Radio InSights

iHeart Stations Through the Roof. Is it Voltair?

No group has embraced Voltair as much as iHeartMedia.

Rumor has it that the company has installed hundreds at its stations and continues to buy more as they become available.

If you compete against iHeart in a PPM market, you are probably competing with Voltair.

Because so many of the group’s stations are using Voltair, the company’s recent Nielsen performance serves as a useful metric to measure the impact of the box.

We’ll get into the details in a moment, but here’s the bottom line:

This year iHeart has been able to increase the number of stations gaining share by 50%.

In May 2014 only 42% of iHeart stations were able to better their 2013 May numbers. The percentage of improving stations reached 63% this May. That’s an increase of 50%.

Only a third of iHeart stations declined this year compared to 53% last year.

We’ve been doing these analyses for more than ten years, first with diaries and now PPM.

We’ve written often about how most months the ups and downs hover around 50%.

In any given month you can expect half of stations will go up. The other half will go down.

For a large group to increase share at two-thirds of their stations over the same time period is unheard of.

The over-all performance is pretty amazing, but the details are even more striking.

Look at the graph above. It shows the distribution of gains over the two time periods.

Over the 2013-14 time period most of the station gains were less than 20%. Fewer than one-in-five stations managed to grow their share by more than 20%.

This year the percentage of stations that increased more than 20% doubled to 31% of all the group’s stations.

Maybe iHeart programmers got a lot smarter in 2015, or maybe iHeart stations are finally getting credit for listening that PPM has been missing all along.

The gains were pretty much across most formats too.

We compared the median percent change from the first period to the second in each format where iHeart has a significant presence.

Think of median as the half-way point in a ranker.

Half of iHeart stations in the format did better than the median. Half did worse.

As the chart at the left shows, the median performance for major formats in 2014 was anywhere from flat to a decline of 10%.

Country was the only format where iHeart managed to show a gain in 2014.

Every one of the formats turned around in 2015 with gains from 5% to 15%. Even Country managed to exceed its 2014 performance. Quite a turn around.

Given iHeart’s soft performance in 2014 we would have anticipated a small uptick in 2015 without the stations doing anything differently. In technical terms it is called reversion to the mean.

It is the magnitude of the gains that suggest something more than just a reversion bounce.

Knowing the flaws in PPM and the fact that many formats are not getting credit for listening they have had all along, a far more reasonable explanation is that Voltair has had a major positive impact on iHeart station ratings.

To understand the impact of iHeart’s decision to install Voltair, just add up the shares of all PPM measured iHeart stations.

Those shares increased nearly 9% after the group started installing Voltair. That’s a lot of listeners.

And those shares came from iHeart’s competitors.

Still believe that PPM is accurate and does a good job crediting stations for all the listening they deserve?

You must not work for iHeartMedia.

Did Nielsen Kill the Radio Star?

Did Nielsen Kill the Radio Star?

That’s the title of a well written investigative story at ESPN’s FiveThirtyEightLife. Written by Carl Bialik, it examines the impact of PPM on radio.

It is to date the most thorough story on the growing questions surrounding PPM’s ability to accurately identify radio listening and fully credit radio stations.

It is a piece well worth reading and rereading.

One quote caught our attention become of something that happened a few weeks ago.

Jon Miller, Nielsen's VP of Audience Insights, standing before a room of Talk Radio broadcasters flatly declared that PPM accurately measures Talk Radio listening. (See the video here. Skip to 35:28 to hear my exchange with Jon Miller.)

We're still trying to figure out what Voltair is doing but we've been confident from day one that our system does give the proper amount of credit.

How do we square his confident assurances with an Arbitron engineer quote in the story:

We had concern about various types of formats. It was thought that classical and some talk formats would be challenging to encode and possibly decode reliably.

So inside Arbitron engineers knew that some formats would not encode and decode equally, a point that we have been writing about for seven years. 

Nielsen’s official communique on Voltair was promised before the end of June.

We hope it will include a response addressing the Arbitron engineer's confession that some formats are "challenging" for PPM to accurately credit.

Now We Know: Nielsen PPM Short-Changing Radio

Rumors of double digit rating gains using Voltair, a new processor, are fueling growing confusion over its implications.

Is it really true that a new processor can boost ratings, and by double digits?

And if true, what does it say about the accuracy of Nielsen PPM rating estimates?

Much of the confusion is due to a lack a data.

Stations using the processor are reluctant to even admit they’re using one let alone share ratings information.

But it’s pretty hard to hide.

Every month now we see growing numbers of stations with pretty suspicious rating spikes.  Are we to believe that all these stations just got smarter...and all at once?

And how many "best book ever" stories are we going to read in Nielsen’s monthly rating reports before somebody admits that maybe the box is behind many of these records?

Are we to believe that it's just coincidence that the success stories started appearing soon after Voltair's launch?

Given the lack of hard data, Harker Research decided to do something about it.

We set out to find stations about to install Voltair that would be willing to share ratings data with us so we could see for ourselves what impact Voltair could have.

What we are about to share is the first verified pre/post Voltair data, and what we found was just as amazing as all the rumors.

Two stations agreed to share their Voltair experiences with us.

We were able to track ratings as Voltair was installed. We were able to establish a pre-Voltair baseline of ratings, and then we were able to see what happened with the ratings after the launch.

