In this week’s Programming To Win column, Richard Harker looks around the industry to see what the “hot” formats are in 2012. But how do you determine what is “hot” right now? By a few ratings books? By recent format flips? Harker introduces the concept of “format momentum” and how to calculate it.
By Richard Harker
Richard Harker
What are the hot formats right now? It’s an important question, but not an easy one to answer.
A high profile station might attract attention because of a nice ratings trend, but is that convincing evidence that a format is hot? Should other stations jump on a format bandwagon based on the success of just one or two stations?
Not necessarily.
There are plenty of examples of a few stations within a format doing well while most other stations in the same format struggle. As it turns out, virtually every format has a few winners even if most similarly formatted stations are doing poorly. Look at Smooth Jazz.
The reverse is also true. There are always laggards in a hot format, stations that can’t seem to succeed despite being in a seemingly hot format.
Given these realities, the best way to assess the health of a format is to look at every station in the format.
How well are the majority of stations are doing? Are there more winners than losers? And what direction are most stations headed?
We call it Format Momentum.
Over time, stations in a format tend to move in the same direction. If CHR music is hot, a majority of CHR stations will post gains in Arbitron. If CHR music cools off, the majority will start seeing declines.
It happens in all formats. For a time a format does well, then fades as another takes its place. For radio, a rising tide may not lift all boats, but it raises most of them.
Harker Research calculates Format Momentum by looking at stations in Arbitron’s non-imbedded PPM markets. We compare each station’s latest ratings to the comparable period in the previous year.
We tally the proportion of stations ahead or behind their 2011 numbers. If more stations are ahead, the format has positive momentum. If more stations have lost share in the past year, the format has negative momentum.
The accompanying graph shows the net difference between the gainers and losers for the largest music formats.
The big winner so far in 2012 is Urban AC. Three-quarters of Urban AC stations are ahead of 2011, while only one in five are behind. The net gain for the format is a plus 54%.
Hot AC is also hot. Gainers outnumber losers by a 2:1 margin, with a net momentum of plus 32%.
Urban is third at 23% followed closely by Alternative at 20%. Classic Hits, Rhythmic CHR, and Country follow.
Formats with low momentum are common, particularly large mature formats.
It simply means that the format has peaked. The majority of stations within the format have reached their maximum sustainable share, so month to month changes are only wobbles that tend to cancel each other out.
Formats can break out of this churning and go higher, but only if something new triggers renewed interest in the format.
Unfortunately, formats can break out going the other way if listeners are lured away by a format with higher momentum.
While Hot AC has positive momentum, Mainstream Adult Contemporary is slightly negative.
Adult Contemporary is a very popular format with several format variations.
Listeners often switch from one flavor of AC to another depending on which flavor is playing the better music, so Mainstream AC’s drift downward may be related to Hot AC’s positive momentum.
The worst performing music format we examined is Mainstream Rock (AOR). Declining stations outnumber growing stations by a ratio of two to one producing a negative momentum of -32%.
This is a reversal from last Fall’s results.
Last Fall 50% of Mainstream Rock stations were up over their 2010 numbers. So far this year, less than a third of AOR stations are up over their 2011 numbers.
It may be just coincidental, but the contemporary sides of both AC and Rock are doing better than their mainstream partners. If these trends persist, it will confirm that listeners are turning to newer music.
If there is a pivot towards the contemporary within Rock and AC, CHR doesn’t seem to be participating.
CHR has been churning sideways for some time, with equal numbers of CHR stations gaining and losing share. Last Fall 47% of CHR stations were ahead of their 2010 numbers. Today the number is 44%, a statistical tie.
As with AC, CHR is a large mature format. The format’s lack of momentum reflects its maturity. However, lack of momentum means a greater risk of a downside potential for CHR if some other competing format takes hold.
The elephant in the room regarding these shifts in listening is what’s going on with Urban formats.
The Urban AC format had a spectacular first quarter this year. Nearly four times as many Urban AC stations are ahead as trail last year’s numbers. A net gain of 54% in our analyses is unheard of.
Urban Contemporary is also on the move. Nearly two-thirds of Urban stations are ahead of where they were at the same time last year.
Share is a zero-sum game. It always adds up to 100.0. For Urban formats to grow, some other formats must decline.
Is Rock’s precipitous decline related to Urban’s explosive growth? Time will tell.
Although not shown on the graph, Christian formats also show positive momentum, as do Hispanic formats.
There are a few caveats that should be noted. The format designations are chosen by the stations themselves as indicated on Arbitron’s facility reports.
The momentum shown is based on 6+ trends, the only demo Arbitron allows us to publicly discuss, so different demos might produce different results.
We should also note that wobbles are a fact of life with Arbitron estimates.
Format trends over a single quarter may hint at the beginning of a long term trend, but you shouldn’t overreact. There are times when trends reverse themselves the following quarter for no other reason than a majority of stations in a format wobbled in the same direction.
What’s important is watching momentum over time. Important trends develop over time and continue in the same direction over multiple quarters.
Our continuing analyses will be somewhat hobbled by Arbitron’s new policy of holding back the ratings of non-subscribers.
By our count, nearly 200 radio stations have disappeared from published PPM rankers. That’s 200 data points that will no longer be part of our analysis.
It is unfortunate that facing a challenging uncertain future, radio has lost this valuable resource.
Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard’s 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch or contact Richard at (919) 954-8300
