An intersting article, though it doesn't apply directly to TC for a number of reasons--Traverse City is way, way smaller than Austiun and Raleigh, and we have a deficit of college-aged folks compared to these towns. But the article does give an interesting thumbnail of the radio biz.

Why the Scene Isn't Heard on Local Stations

From Raleigh News & Observer, November 13, 2006
By David Menconi

After Scott Gilmore moved to Raleigh from Austin, Texas, four years ago, he scanned the radio dial in search of a particular kind of station. He was 30 years old, an active music consumer and club-goer.

Gilmore wanted to find a commercial station reflecting that sensibility -- one playing a mix of local and national acts, plugged-in to the local music community. He was looking for a Triangle equivalent to KGSR (www.kgsr.com), Austin's flagship 'Adult Album Alternative' (Triple-A) station. KGSR plays current acts such as Beck and Gomez alongside Kris Kristofferson, Lucinda Williams, Joe Ely and other Texas acts, plus adult-alternative standbys including John Hiatt and Shawn Colvin.

He never found anything like KGSR in the Triangle, at least not on the commercial end of the dial.

�The closest thing we have to that here is college radio, which is so minute by comparison,' says Gilmore, who works as local director of operations for Sonic Drive-In. 'When I go back to Austin, it's almost like you can get the current pulse of the live venues and music scene there just from listening to KGSR. ' This cool inter-dependency between the local scene and the radio, they both help each other out.'

'But that's Austin,' he concludes. 'Here and most places, it's like there's no individuality between stations anymore.'

It's true that there's nothing like KGSR among the Triangle's commercial stations. Even when 'The River' (WRVA, 100.7 FM) called itself adult alternative before switching to classic rock last month, it played few songs you didn't hear elsewhere on the commercial dial. The lack of a true Triple-A station in the Triangle seems strange, especially when you compare it to Austin.

Austin is the 42nd-largest radio market in America; Raleigh-Durham is right behind at No. 43. Raleigh and Austin are both state capitals, college towns and high-tech centers. Both have bustling music scenes that draw national attention. And the dominant commercial stations in both markets play country music.

'It's really odd that there isn't a Triple-A station in Raleigh,' says Richard Harker of Harker Research, a Raleigh-based media research firm. 'Given the college population, age and makeup of the town and all that, you'd think it's a natural.'

What counts in Austin

KGSR isn't a ratings powerhouse. In Arbitron's just-released summer ratings, it registered a 3.1 share (representing the station's percentage of the total listening audience over age 12 during an average 15-minute period). That puts KGSR 12th in the market, well behind the 7.2 share of top-rated country station KVET-FM.

In terms of revenue, however, KGSR performs well for its corporate owner, Indianapolis-based Emmis Communications. According to the trade paper Inside Radio, KGSR's projected advertising revenue for 2006 is $5.5 million ' more than higher-rated Top 40, dance, adult-hits and classic-rock stations in Austin.

Triple-A stations may not draw the most listeners, but the format's audience tends to be loyal and demographically desirable.

'Triple-A is a format that can breed incredible loyalty, and it builds well,' says Inside Radio editor Tom Taylor. 'Very much like sports stations, which also have very loyal fans. Sports and established adult-alternative stations tend to outbill their ratings.'

In the Triangle, another point in Triple-A's favor is that something similar is already on the public-radio dial. Public station WUNC (91.5 FM) gives its weekend nights over to 'Back Porch Music,' an acoustic-roots variant on Triple-A similar to KGSR.

If an audience for a commercial Triple-A station exists in the Triangle, it's probably among public-radio listeners ' especially WUNC, which Taylor says is consistently one of the top-rated public stations in America. Historically, noncommercial stations' listenership hasn't officially counted in Arbitron's ratings. But that policy will change when the fall's ratings are released early next year.