We were also able to confirm that these markets were pretty quiet over this time, and that the two stations we followed changed nothing other than installing Voltair. These stations were also the first in their markets to get Voltair.

Like all other Voltair clients, the two stations insisted on anonymity, so we won’t be identifying the stations, markets, or formats. Both formats are highly competitive mainstream formats.

Station A was our first look at Voltair, so we looked at full week numbers.

For Station B we did something different. We looked at Voltair’s impact on morning drive. 

Station B plays very little music in morning drive, and it has been reported that PPM is particularly cruel to talk shows.

Since the encoding process does a poor job with spoken word, we wanted to see what impact Voltair would have on morning numbers. We’ll report what happened with morning drive, but we’ll also touch on full week numbers for Station B.

Ironically, Voltair increased both stations’ market share by more than twenty percent, but how that growth came about differed between the two stations.

First, a little background.

Voltair is designed to process station programming to create more consistent encoding. More consistent encoding increases the likelihood that decoders will be able to identify the stations to which panelists are  exposed.

So Voltair should have minimal impact on cume. All it takes is one successful code identification for a station to get credit for a cume listener.

The ratings benefit of Voltair should come primarily by increasing time-spent-listening (TSL).

If Voltair improves the encoding/decoding process, then listening normally missed by the meters will be picked up.

This might manifest itself as longer listening spans, but it could also increase TSL by increasing the number of episodes of listening, what Nielsen calls Occasions.

A 2011 analysis by Arbitron (since taken down) concluded that top performing stations in PPM didn’t have longer listening spans than weaker stations. Instead, leading stations had more Occasions of listening.

So to see the impact of Voltair, we began by looking at its impact on Occasions of listening.

As the graphs illustrate, both stations dramatically increased Occasions. Station A increased full week Occasions by 26%, and grew market share by a similar percentage.

Station B’s morning drive Occasions increased by a whopping 61%!

Full week TSL for Station A rose by 33%, but Station B’s full week TSL increased very little. Almost all the growth was in morning drive.

Station B saw its full week cume increase slightly more than Station A.

Station B’s talky morning show attracts a different audience from the rest of the day. We suspect that PPM was not catching the morning listeners, so the station was losing much more than just a little TSL.

Consequently, when the station started getting more credit in morning drive it gained Occasions, quarter-hours, and cume.

While this is the most definitive published analysis of Voltair to date, it comes with several qualifications.

We’ve only looked at two stations and two formats. We can say with confidence that the two stations’ gains were a direct result of Voltair.

However, as we have repeatedly emphasized, results will vary across formats and content.

The quality of PPM encoding depends on content. Some content encodes well, other content not so well. Voltair’s potential for improving a station's ratings ultimately depends on how poorly PPM is encoding the station's content.

Some stations will benefit more than others. Based on Station B’s morning gains, stations with talk formats should be particularly concerned about PPM’s "blind spots."

Some formats may not benefit at all, so don’t assume that your experience will be similar to either station.

The most important lesson here is that the rumors about Voltair helping improve ratings are true. This is the clearest evidence that PPM as implemented is flawed.

PPM does not capture all listening, so it under-estimates radio listening–potentially by a lot for some formats.

The solution is for Nielsen to admit that the problem exists and agree to a time-table to fix it.

It is likely that PPM will never be perfect. It will never capture all listening, but missing 20%, 50%, or more should be unacceptable.

 We invite additional Voltair users to confidentially share their experiences so that we can have a clearer picture of PPM and its weaknesses. Collectively we can finally get answers to PPM questions never asked as PPM rolled out.

The PPM Talk that Nielsen Should Have Given

Think that the technology behind PPM is simple, flawless, and without potential pitfalls?

You should have been in Las Vegas to hear Dr. Berry Blesser, Director of Research for The Telos Alliance, describe the science and technology behind watermarking like PPM, the process of embedding and then retrieving information concealed within audio.

It was the second NAB engineering talk on PPM at this year’s convention, this one delivered by the technical expert the US government called on when the Feds decided to look into complaints about PPM.

The issues and challenges Dr. Blesser discussed impact every radio station in PPM markets.

He delivered the sort of information Arbitron should have delivered in 2007 instead of the happy talk that filled NAB convention PPM sessions back then.

We’ve asked Dr. Blesser for permission to reproduce his PowerPoint presentation, and we intend to publish the presentation at Radio Insights. In the meantime here are some key issues to ponder.

The ability of PPM to determine which station a person is listening to depends primarily on the content the station is broadcasting. The greater the proportion of content between 1 kHz and 3 kHz, the “louder” the embedded information, and the more likely you’ll get credit for the listening.

That’s because PPM codes ride beneath the content in this range, so if there is no content, there is no code. You might as well be off the air.

The amount of information in this range varies by format, but even within formats, the density of 1-3 kHz information can vary, so the belief that some formats do better than others in PPM is only partially correct.

Our take: Start monitoring the spectral content of your programming. At least download a Spectrum Analyzer iPad app and pay close attention to how much content falls between 1 and 3 kHz.

Talk stations and music stations with morning shows that talk a lot may be surprised how seldom they broadcast 1-3 kHz content.

A second issue is ambient noise in the listening environment.

Ambient noise can compound the problem of getting credit. The PPM encoder adjusts the level of the codes based on the level of the content, maintaining a level that is a fraction of the content.

The problem is that the encoder has no idea what environment a listener is in, or what the ambient noise level is.

