Format Fallout

Smooth Jazz Presents New Challenges

We've had a number of requests to look into the competitive environment that exists today between format-similar stations and urban stations. A quick look at the results show that, while they are not shocking, they are very revealing.

Let's take another look at smooth jazz. Smooth jazz is somewhat illusive as a format description of the music, attitudes and lifestyles of the format's listeners. While it is smooth, it's definitely not jazz in the true sense of the word. But regardless of what it's called, it has become massively popular and is a preferred choice for lots of urban adult listeners.

One of the continuing challenges facing urban adult stations in 2006 and beyond will be fragmentation, and one of the fragmentation choices is smooth jazz. For much of this decade, urban adult and smooth jazz have been working with much of the same music platform, some of the same artists, and definitely hoping to capture much of the same audience. When you look at the artists and overlap between the two formats, it's amazing, particularly in the re-current and gold categories. There area a lot of forces tugging at urban adult formatted stations right now, and the growth in smooth jazz (especially 25-49 demographics) is clearly a factor.

There are many different variations of stations within smooth jazz, and the problem for many urban adult stations is that companies with multi-million dollar investments, multiple properties and multi station programmers, is that they are all looking for formats that require less maintenance and yield a consistent profit. From a revenue performance or revenue per ratings point perspective, smooth jazz performed up to the levels of other formats and, in some cases, actually exceeded its expectations. It does this by increasing the likelihood that listeners will give more horizontal or vertical listening occasions in an era of reduced spending on outside marketing and on-air contesting.

While there are twists and turns, we've known for years that format similar stations share the same audience. What we didn't know was that often when an urban adult station is P-1 with a listener, the smooth jazz station is P-2. That means the first place the urban adult station's audience goes on Sunday morning, or when their favorite urban adult stations drives them away, is to the smooth jazz station. There are a lot of smooth jazz stations whose frequencies are the second button choice on the car radio. Statistics show that these smooth jazz stations are very listenable in middays, at work and on the weekends. There's an awful lot of sharing going on, and a shared radio can be a changed radio.

When we looked into the reasons for all this sharing and growth (much of it at the expense of even well-run urban adult stations), we found there were many. Some reasons are predictable and some are surprising. With its sexy sax melodies, passion-filled guitar riffs and dreamy Stevie Wonder, Bill Withers, Anita Baker and Luther vocals, the amorous aspects of smooth jazz are hard to ignore.

Additionally, smooth jazz stations all do a number of things right. They limit the number

of commercial interruptions per hour. Also, the smooth jazz stations owned by Clear Channel continue to practice the "less is more" strategy. That's the practice of emphasizing 15-second and 30-second commercials and shorter commercial breaks as a benefit to both advertisers and listeners. From what we can determine, Clear Channel is committed to "less is more" for the long run, even if it means slightly lower revenue in the short term. According to Clear Channel's John Hogan, who heads the company's radio division, demand and price for 15-second and 30-second ads were both up in

the first quarter.

The other thing that makes smooth jazz stations attractive is the lack of clutter. While they do contests and promotions, they avoid excessive talk, interviews and other involvement elements that seem to take longer on urban adult stations.

Now that we've looked at some of their strengths, what are the smooth jazz stations' weaknesses, and how can we take advantage of them? For one thing, most smooth jazz stations do not have strong, compelling morning shows. They tend to be pretty music intensive throughout morning drive. That means we can take advantage of them by continuing to develop and promote our morning shows. However, that means urban stations need a strong morning show capable of consistently making the target audience laugh, chuckle or think. Carrying the personality advantage through the day can certainly work to our gain.

The other thing that urban adult stations need to do to defeat smooth jazzers is to do a better job with their music. Going forward, the overall music mix for many urban stations needs to be younger and have more energy. Urban adult stations can no longer win with a steady diet of ballads and oldies. Then there's the "shedding and growing theory." Many urban adult stations have moved closer to sixty per cent of their music mix coming from the library. This is dangerous, and it has driven much of their younger core audience to mainstream adult stations and some of the more sophisticated adult audience to smooth jazz.

We need to react to Arbitron's recent younger sample issues. If we can't rely on the sample in the 18-24s, perhaps we may be able to find more stable numbers in 25-49 audience. It's a function of the format being over ten years old in many markets. The 18-24 year-old "music freaks" of the 90's are still fans of the format, but now they're in their thirties. Expect to see these trends continue even though there is a strong 18-39 and even younger population evolving that could fuel future urban adult stations. The problem is that, in the current Arbitron world, they may go unmeasured and urban formats will have to find audience stability with a slightly older mix while also working with currents that have appeal in the 25-39 and older demographics.

Let's look at one of the music areas that can help us win -- understanding the power of re-currents better. It's true that urban adult listeners are often impatient and want to hear new songs first, but is it the most important thing to them? Surprisingly, recent studies show that it is often more important to these mature listeners to hear their favorite songs more often. Favorite new songs are critical to an urban adult station's success. Ratings are built by playing the jams the target listeners love, yet urban adult stations often slow down the rotation on their key songs at the same time the audience is loving them the most. This means that while they take some risk in breaking new songs, they don't maximize the benefits of establishing a favorite new song or artist. Formats and listening patterns have changed dramatically in the past few years, yet attitudes toward managing rotations haven't been adjusted accordingly. In short, we haven't

always been accurate in determining burnout for our audience.

Counter-Balancing Burnout

There is a core belief that when a song comes out of heavy rotation it's is over-exposed or "toasted" and therefore needs to be "rested" for a period of time. Usually the opposite is true, and that's where some smooth jazz stations gain an advantage. They know this and they play those songs and artists that urban adult stations feel are burned. Listeners still want to hear songs even after they have reached recurrent status. The week after a

jam has been successfully established with the audience is the time when it has the most appeal to them as a new, favorite song. So it makes sense to keep playing the song with sustained frequency for an extended period of time. The speed at which most urban listeners can absorb new music is usually much slower than the pace at which our industry charts move through song life cycles.

By making sure your hottest songs and artists continue to receive substantial airplay after they move out of a current category into re-current allows urban adult stations to reinforce their station's reputation for playing the best new songs and takes away one of the weapons of their smooth jazz competitors.

Finally, it's vital when competing against a smooth jazz format competitor that urban and urban adult stations fully understand its time-spent-listening (TSL) and cume level appeal. In this way, you will know the approximate TSL and cume needed to drive a certain market share. By backing into these numbers, it helps drive the strategy and tactics needed to achieve these goals. Plus, it will help you develop a positioning strategy statement, most of which have become quite generic, overused, watered-down and, therefore, less effective ("The best mix of the 70s, 80s, 90s and today," for an example). Various versions of that tired positioning statement can be heard from coast to coast. A strong positioning statement is a promise to the audience that you never violate if you expect to occupy mind share. It should offer a unique benefit to the audience, a point of reference and leadership. This is where you get to play a little marketing judo with your smooth jazz competitor.

In today's highly competitive music matrix, urban stations are always under attack by constantly emerging new forms of competition, with everything from downloading, iPods, Internet, satellite radio and even peer-to-peer services. Now, more than ever, what goes on between the songs and the songs themselves is critical. Smooth jazz stations have taken huge chunks of audience away from our urban adult stations, and they will continue to do this until we do something. We have to create something big or the continuation of something great. We have to become major players and own the game.

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