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Radio roulette: Format moves start high-stakes bidding war for listeners

April 4, 2005

"This market hasn't been shaken up like this in 20 years," said Tom Severino, vice president/market manager for Indianapolis-based Emmis Communications Corp.'s four local stations, including the new WLHK. "This will affect almost every segment of the central Indiana radio market."

Emmis' light-rock ratings lightweight WENS-FM 97.1 went country

March 25, looking to steal listeners from

the market powerhouse, Susquehanna Radio Corp.'s WFMSFM 95.5, which had been the market's only country station. WENS officials are ushering in a new format called Hank, and have changed WENS' call letters to WLHK.

Earlier in the month, Susquehannaowned WGLD-FM 104.5 abandoned its oldies playlist-which earned it the No. 6 ratings spot in central Indiana-for the renegade Jack format. WGLD has changed its call letters to WJJK.

And upstart WKLU-FM 101.9 is looking to muscle in on the greater Indianapolis market with an updated rock format and tower improvements.

The strong signals and broad central Indiana coverage of WLHK and WJJK

make their moves even more

dramatic, radio industry observers said.

Emmis and Susquehanna made the changes with no prior warning so they wouldn't tip off competitors, but both plan to promote the changes with massive marketing blitzes, including billboard and television advertising.

The hallmark of WLHK's Hank will be a much broader cut of country favorites, while WJJK is adopting the more rockoriented Jack format, which has proven successful in Canada and other parts of the United States.

Both formats have emerged in the last three years and are known to be light on disc jockey chatter and have longer playlists than more traditional formats. Jack and Hank formats are also known for their irreverence. Industry insiders wonder how the new formats will play in the more conservative central Indiana market.

"We're in the business of buying audience, so we're going to have to be very careful," said Bill Perkins, a longtime local media buyer and president of Perkins Nichols Media. "We have a very close eye on what's going on, as I'm sure all area radio advertisers do. There's plenty at stake, and I'm pretty sure we're going to see some significant ratings changes."

"We've already had clients pulling out at these stations," said Jay Schemanske, associate media director in the Indianapolis office of Optimedia, a division of Publicis Group, an advertising and public relations firm. "But we've also seen some advertisers show some interest in these formats. It will all depend on the demographic they're able to draw. The next three to six months will be critical in sorting that out."

While WLHK's primary target is dominant country station WFMS, the newly formatted WJJK-formerly WGLD-will likely go after listeners from a number of stations, including top rock station WFBQ-FM 94.7, and highly rated WNOU-FM 93.1, WRZX-FM 103.3 and WZPL-FM 99.5.

"You don't turn your back on the No. 6 ratings spot in a market like Indianapolis unless you have a plan to aggressively market your new format and go after the top-tier competitors," said Robert Papper, a Ball State University telecommunications professor and former radio station owner and manager. "This is a high-risk time for everyone in this radio market. There could also be some high payoffs."

Additionally, there are-according to the most recent Arbitron ratings-about 250,000 listeners of the former WENS and WGLD formats who are probably looking for a new favorite station.

"That's no small number in this market," said Tom Taylor, editor of trade publication Inside Radio. "So you'll see not only the new and resurgent stations trying to gain market traction, you'll likely see expanded marketing efforts from the established stations trying to win new loyalties."

"Right now, we're taking a wait-andsee approach," said Tim Medland, vice president/market manager of Pennsylvania-based Entercom Communications. "We hope this is a great opportunity for us. But there are a lot of unknowns."

Entercom, like many conglomerates that operate several local radio stations, finds itself fighting the war on multiple fronts. Entercom's modern-adult station, WZPL, will be fighting to gain former WENS listeners while at the same time, Medland said, fighting off attacks from WJJK's new Jack format and even Hank.

"Hank might take listeners from a lot of people," Medland said. "I wouldn't underestimate it."

Emmis' Severino agrees.

"Our motto is going to be, 'Hank FM, he plays anything country,'" Severino said. "We think it will have a broader appeal than a traditional old-line heritage station like WFMS. What we're doing is very different, and we think we'll grow the country market here."

Meanwhile, Entercom's WTPI-FM 107.9, which plays contemporary music aimed at the 35- to 54-year-old market, will be trying to pick up displaced listeners of the former WENS and WGLD. Entercom won't be alone. The resurgent WKLU, which is trying to triple its ad revenue, will be going after some of the same market along with a slew of others, sensing their chance to move up in the ratings. Emmis is hoping to recapture some of its former WENS listeners and WGLD oldies fans with its soft-rock station WXYB-FM 105.7.

There's even talk among industry insiders that an existing station could soon make the switch to oldies to fill the void left by WGLD.

"This is an immense opportunity for a ratings reshuffle," Inside Radio's Taylor said. "Opportunities don't come along like this very often, so the fight should be intense."

While advertisers will be watching Arbitron's listener numbers closely, they'll also be examining demographics-especially which stations attract a younger audience.

"There's a preoccupation these days among advertisers and media buyers with the younger audience," Ball State's Papper said. "Even though the aging baby boomers are known to have more disposable income, a younger audience is thought to be more easily influenced, and the theory is once you have a customer, you can keep it."

Susquehanna officials said even if Jack doesn't drive up ratings, the switch will be successful if it produces a younger audience.

"We did significant testing and found that advertisers want to reach a younger audience than what an oldies format was reaching," said Charlie Morgan, vice president/market manager for York, Pabased Susquehanna. "This move is more about the composition of the audience than the size of the audience."

"The issue isn't just how many listeners you have, it's how much money you make," Ball State's Papper said. "No station changes because they've been wildly successful."

Still, the decision mystifies Medland. "They were one of the most successful oldies stations nationally," he said.

Media buyer Perkins said some advertisers are willing to pay more for fewer listeners if the demographics trend younger. And the difference in ad rates can be staggering.

Stations with strong ratings and favorable demographics can command $400 or more for a 60-second spot, Perkins said. A floundering station's ad rates can drop below $50 for a 60-second spot.

If Emmis' and Susquehanna's claims of new and renewed advertiser interest are true, local competitors have plenty to fear.

"The response from advertisers has been fantastic," Morgan said. "Since the Jack format calls for reduced ad inventory, we're working very hard to run all the ads we have booked."

"We anticipated 30-[percent] to 40-percent advertiser attrition," said Emmis' Severino. "We've been absolutely amazed. We haven't had 5-percent attrition. We've generated a lot of new interest, and ad rates are already up 25 [percent] to 30 percent."
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