If your 1-3 kHz content is low, the code level is low too. But what if it’s drive-time and a large proportion of your panelists are listening while driving? There’s a good chance you’re not going to get credit for a portion of that listening.

Ironically, this point was driven home during a separate presentation by John Kean, Senior Technologist at NPR. He presented results of an NPR study showing how people listen to the radio in noisy environments.

People do not turn up the radio to fully compensate for greater noise. They just listen at what effectively is a lower level.

Worse yet, a great deal of ambient noise like road noise falls into the 1-3 kHz range, further burying the PPM codes.

Combine a low level code with a noisy environment, and you are probably going to lose credit for some quarter-hours.

We recently wrote that PPM can kill formats, but it turns out that the problems are much broader than we thought. Every format has some content that encodes poorly.

Radio stations using Voltair are finding that some songs don’t encode well. They are either pulling the songs or giving them sound codes so they don’t play around each other. They also may only play them late in the quarter-hour.

It turns out that compressed audio like MP3s don’t encode well. MP3s tend to lack a dense mid-range so there’s less energy for the PPM codes to hide behind.

After the presentation we tuned around the Las Vegas radio dial with a Spectrum Analyzer. The first graph at the left is a well known talk show host speaking. The energy (think volume) of the content is the vertical axis. The frequency is the horizontal axis. (Click on them to enlarge.)

Notice the absence of content in the 1-3 kHz range. This is an extreme example where the host was speaking quietly for effect. At other times there were opportunities for the encoder to inject information, but for much of the time the encoder was probably silent.

The second example is a music station close by on the dial.

The song shown here is a pop alt hit, and while it looks much different it too shows low content in the critical range relative to the rest of the spectrum. There’s more content for the PPM codes to hide behind, but not as much as other songs the station played.

Listening to Dr. Blesser speak we were reminded of the many panels at NAB Radio Shows where program directors talked about PPM and how they were shutting up their jocks.

The conventional wisdom was that PPM panelists don’t like talk. They just want lots of music. Little did we know that it was the meter not the panelist that didn’t like talk.

Much of what we’ve “learned” about PPM is just plan wrong.

 

Can PPM Kill Formats?

Can a format have lots of listeners but low ratings?

Yes, if we’re talking about PPM ratings.

Ratings are no longer just a measure of how many people listen to a radio station.

PPM’s technology creates winners and losers based also on the sound properties of the content, the level at which a format is listened, and the ambient noise surrounding the panelist.

Accurate PPM ratings require that the meters reliably detect and identify radio stations over time. And as it turns out, the process is not 100% reliable.

When PPM launched, Arbitron claimed that if a listener could hear the radio, the meter would pick up the station and properly credit it. But now we know that isn’t completely true.

Independent research has shown that ambient noise can mask the encoded signal so that no listening is recorded. Research has also shown that a radio station played in the background might not be loud enough for the meter to pick up the encoded signal.

And research has shown that a radio station with dynamic programming that includes occasional periods of silence or low level audio (think Classical or Talk radio) might miss some of the credit it deserves as the meter struggles to identify the station.

All this may be news to you, but it has been documented here at Radio Insights for years. You can catch up by reading earlier posts. Start here, hear, and here.

To understand how PPM can kill formats, we have to go back to the very beginnings of Arbitron’s efforts to sell PPM to broadcasters.

Early in the development of PPM there were concerns that the analog encoding tones would be audible. Arbitron’s solution was to inject the encoding data at a much lower level than a station’s audio, and to maintain the level difference regardless of the level of a station’s audio.

If a station’s audio level increases, the level of encoding tones increases as well. More significantly, if the station’s loudness drops, the encoding level drops as well.

If a station goes quiet for a moment, encoding stops.

And if there’s no audio around 1 kHz to 3 kHz (the frequency range used by PPM) to mask the encoding, encoding stops.

Arbitron’s assurances that listeners wouldn’t hear the encoding seemed to satisfy US broadcasters.

The problem was that the industry never demanded that Arbitron prove that the meters would properly credit stations at the encoding levels the company settled on.

Now, a decade into PPM we know that PPM is costing radio stations quarter-hours. And the number of quarter-hours lost varies by format.

Remember the death of Smooth Jazz at the hands of PPM? Smooth Jazz was the first format to suffer death by PPM.

One by one, Smooth Jazz stations disappeared as markets switched to PPM. Stations that had been pulling respectable numbers in the diaries virtually disappeared in PPM.

Most Smooth Jazz eulogies pointed to PPM’s role, but blamed the format, not flaws in PPM technology as the root problem. The assumption was that PPM was accurate and that the format really didn’t have as many listeners as it thought.

It didn’t occur to anyone that PPM might not pick up a format like Smooth Jazz played in the background.

New/Talk is another format that took a hit when PPM replaced the diaries.

Spoken word formats are filled with pauses and moments of dead air. As far as PPM is concerned, being silent is no different from being off the air.

It is also a format with deep voices and often not a lot of content within the requisite 1-3 kHz range. With infrequent masking content, there’s little chance that a meter will accurately log listening to News/Talk.

Now after a decade of willful ignorance of these weaknesses within PPM, broadcasters are discovering that they can increase their ratings by processes the encoding signal to increase the chance a meter will properly capture the listening.

A company has been quietly testing a device that optimizes the encoding process. Some test stations are reportedly seeing 15-20% rating gains.

