Market
Analysis Paper
The
Station’s name is KWWW, and it is a telling one. The idea behind it is “to take
the internet to the airwaves” as its slogan says. Web radio has already existed
for some time but nobody has really attempted to create a radio station that
people can listen to on a conventional radio while surfing the net or working
using the net. You cannot watch TV when you are using the computer, but you can
listen to the radio (but KWWW will also be available via the web). The basic
idea is that the station should be tailored to the needs of generation@, a demographics to be talked about later. The program will
not be filled with dry technology or stock market news, but mostly with music
and features on the latest web-topics, with a “fun” approach. The listener will
also be offered different ways to interactively influence the program.
The
format of the station will largely be Contemporary Hit Radio, or Top 40, the
reasons for that being explained later. However, to enlarge the desired
demographic the music selection will also consist of alternative rock/modern
hits (CHURBAN). It will be an FM station, like most CHR stations (better sound
quality).
Top
40, as the name suggests, focuses on playing music that is high up in the
charts, with less regard to a consistent sound than A/C, for example. The
target audience consists of teens and young adults. The format was already
around in the 1950s. It has undergone some changes, most notably concerning DJ
presence, which was sharply reduced in the 1960s to “streamline” the stations.
Having regained some ground in the ‘70s, DJ presence was cut again in the ‘80s.
That was also the time when the format was most successful, with many Top 40 or
Hot Hit stations at the top of the ratings in their markets.
One
of the fundamental flaws of the format is the fact that the diverse music
styles that can be found at the top of the charts are hard to incorporate into
one program. Rappers might not appeal to people who would listen to other “hot”
music, for example. To counter the fact that CHR is becoming less popular (it
was called the statistical loser of the 1990s), the format is moving more
towards the “street sound”, incorporating dance-rap and as CHURBAN
alternative/modern rock.
The
“classical” CHR format addresses mostly listeners from age 12 to 18. To
increase the target audience, the format of KWWW will also incorporate
different, more “adult” music styles, most notably alternative rock to draw
audiences from college stations. KWWW’s primary target audience ranges from
ages 12 to 29. This includes teens and young adults who use their computers and
the net mainly “for fun” (surfing, playing games), but also in the segment
above 20 many internet-savvy college students and young people who might be
working for internet companies already. This vaguely defined group is called
generation@ by some market researchers and this term will be used for
convenience. Men will still be in the majority among the listeners, reflecting
the general demographic makeup of internet- and computer users. For this
reason, the sound will rather focus on harder rock music than soft hits. The
ethnicity of the target audience will be very diverse, representing the Bay
Area’s ethnic makeup. Education levels in the audience will be above average,
reflecting a general feature of internet users as well as the fact that many
college students or graduates will be among the listeners. Last, but never least
the target audience is economically very attractive: The school kids have their
pocket money to spend, the internet professionals their often exorbitantly high
salaries. Moreover the target audience is willing to spend that money, is
willing to consume. They are less reluctant to spend money than their parents
and have grown up in an age of economic prosperity. They often have certain
hobbies on which they spend money, for example computer hardware and software.
Their interest is easy to capture, but they also lose interest fast and are
quick to switch to a different station. A varied music selection and strong
listener-station ties are therefore essential.
As
for advertisers, the target audience that has been outlined is the most
desirable. They will buy everything that is advertised as being “cool”, from
movies to online-shopping to vacations to high-tech toys. Advertisers might
include (but are not limited to) electronics manufacturers, film companies,
leisure/travel companies and predominantly dot.coms, but also major brands,
from Pepsi to Ford. Mostly advertisers will try to make their commercials
attractive to men, as they will probably be a majority among the listeners (but
with more and more women using the net, this will probably change in the future).
Another benefit for advertisers is that the teens who listen to the program
today might be the executives of internet companies tomorrow, with much more
money to spend.
Although
CHR has lost audience to formats like Urban Contemporary, a revamped CHR as
described above as well as the right mix of topics to attract the internet
crowd should prove sufficient to capture large parts of the 12-29 audience.
Top
40 or CHR, plays a diverse mix of top hits. As mentioned before, KWWW will move
that format slightly towards alternative rock to attract more listeners. To
appeal to young listeners, who don’t like talk/news, 90% of airtime will be
music. Talk elements will include dynamic promos with lots of sound effects to
appeal to young listeners. One could think of a station ID using a melodic
rendition of the modem sound. There will also be news about “hot stuff” for the
computer and new web pages. There might also be an hourly feature about some
topic that is of interest to the audience (game reviews, movie/sci-fi/fantasy
topics, music news, computer-related health problems, etc.). Keeping with the
format, DJ presence will be cut to a minimum, one or two real air-personalities
would be enough.
In
the mornings, the sound will be more dynamic than later in the day, to get
listeners a good start into the day and to keep them going when they listen to
the radio while working. Short weather and news updates will also be broadcast
at that time of day (but only then), for people commuting to work. Unlike other
stations, the prime time for KWWW is the night, from
The
central feature of KWWW should be the possibility for surfers visiting their
website to determine the next title to be played. As soon as a song has started
playing, polling for the next title would begin and end exactly at the end of
the last song. After the station jingle, the computer would automatically play
the song that got the most votes. There are some requirements for this idea to
work, of course. The station must have an expensive, fully automatic broadcast
system. The range of titles listeners can choose from should also be adapted to
fit the format. There should also be the rule that a particular song cannot be
played more than once in an hour.
Generally,
CHR stations use many ways to connect with the listeners. They let listeners
talk on the air (e.g. when they just won something), they often offer prizes
and sponsor large events like concerts (and are present there) and they operate
a website to get listener feedback. KWWW will use some of these elements, e.g.
offering games to win prizes/website. The station will also try to advertise
its name, mostly using banner ads on other web pages (“turn your radio on…”, or
a link to their web-radio). Frequent live-chats with the producers and DJs of
the station will also play an important role to let the listeners interact. The
feature of polling to determine the songs played on the air is the cornerstone
of audience connection: if listeners get the feeling that they can directly
influence the character of their favorite station, they will develop a strong
tie to that station.
A
good idea might also be a 20-second description of “the website of the hour” at
the full hour. With hundreds of pages
It
might appear difficult to create strong audience connection to the station
without much DJ presence, but the format has proved successful and the benefits
seem to outweigh the downsides.
The
CHR format seems highly successful in the Bay Area market, with 3 CHR stations
among the top 11 stations in the Arbitron ratings for summer ’99. Z 95.7 is
definitely a typical CHR station, with KMEL and Wild 94.9
rather leaning towards Rap/Dance music.
But
the fact that three stations are successful with the same format also means
that the format is highly competitive and that the market might already be
saturated. Furthermore, analysts say that the Bay Area has the highest
concentration of media in the
CNET
radio has some similarities to KWWW (orientation towards internet-users), but
KWWW would be rather focusing on younger audiences (less talk/news, other
topics) and more music.