The number should open some eyes. Unofficially, WUNC drew the equivalent of a 6.4 share for the spring quarter, according to the Radio Research Consortium. That would have put WUNC fourth in the Triangle, just ahead of top-40 station WDCG (105.1 FM).

A format of the '90s

That's where the good news about Triple-A's prospects in the Triangle end. The very things that make the format appealing to a certain type of listener ' broad playlists, local idiosyncrasies ' work against it from the industry's perspective.

'There aren't many Triple-A stations, and they're all different,' Taylor says. 'It's amazing how little overlap there is among stations on their play lists. Coming up with a meaningful chart for Triple-A is a fearsome thing.'

Taylor also observes that the biggest problem with Triple-A in the Triangle is that somebody should have done it 10 or 15 years ago. The most successful alternative stations ' KGSR, KFOG in San Francisco, KINK in Portland, Ore. ' tend to have been doing the format for a decade or more, usually under the guidance of a program director with close ties to the community. In Austin, Jody Denberg has been KGSR's program director since 1990.

The other significant aspect of that 10-year figure is the Telecommunications Act of 1996, which deregulated radio and sent it down a path of homogenization, consolidation and skyrocketing prices for stations. In the wake of deregulation, strong FM signals cost tens of millions of dollars. Stations are so expensive that jazz, blues, conscious hip-hop and most other niche formats are primarily relegated to public stations.

Triple-A stations such as KGSR represent one of the last vestiges of the old-corner-store aspect of commercial radio. They were grandfathered in because they were able to build their audiences before consolidation made such a thing impossible.

'The Triple-A stations that are most successful started out being run almost like nonprofits, by smaller owners who were more artsy and less Wall Street-driven,' says Jon Coleman, founder of the Triangle-based market research company Coleman. 'Because of that, they were able to stick with it a long time.

'For years, KINK in Portland was kind of this toy that the company that owned it played with. Then it slowly developed, and they woke up one day with a reasonable audience and a viable product.'

To tend the bottom line

Still, Triple-A's 'reasonable audience' is just that, reasonable rather than mass-appeal. Coleman estimates that a station such as WRDU (106.1 FM), which recently switched from classic rock to country, would cost $40 million to buy. At that price, taking a chance on Triple-A ' which is difficult to program, takes a long time to develop and offers uncertain odds for paying off ' would represent a huge gamble.

The safer, easier play is to go after a successful station's audience with a similar format. That's why both WRDU and WCMC (99.9 FM) are looking to challenge longtime country powerhouse WQDR (94.7 FM).

'What the suits do is look where the money is,' says Harker. 'The No. 1 billing station in town is WQDR, so there's an obvious willingness on the part of advertisers to buy country. If you can offer an alternative to the top-billing station and price it less aggressively, you're exploiting a sales opportunity: 'We're playing country, too, and it costs less to get on us.'

'But if you're launching a brand-new format,' he adds, 'you're trying to create an audience from scratch. That's hard to do, even though it seems like the obvious solution to a ratings problem is to do something nobody else is doing.'

Another factor is that a Triple-A station wouldn't have to compete just with other commercial radio stations. WUNC and other college and public stations in the area would take a slice of an already-small audience, which has grown accustomed to hearing its music through Internet streaming, satellite radio and iPods. That's one reason why overall time spent listening to radio has declined 10 percent since 1998, according to Arbitron.

'The comment you hear all the time is that people yearn for something adult but not as commercial,' Coleman says. 'The problem is that the people complaining don't like the same things. It's hard to find something that will really generate an audience. If you tried to do it in Raleigh, you'd need two or three years before you developed a sellable core audience. You could do everything right, and your rating might be 2.5. If you've paid $40 million for a station, that's just not enough.'

The bottom line is, don't hold your breath.

'When you take all the variables into account, it is more complicated than it seems,' Coleman agrees. 'That said, however, I don't disagree with people who say there's an audience in Raleigh for that kind of station. It's just harder to find, and it requires more patience.'

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