This in line with estimates made in a 2004 research study that suggested that PPM might be missing upwards of 20% of exposed listening.

Maybe if this device had been around as PPM rolled out, Smooth Jazz would still be around.

Maybe radio would look a lot different today.

When a Trend is Not a Trend

Nielsen’s Newswire rating analyses create headlines with their portrayal of rating trends like a horse race. For example, this from a recent release:

“With the release of the August PPM radio listening trends, we can see which formats benefitted the most from summertime audience trends, and a surprise contender has emerged from the pack.”

The problem is that these “trends” are not what they seem.

Nielsen claims that the analyses are a national measure of the health of formats. Their press releases describe formats as “cooling” or “falling” giving the impression that those formats must be declining.

The truth is that Nielsen’s trends have nothing to do with how the majority of stations in a format are doing. In fact, the majority of stations in a format can be trending up at the same time that Nielsen is telling us that the format is declining.

The ratings service derives their “trends” by crunching all radio listening in the 45 non-imbedded markets to determine a national PPM Average Quarter-Hour (AQH). If the total AQH (ultimately expressed as a share) increases, they speak as if the format is growing. If AQH declines, the format is too.

The problem with this approach is that large markets contribute most of the AQH. More than a quarter of all PPM listening takes place in New York, Los Angeles, and Chicago. As the graph at the right illustrates, half of all listening takes place in the top ten markets (click to enlarge).

It means that the Nielsen analyses mostly reflect what's happening in the top markets.

A major swing in one direction for a station in the majors can nullify a swing in the other direction on the part of dozens of stations in smaller markets.

The Nielsen trends are also sensitive to format counts. Over the past year almost fifty new Sports stations have signed on. Is it any wonder that according to Nielsen:

Sports radio, already on the uptick as we reported last month, shot upward in October, setting several records along the way.

Every new station contributes quarter-hours to a format’s AQH. The more stations that move into a format, the higher the format’s share.

This phenomenon can result in upbeat Nielsen reports on formats where the majority of stations in the format are losing share!

A positive trend generated by growing numbers of stations reflects the industry’s belief in a format, but it tells us nothing about whether the format is growing or fading with listeners across the country.

Combine the impact of large markets with the impact of changing format counts and the Nielsen reports can be very misleading.

Not long ago a Nielsen report fueled a “Talk Radio is Dying” meme, leading to a great deal of hand-wringing within the format. According to Nielsen, Talk radio was seeing significant declines in the national trends.

The problem with the analysis was that most of the “trend” was actually driven by what was happening at a few outsized major market Cumulus Talk stations.

WABC, KABC, WLS, KGO, and others had lost a third of their collective quarter-hours. No reasonable rate of Talk station growth in the other PPM markets could make up for the cratering of these few stations.

The listenership losses were the equivalent of an entire small PPM market signing off.

Remember this next time you see a Nielsen report on the health of your format. It really tells us nothing about how the majority of stations within your format are doing.

To find out how a format is really performing, we have to see how all stations in the format are doing, not just a few large market stations.

We’ll show you how that is done in the next Radio Insights.

Lessons from New York and LA: Content Matters

Content matters.

It ought to go without saying that people choose a radio station based on the quality of its content. History has shown that radio stations with better content beat stations with poorer content.

If you had any doubt, recent rating trends should erase any question.

And the implication is clear: Stations that have cut programming costs by cheapening their product will ultimately pay a significant price for their actions.

In January of this year Rush Limbaugh switched affiliates in New York and Los Angeles. In each case, Limbaugh left the leading News-Talk station and moved to a much weaker competitor.

Now with six months of PPM data we can see what happened. In both instances the stations that added Limbaugh benefited, and the stations that lost Limbaugh took major ratings hits.

Content matters.

Lose an important programming element that draws listeners to the station and you’ll likely lose listeners. If your competitor capitalizes on the change, perhaps by hiring a key personality you let go, you could ulitimately pay for it.

The graph illustrates what’s happened in New York and Los Angeles over the past few months.

We created an 6+ share index based on station ratings in the fourth quarter of 2013 before the switch. We then calculated how ratings have changed since Limbaugh switched.

Indexing this way enables us to easily compare rating trends across markets. All stations start at 100. An increase to 200 means a station’s share has doubled, 300 tripled, and so on.

An index that moves below 100 means the station has lost share. An index of 33 means that the station only has a third of its original audience. Put another way, an index of 33 means the station has lost two thirds of its listeners.

In Los Angeles, KFI has drifted down and stands at an idex of 78. That tranlates into a loss of about half a share point. The station has been a dominant News-Talk station for years, and it remains so, but even it took a hit from the departure of Limbaugh.

Given PPM’s rating compression, a half share loss can add up to a three or four station rank decline.

KEIB, Limbaugh’s new home, saw immediate gains. The station now indexes at 265. While it still ranked well below KFI,  KEIB has seen its full week AQH nearly double, and Limbaugh’s time-slot numbers nearly triple. (All comparisons are based on three month averages to smooth out wobbles.)

We should note that Clear Channel owns both KFI and KEIB, so the move was made for strategic reasons. The fact remains, however, that the group's flag-ship News-Talk station took a hit.

In New York the changes have been much more dramatic.

WABC lost a quarter of its 6+ AQH in the first month without Limbaugh, and has continued to lose listeners virtually every month since.

Today the station indexes at 35, indicating that two thirds of the station's quarter-hours have evaporated since the beginning of 2014.

