, KCBS-FM constantly stays fresh. They write new material and have fulltime writers and imaging people to constantly keep the station fresh. In addition, the music is perfectly focused on Los Angeles. A lot of the '80s titles on the station were staples of the old KROQ -- things that probably wouldn't work in another market.

Unlike Country, AC, Top 40, or a lot of other formats, Adult Hits has to be programmed specifically for its market. Personalize it and make it local!

NEWS/TALK/SPORTS

Inside The Numbers: These formats remain fairly consistent. Considering the fact that we used the Fall 2001 book for the five-year analysis actually should be a negative for News/Talk/Sports, as these formats excelled following 9/11. Nevertheless, the format remains steady. It's seen slight erosion 18-34 and is off just a tick 25-54.

We will be interested to see if the move of these formats over to FM will actually help the demos get younger. KSL-FM/Salt Lake City and WOKV/Jacksonville are two examples. The other thing is that we will be interested in seeing is a second year of CBS's "Free-FM" stations, which could definitely impact the format in a positive way if they grow in 2007.

LATIN FORMATS (COMBINED)

Inside The Numbers: We broke out the major Latin formats by genre below. To show the impact that they have had as a hole, we wanted to break down the overall shares.

REGIONAL MEXICAN

Inside The Numbers: Regional Mexican's growth is enormous. Besides the continued ratings increases in major hot beds like Los Angeles, broadcasters such as Bustos, Davidson, Curtis, and Lazer have been growing in growing Hispanic markets such as Milwaukee, Salt Lake City, Boise, and Raleigh just to name a few. Another boom for the format is two huge morning shows: Univision's Eddie "Piolin" Sotelo and SBS's Renan Almendarez Coello, a.k.a. "El Cucuy." Those morning shows tend to outperform the rest of their respective stations.

SPANISH CONTEMPORARY

Inside The Numbers: Spanish Contemporary took a bit of a slide in 2006 as Univision switched contemporary stations in San Diego, San Jose, and Las Vegas to its Spanish Adult Hits format "Recuerdo."

TROPICAL

Inside The Numbers: Tropical has been fairly steady, although WSKQ/New York has never been bigger. Within the last several months, Clear Channel has expanded its offerings as part of their growth in Spanish-language radio, putting Tropical on in Philadelphia on 104.5 FM and on two AMs in Boston.

LATIN URBAN

Inside The Numbers: After a huge start for Latin Urban, the format tapered off a bit in the second half of the year. KXOL/Los Angeles settled down a bit, although it is still holding its own 18-34. KLOL/Houston and KVIB/Phoenix are fairly consistent. KRGT/Las Vegas lasted a very short time before Univision flipped it to "Recuerdo." Clear Channel Latin Urbans in Albuquerque and Denver have since flipped to Smooth Jazz and Rhythmic AC respectively. This is a great example of the dictum that "one format doesn't fit all." KXOL's music continues to evolve, and we're hearing slightly more Hip-Hop today than we heard when the station debuted nearly two years ago.

Here are some statistics on the U.S. Hispanic Population: America's population topped 300 million people in 2006 and is expected to grow to 400 million by 2050. By then, Hispanics will account for 25% of the U.S. population (double their share from 2000), while non-Hispanic whites will drop from 69% of the population to 50% by 2050. If you are in a major market with a significant Hispanic population, you'd be advised to have a format that has some appeal to Hispanics.

Our Tip: The one area for major revenue growth the next few years will be with formats targeting Hispanics. Companies like Univision, SBS, Entravision, and Liberman have known this for years. Even major companies like Clear Channel and CBS have jumped into the Latin format arena the last few years, with some real success. If you are in a market with a growing Hispanic population, you may want to be the first in with a Latin format.