The local radio market's biggest shake-up in more than a decade has almost every commercial station in central Indiana scrambling to attract the thousands of listeners and millions of advertising dollars suddenly up for grabs.
Emmis Communications Corp. said Oct. 8 it will move WIBC-AM 1070 programming to the FM frequency previously occupied by WNOU-FM 93.1, which it will kill. Industry experts said the fallout will continue to rain down throughout the fourth quarter and well into 2008.
"There's lots of intrigue here," said Tom Taylor, executive editor of Radio-Info.com and a longtime radio industry expert. "One thing is certain: When you start talking about changes to two of the top-five-rated stations in the market, that's major. These are some landmark moves."
Perhaps the biggest was Indianapolis-based Emmis' decision to reprogram its AM frequency as an all-sports station. New call letters will be unveiled within 30 days, company officials said, as will a marketing blitz to promote the changes that go into effect Jan. 7.
The moves left some within the industry scratching their heads, as many questions remain unanswered.
For instance, can Emmis grow the audience for WIBC by moving its programming to the FM band--and at which stations' expense? And can its all-sports station bring in as much revenue as WNOU? Finally, is abandoning the younger listeners who tuned into WNOU a smart long-term strategy?
As baby boomers--the largest audience in any market--grow older, some radio groups increasingly find themselves chasing a graying demographic, often at the expense of the younger audience. Some think the strategy is unwise, but financial figures show advertisers are most interested in the 35-54 age group right now. And youngsters are less inclined to listen to the radio, preferring downloaded music.
Emmis said it sacrificed WNOU because it underperformed and because the company saw more opportunity elsewhere. WNOU grossed $4.1 million in 2006, according to BIA Financial Network Inc. That's less than some stations with lower ratings than WNOU, which had often been among the market's top five. WNOU hadn't turned a profit in recent years, Emmis officials said.
The company had projected a slim profit this year, but still chose to kill WNOU instead of country station WLHK-FM 97.1, because company officials think the country format has more potential in this market than WNOU's Top 40 mix.
Maryland-based Radio One made another major move two days after Emmis' announcement, agreeing to buy WNOU's Top 40 "Radio Now" format for an undisclosed sum.
Radio One, which operates four stations in Indianapolis, already moved the format to its 100.9 FM frequency--formerly home to the city's only commercial jazz station, WYJZ. Many industry experts think it's only a matter of time before someone fills the jazz void.
The critical measuring period for these changes will be January through March, said Erin McLeod, media director at locally based MZD Advertising.
"When that first-quarter rating book comes out in April next year, you can bet plenty of advertisers will have a close eye on it to see where the audience lands," McLeod said. "Radio still has a huge audience, and it's important for many of our advertisers."
McLeod is especially concerned about the fallout from changes at WNOU, which was the market's strongest station targeting listeners in their teens and 20s.
"It's not wise to ignore this younger audience," she said.
WNOU had nearly 5 percent of the market for all listeners ages 12 and over, and, according to industry experts, was tops with listeners ages 12 to 25.
After Emmis announced it was dumping the format, WZPL-FM 99.5 and WHHH-FM 96.3 started strategizing to lure disenfranchised WNOU listeners, industry experts said. WRZX-FM 103.3 officials also hoped to attract some of WNOU's male listeners, a segment it already targets.
For their part, Radio One officials are intent on hiring former WNOU on-air talent, which has major appeal with its 15- to 30-year-old listeners. Emmis laid off about 18 people when it killed WNOU.
Now that Radio One is picking up WNOU's format and maybe some of its staff, the battle for the station's young audience is in flux.
Fight for the ages
The biggest question is, who will capture listeners in their 30s, 40s and 50s? Media experts said the battle could trigger a massive--and expensive--marketing war.
"There's a lot of strength in WIBC and they have a lot of resources," said Scott Uecker, general manager of WICR-FM 88.7 and instructor of communications at University of Indianapolis.
WIBC, which launched in 1938, is the market's third-biggest moneymaker, with revenue hitting $9.15 million in 2006, a year in which it was one of few local radio stations to increase sales. The market's number one and two stations, country behemoth WFMS-FM 95.5 and rock powerhouse WFBQ-FM 94.7, each bring in nearly $15 million in annual revenue in this $90 million radio market.
WIBC will be better positioned to compete with the market giants once it moves to FM, which draws far more radio listeners than AM. WIBC is huge with listeners ages 55 and older, but with the move Emmis officials hope to flavor the programming to attract 40- and 30-somethings. Uecker said listeners WIBC attracts from other FM frequencies likely will come from music stations because talk radio has only one commercial outlet on the FM dial: WWFT-FM 93.9.