WOR closed out 2013 with about half the quarter-hour persons of WABC. Today the station indexes at 370, suggesting that the station share is nearly four times its pre-Limbaugh level.

After years of consistently trailing WABC, WOR is now essentially tied with WABC in full-week AQH. During Limbaugh’s time-slot WOR has tripled its numbers and bests WABC by a significant margin.

Of course WOR also acquired Sean Hannity, and WABC made several personality changes in addition to adding Limbaugh, but these additional factors do not change the lesson:

Content matters.

It matters in every format, in every competitive situation. Listeners have options, more than ever. They will not remain loyal to stations that stop delivering on expectations.

 Too many broadcast leaders have decided that cheaper trumps better, that downgrading the product to squeeze a little more profit out of local radio is good business.

The next quarter’s bottom line might look a little better, but the lessons of what’s happened in New York and Los Angeles suggest that the gains are short lived. The negative long term implications will long remain after the momentary bump in profit is forgotten.

 

Talk Radio 2.0

Is Talk Radio dying?

There are plenty of pundits who think so, but as we recently pointed out every mainstream radio format goes through repeated life cycles. At some point every format seems to be near extinction only to come roaring back, renewed and stronger than ever.

We’ll save a deeper discussion of format life cycles for a later day, but here’s the one aspect that we need to keep in mind as we debate the health of Talk Radio: As a format gains more momentum it attracts listeners of a certain demographic and psychographic.

These listeners become the core audience of the format, and continue to listen as they age. The core audience grows older, moves through the demo, and ultimately ages out of the demo.

The format’s momentum stalls because the format cannot replace its aging listeners with younger listeners.

Talk critics delight in pointing out Talk Radio’s aging audience as proof that Talk is on its last legs, but every format reaches this point in its life cycle.

At this very moment virtually every mainstream format is aging. CHR, AC, and Classic Rock as well as Talk are all getting older.

(Consolidation and radio’s current fixation with centralized programming is worsening the problem, and the major groups that operate cookie-cutter formats across markets are going to pay a price in wilting market shares. But we digress.)

The basic problem is this: People don’t listen to their parent’s radio stations.

Listeners who are aging into Talk Radio’s prime demos have parents who listened to Talk Radio. They may be as politically engaged as their parents, they may share many of the beliefs and viewpoints of their parents, but they still want their own radio station.

If you’re in a format that’s getting a little too old, you have a choice. You can stick with the old format and squeeze as much money out of the aging audience as possible, or you can bite the bullet and recreate the format for younger listeners growing into the target demo.

History shows that the first option makes more money in the short term, but only delays the inevitable. Worse, it opens the door for a new competitor to reinvent the format and hasten your station’s demise.

(There are rare heritage stations that manage to reinvent themselves every decade or so, but the odds of success are low, particularly if there are competitors ready to pounce.)

What does all this mean for Talk Radio?

As formats go, Talk Radio is long in the tooth.

The formula has worked well beyond any other format’s normal life cycle. But while Talk has proved it’s ability to outlive other formats, a format’s age span is no more elastic than a listener’s age span.

The title of  Part 1 of this discussion, Talk Radio is Dead, Long Live Talk, is a reference to the 15th century phrase The King is Dead, Long Live the King, addressing the ephemeral status of a king. A king is the ruler of his empire, but upon his death, a new king becomes the ruler. Thus the notion of succession, that kings may die, but the throne is forever.

One day Talk Radio 1.0 will run its course, but that does not mean the end of Talk Radio. It will simply herald Talk Radio 2.0.

History and the cyclical nature of formats makes this a certainty. The only question is what form Talk 2.0 will take.

Pundits and self-proclaimed futurists speak confidently of the future as if they have some special gift for seeing the world over the horizon. However, study after study has shown that the only accurate futurists are the ones that admit we can’t predict the future.

CHR was pretty much written off as a tired out-of-fashion format when Saturday Night Fever reignited the format in 1977. Alternative came out of nowhere to reinvigorate a stumbling Rock format twenty years later.

Reborn formats rarely announce themselves before they take off, and rarely take the form that radio assumes. That’s why we suspect that Talk Radio 2.0 is not going to follow the arc that Talk pundits are predicting.

A lot of the punditry predicts that Talk Radio will become less tempestuous, more measured, less extreme. Nicer.

We don’t think so.

Stations will try it. We’ll have more intellectual hosts, more balanced discussions, less verbal bomb throwing.

But it will fail.

We talk with literally thousands of Talk Radio listeners every year, and our research has shown that the next generation of Talk listeners is different than this generation’s, but no less passionate.

They are not looking for a watered-down version of Talk Radio 1.0

We think Talk Radio 2.0 is going to sound considerably different from today’s Talk, but more from a structural standpoint, not an ideological standpoint.

Perhaps when Rush Limbaugh and Sean Hannity decide to retire there will be others capable of filling their shoes, but perhaps not.

In their absence, the format will begin to experiment with shorter faster paced shows, and there will be few three and four hour shows. Talk 2.0 will have more in common with the old radio networks than Talk 1.0.

So is Talk Radio dying? No. Talk 1.0 maybe, but there will be a 2.0. Long live Talk!

Talk Radio is Dead. Long Live Talk.

Have you heard? Talk Radio is dying.

At least that’s what the pundits say. Talk Radio is dying. It’s history!

Of course it has been dying for years according to the critics. Newsweek alluded to its passing in a cover story in 2009.

The fact that Talk Radio is still alive while Newsweek is gone should not go unnoted.

Since then there has been a steady stream of stories questioning the survivability or relevancy of Talk, invariably invoking the name of Talk Radio’s bad-boy poster child Rush Limbaugh.

Remember Sandra Fluke? Rush Limbaugh called the poor Georgetown law student a slut, and all hell broke loose.

The Fluke controversy led to sponsor boycotts, and a condemnation pile-on that included many Talk Radio “experts” and high profile personalities including Don Imus of nappy-headed hos fame. (There’s the pot calling the kettle black.)

Look at the impact of the Fluke remark on Limbaugh's Google search traffic below (click to enlarge). The blue line is Mike “more conservative less controversial” Huckabee’s searches over the same time.

Meanwhile others were taking a wider swipe at radio. The Hollywood Reporter gave a bitter Tom Leykis a platform to vent in a breathless piece called How Radio Will Kill the Radio Star.

Shirley Halperin, who penned the piece tells us that:

Leykis left his first love (broadcast radio) not because he couldn’t get paid, but because he believes traditional radio is dying.....Radio audiences are getting older (more than a third of talk-radio listeners are 65 and up) and the personalities are aging out of relevance.

And if there were any doubt whether Talk Radio was dying, it was put to rest when a major Captain of the Radio Industry, Lew Dickey, confirmed the prognosis.

Even a year after the Fluke incident, Lew Dickey was still talking about the destruction that Rush had done to Talk Radio and his company. And it was newsworthy enough that the Huffington Post picked up a radio trade story quoting Dickey:

Clearly, it's been well documented that the talk side has been challenged....There has been residual hangover on the talk side in terms of advertisers sitting out and not placing there.

Clearly that's had an impact not only on our network business but it's had an impact on some of the news talk stations that we own.

Arbitron added its official imprimatur to the Talk Radio is Dying meme last month noting ominous trends in Talk Radio’s ratings:

News/Talk's lead over Pop CHR and Country has shrunk in each of the past two months, and for the first time since we began keeping our format records, it recorded two consecutive books below a 9 share, finishing at an 8.7 in July.

Now summer is historically the lowest time of the year for News/Talk listening, and we will be keeping a close eye on the results as August and September approach, but it's worth noting that the format's summer shares have declined about 10% since 2011.

So is it true? Are we looking at the end of Talk Radio?

No, to paraphrase Mark Twain, the report of Talk Radio’s imminent death is greatly exaggerated.

All formats go through periods of boom and bust. Every one of them.

Think about Top 40. According to Arbitron, CHR is currently the top rated format in PPM markets, in 25-54 no less! Yet Top 40 has been declared dead more times than Generalissimo Francisco Franco.

CHR might be riding high now, but in the 1980s stations were bailing out of CHR right and left. And many stations that stuck it out denied they were CHRs.

It was a time when every CHR tried to pretend they were really AC and every AC wanted to call itself Mix. Now look at the two formats.

Today Country is doing well, but there have been dark days for that format too. Remember when the Eagles were in power rotation?

Every format experiences different levels of success in repeating life-cycles. Every format goes through periodic transformations, periods of creative destruction.

For the most part, a cycle is roughly every ten to fifteen years, coinciding with generational shifts in tastes.

Few people want to listen to their parent’s radio station.

The CHR format dates back to the 1950s, but today’s CHR is very different from Gordon McLendon’s KLIF, Bill Drake’s KHJ, or Mike Joseph's WCAU.

The KSAN of Tom Donahue was unlike any of today’s Rock stations, but AOR continues to thrive. The same is true of virtually every other mainstream format.

What about Talk Radio?

Modern Talk Radio was born on August 1, 1988. That was the day that Rush Limbaugh debuted on WABC, 25 years ago.

Back then Ronald Reagan was President. Miami Vice and Murphy Brown were hit TV shows. Rick Astley, George Michael, and Richard Marx all had Billboard’s Top 100 hits.

In those 25 years we’ve seen at least one boom and one bust period for every music format. Yet Talk Radio has not really changed that much.

Why? Because Rush Limbaugh is still on the air.

Limbaugh is about all radio has that is still relevent for many people. Were it not for Rush, radio would hardly be mentioned at all in general market news sources, and the few mentions would be the same old radio is dying story. 

The clock has stood still for Talk Radio because the format’s spiritual leader continues to command the biggest megaphone, the most buzz, and the largest audience.

The pattern of radio format transformations suggests that formats evolve because they have to. Even after a format falters, intrenched leaders refuse to adapt.

Leaders make too much money to risk taking a chance.

Talk Radio is too successful, and Limbaugh is too critical for the format’s continued success for stations to try something new.

But what if Limbaugh quits tomorrow? What if he tires of carrying the format and decides bottling tea is more fun?

Talk Radio will have to reinvent itself. It will have to experience (some might say suffer) the same transformation that every other format experiences.

And like every other format before it, Talk Radio will ultimately be stronger because of it.

In part 2 we will explore what Talk Radio 2.0 might look like. Hint: It won't sound like your father's Talk station.

Is News/Talk Radio in Trouble?

How can this be?

How can it be that in the midst of a struggling economy and a critical Presidential election that News and News/Talk stations are losing listeners?