Cumulus Media launched WWFT in January in place of its Christian format, but the station has no local content and therefore hasn't fared well.
Cumulus' new market manager, Chris Wheat, who was formerly Clear Channel's longtime local market manager, promised to bring in local personalities and increase ratings at WWFT. Wheat said he would even consider hiring former WIBC morning host Jeff Pigeon, who resigned late last month, and former TV anchor Tom Cochrun.
"I think [WIBC's move] will bring a new group of listeners to the FM dial, and that could help WWFT," Wheat said.
Sports war starts landslide
While bolstering WIBC is a cornerstone of the deal, it was triggered by the decision to field an all-sports station--a move under consideration for at least three years.
Emmis is well-positioned to make such a move. WIBC has so many sports properties, industry sources said, it began having scheduling conflicts.
WIBC has deals with the Indianapolis Colts, Indiana Pacers and Indiana Fever, the Indianapolis Motor Speedway and Indy Racing League, and Indiana University football. Emmis' WLHK airs IU basketball games, and there are no plans to change that arrangement at this time.
"They got in bed with everybody," said Marty Bender, local operations manager for Clear Channel, which operates WFBQ , WRZX-FM 103.3 and WNDE-AM 1260. "They had a queen-sized bed, and they realized they needed a king-sized bed."
WIBC's schedule had become so clogged with sports, Bender said, that Emmis officials occasionally had to ask all-sports station WNDE to air some of its game coverage.
In further preparation for the switch to all-sports, Emmis inked a deal with ESPN Radio to add national content to the new AM station. That will leave WXLW-AM 950, now the local ESPN affiliate, out in the cold. ESPN will end its agreement with WXLW after December.
WXLW has a serious dilemma. Without ESPN content, it will lose much of its daily programming.
But the plucky station with less than 1-percent market share isn't backing down.
"Regardless of the letters ESPN, we have offered great sports content in this market for some time, and we intend to continue to do that," said Jeremy Bialek, WXLW's director of operations.
WXLW will continue to offer coverage of Indianapolis Indians, Ball State and Butler football, IUPUI and Notre Dame basketball, high school sports and special sporting events, such as the Wooden Tradition basketball tournament. The station, owned by Franklin-based Raven Broadcasting Inc., also will retain its local sports talk shows.
Officials for San Antonio-based Clear Channel think WNDE's market position is secure. WNDE also has a relatively small market share, but is viewed as a local radio sports leader.
"Of course, we're watching these changes," Bender said. "But we feel we have strong, original content."
WNDE has broadcast deals through Westwood One and Fox Sports that allow it to air the Jim Rome show, Major League Baseball games, NASCAR races and the NCAA Final Four, along with local fare such as Purdue University football and basketball.
But Emmis officials are promising that its new all-sports station will not play second string.
"This is not a throwaway station," said Tom Severino, Emmis' vice president and local market manager. "ESPN is the biggest national name in worldwide sports broadcasting and we want to meld that with this station, which we think will be the biggest local name in sports broadcasting."
Longtime media buyer Bill Perkins wonders if three all-sports stations can survive in Indianapolis, the nation's 40th-largest radio market.
"There are certain advertisers that are very hot on sports programming, especially those who want the male demographic," Perkins said. "But if this causes a war where the stations are undercutting each other for advertisers, it could turn very ugly and become financially damaging."
Perkins said cost controls will be as important as revenue generation in determining which of the players survive.
Revenue at risk
In the short term, Emmis' new strategy could backfire. Company officials don't know what will happen to the fourth-quarter ad revenue already booked for 93.1 FM, which is playing Christmas music until WIBC moves to the frequency.
Industry experts predicted 100 percent of it would be pulled, which could equal a $1 million loss.
But to Severino's surprise, only 25 percent of WNOU's advertisers immediately pulled out. A few committed to stay, he said, and the remainder are still deciding.
"Ironically, the all-Christmas music format is helping us save some advertising dollars, because the format has been done in this market before, so its ratings are predictable. We could preserve 50 percent of our advertising revenue."
Still, the changes likely will end up costing Emmis at least $500,000 in lost ad revenue.
Long term, Emmis officials have to be concerned about getting WIBC's AM listeners to follow it over to FM and making sure their new all-sports station can net at least as much as WNOU. Sports stations WNDE and WXLW combined didn't generate as much revenue last year as WNOU, according to BIA figures.