How can it be that a format thought to be the future of local radio, the format that offers the most irreplaceable product has the worst momentum of any major format? 

The latest Harker Research Format Momentum Analysis shows that large numbers of listeners have abandoned News and News/Talk radio over the past year, a trend that continues from last year.

As we explained in last year's analysis:

We determine momentum by looking at the stations that have been in a format for at least a year and see if each station is higher or lower than the previous year. 

If a majority of stations are higher than last year, the format has positive momentum. If the majority of stations are lower, the format has negative momentum.

Only 40% of News and News/Talk stations in PPM markets are ahead of where they were in 2011. The majority of stations have lost share in the past year.

To put that into perspective, the momentum of News and News/Talk is more negative than virtually every music format we track.

Our first level analysis combines News, News/Talk, and NPR stations, but the losses are across the board. When we look at the performance of each format, it doesn't look much better.

More troubling is the fact that these latest declines continue a trend we first noted last Fall.

In our 2011 analysis we found that 62% of News/Talk stations had lost share compared to 2010.Today 58% of News/Talk stations are lower than they were in 2011.

As bad as that looks, News stations are in worse shape than News/Talk stations. Three-quarters are lower than they were last year. (Keep in mind there are few pure News stations.)

Even NPR stations show little momentum. Only 43% are ahead of where they were a year ago.

Median shares also suggest weakness in the formats.

Median share is the "mid-pack" share of the format. Half the stations have a higher share, half a lower share.

Using median rather than average to assess the over-all performance of a format is more useful because it isn’t unduly influenced by stations that do much better than most other stations in the format. (Think of what stations like WTOP or WLW do to an average.)

NPR has a median share of 2.8, essentially unchanged from 2011. In contrast, News/Talk’s median has declined 3.3 to 3.0, a 9% decline. News has declined by a third, but again, there aren’t many all news stations.

The across-the-board declines raise all sorts of questions.

Critics will claim that the declines are a consequence of polarizing conservative talk, but how does one then explain NPR’s lack of gains?

If that were the case, wouldn’t NPR be a natural alternative? Shouldn’t NPR stations move in the opposite direction of conservative talk, not in lock-step?

As the economy struggles, and we move closer to the Presidential election, shouldn't the audience for News and News/Talk be growing, not declining?  

That's what we found in early 2008 going into the last Presidential election in our final diary-based analysis. It showed a format with strong positive momentum.

Well over half of News/Talk radio stations in the top 50 markets were ahead of their 2007 numbers. Of course that analysis was made when radio was measured using diaries.

Could there be something about the way PPM measures radio that’s behind the downward trend?

Consider that the formats with the greatest momentum in 2012 are Urban Contemporary and Urban AC. Urban gainers outnumber losers by nearly a 3:1 margin.

Spanish stations are on a roll, as well.

Share is a zero-sum game. For a format to grow, some other format has to lose. 

What does all this say about the future of News and News/Talk on the radio?

Now that Arbitron restricts the use of non-client ratings, we can no longer conduct thorough Format Momentum Analyses like this. It will become increasingly difficult to track formats and see what's going on.

It could not come at a worse time for News and News/Talk radio stations.

Face It: Shock Sells.

There’s no such thing as bad publicity.

It’s a cliche' that Rush Limbaugh is testing in his defiant response to efforts to get him fired.

(We’re going to skip a review of the controversy, but if you’ve been living under a rock, go to Google News and type in “Limbaugh Fluke slut” to get up to speed.)

We're also not going to gloat and point out that people who have declared broadcast radio dead, writing it off as totally irrelevant, are the same people who are apoplectic that a host broadcasting on this irrelevant medium can generate such passion on both sides.

As new-media centric Ars Technica observed:

It seems appropriate to make an observation that hardly anyone else has. This latest Limbaugh Eruption indicates that broadcast radio still really matters.

The teachable moment for radio is what interests us. Will the concerted effort to get Limbaugh canned succeed? Will this hobble his show, either creatively or financially?

Does this open the door for Mike Huckabee, who Cumulus was already grooming to compete against Limbaugh?

And if the effort to boot Rush fails, and it instead boosts Limbaugh’s status, what does it say to us about the kind of radio that your listeners want to hear?

A great deal has been made about “no Limbaugh” dictates coming from major agencies and businesses. While the latest dictates have fueled the debate, the truth is that every controversial host attracts similar dictates.

Howard Stern had more than his share. Virtually every controversial “shock jock” morning man has had them.

And what about upset listeners, critical tweets, and organized Facebook efforts to get controversial personalities fired?

With all this aggravation, why do stations hire shock jocks and then defend them?

Because shock sells, and it sells at a premium.

Limbaugh says outrageous things that infuriate his detractors. But he also has a loyal devoted audience that keeps coming back.

In many markets Rush delivers two or three times the audience that his competitors deliver.

“Mike Huckabee is the latest in a long line of those who have attempted to compete with Rush,” was Premiere’s response when the Wall Street Journal picked up on Huckabee’s roll-out.

And they’re right. Bill O’Reilly, television’s most watched political talking head, couldn’t. Dennis Miller hasn’t. No one at Talk Radio Network has.

Which is why 99.9% of Limbaugh affiliates have not cut him loose since the Fluke story broke.

Shock sells.

Which brings us back to Mike Huckabee.

More Conversation, Less Confrontation. That’s the pitch, and that’s Mike Huckabee.

Perhaps America is ready for less confrontation. Perhaps America is ready for a guitar playing alternative to Rush Limbaugh.

The WSJ reports that Huckabee will launch with 140 stations. We wish Mike Huckabee and his 140 affiliates good luck.

This is a battle that every radio station with a controversial pain-in-the-butt personality should watch.

And it could produce an outcome with profound implications for the future of Talk radio.

Pandora’s Home-Grown Ratings: Methods & Motives

Pandora claims it has more young listeners than any local broadcast radio station. If 11 million Google hits are any indication, the world seems to believe it.

But is the claim a valid comparison, and is it a trustworthy claim?

The answer is no on both questions. The comparison is meaningless, and worse, the numbers supporting the claim are shaky.

And despite Pandora’s assertion that their efforts are to provide a useful comparison for media buyers, the exercise seems designed to do just the opposite.

Explaining why Pandora created their own ratings, Pandora CRO John Trimble claimed:

Accurately reflecting our audience listenership is critical to our clients....AQH, is the industry standard for buying radio advertising providing buyers with an apples-to-apples metric....AQH comparisons enable advertisers to fully understand the scope and scale of Pandora’s audience. (See here and here.)

But it seems the effort is more for Wall Street than Madison Avenue.

When Pandora first released its AQH numbers inviting comparisons to local broadcast ratings, we pointed out that comparing millions of streams to a single local broadcast signal is meaningless.

An honest apples-to-apples comparison is comparing one corporate audio service to other corporate audio services in the same area.

According to Pandora’s own home-grown ratings, the service has just a fraction of the local audiences of broadcast companies like Clear Channel, Cumulus, Univision, or CBS in any market.

And that is assuming the Pandora numbers are accurate.

The more troubling question is the reliability and comparability of Pandora’s local numbers.

Pandora invites comparisons to Arbitron numbers by using the same terminology, but how comparable are its numbers?

Arbitron weighed in with a carefully worded critique of “recent releases of audience estimates” raising numerous doubts about Pandora’s methods of calculating audience.

Rather than use Triton Digital, Pandora's own ratings provider, and the Media Rating Council (MRC) accredited leader in measuring audio streaming, the service hired a company without ratings experience.

Why didn’t Pandora use the leader in streaming measurement, especially after Triton announced that it would be offering its own local ratings?

On top of that, the company that produced the ratings used a method that is undocumented, and to our knowledge never tested against traditional measurement.

It is not used by Triton nor comScore, the two MRC accredited Internet measurement providers.

The data used to create the ratings came from music logs used by SoundExchange to determine Pandora’s royalty payments.

Perhaps this approach will ultimately prove to be an acceptable method of generating ratings, but what testing has been done? How has it been validated?

Rating providers go through a lengthy and laborious process to gain MRC accreditation. Just ask Arbitron.

The MRC checkmarks tell media buyers that they can trust the numbers media companies provide them.

Cavalierly releasing unaccredited ratings may have created great headlines for Pandora, but with so little known about the reliability and comparability of these ratings, the company has done a disservice to media buyers.

If Pandora is going to get into the home-grown ratings business, it needs to offer greater transparency about the reliability and validity of the numbers it releases.

Otherwise, it ought to leave the ratings business to Triton Digital, comScore, and the other experts.

What About Sports-Talk Radio? How’s That Doing?

Sports-Talk radio along with the rest of Spoken Word has been in the news quite a bit lately.

More and more Sports-Talk stations are migrating from AM to FM with Clear Channel's KJR and Entercom's WEEI just the latest in an accelerating trend.

What impact is FM having on Sports-Talk? So far, in a positive way but less than you might think.

There are a total of 51 AM and FM Sports stations now measured by PPM, eleven more than a year ago. Of those, nearly two-thirds (61%) are still on AM.

The median share for all Sports-Talk stations is 2.1. Half of Sports stations have a share higher than this, while half have a lower share. (This is based on stations in all markets now measured by PPM that have at least a one share in the latest three months.)

This places Sports-Talk dead last of the formats we’ve looked at so far. Click on chart at left.

Perhaps even more interesting is that FM Sports stations are not out-performing their AM brethren by much. Median share for FM Sports stations is 2.2 compared to AM’s 2.1.

New PPM markets coming on-line make it difficult to compare current median shares to last year’s numbers because the newest markets tend to be smaller than the first PPM markets.

To look at median share trends, we calculate median shares for just the stations that have been in the format and measured by PPM for at least a year.

Looking at just these stations, AM shares are steady at 2.2, while the median share for FM stations has gone from 1.8 to 2.3.

That means all of Sport radio’s growth has come from the FM side. This is clear if we look at format momentum.

If you’ve read our other format analyses, you know that we calculate momentum by comparing each station’s share today to what it was last year at this time, using a three month average.

Positive format momentum means that more stations are higher today than they were a year ago.

Momentum for the format is slightly positive at 52.5%, but this over-all performance conceals considerable differences between AM and FM stations in the format.

Fewer than half (46.2%) of AM Sports stations in the format are up over their 2010 numbers. In contrast, nearly two-thirds (64.3%) of FM Sports stations are higher today than comparable months in 2010.

Keep in mind that there were only 14 FM Sports-Talk stations in PPM markets last year, so FM’s positive momentum is based on a limited number of stations.

That said, the modest gains thus far may just be a hint of why lies ahead as more stations make the switch. Stay tuned.