The Divergent Paths of Music Radio & Its Listeners Update

Dave Van Dyke April 6, 2019

Since 2001 Bridge Ratings has been tracking and trending media consumption. Broadcast radio, internet radio, satellite radio, streaming, social media - it all is part of the daily manner in which audio consumers spend valuable entertainment time.

Traditional radio is no longer the only option.

So why are radio programmers missing the boat and not reflecting the tastes of their audiences.

Much has been written in recent years about the strengths of traditional AM/FM radio (its reach of 93% of the population) and its weakness (annual time-spent listening attrition).

“Traditional radio’s music exposure structures no longer align with audience need.”

— Dave Van Dyke, President Bridge Ratings

For many, music radio these days still uses structural exposure playbooks from the 1970s.

What's wrong with that?

Music radio song category structures and exposures no longer align with how the audience consumes music and in our latest findings here at Bridge Ratings, we've discovered that passion for music radio is slipping for 75% of the four major music formats we analyzed: Top 40 (CHR), Country, Urban Contemporary and Alternative.

Reduction in passion for music radio doesn't necessarily mean less passion for the music; on the contrary.

Of the four music radio formats we studied, only Urban Contemporary continues to align its programming to the needs of its listeners.

The Study

Methodology: Bridge Ratings has been tracking radio usage since its founding in 2001. Since 2001 each year we have randomly selected 5 radio stations in the four music formats in three market categories: Major Market (Ranked 1-10), Medium Market (Ranked 11-40) and Small Market (Ranked 41+). This totaled 20 radio stations per music format in each market category. Sample sizes varied by format and by year.

We tracked listening occasions per personal interviews and on-line surveys.

For each member of our sample aged 12 and over, we tracked their preference and passion for each type of music associated with each of the music formats (Passion Index).

The result was a comparison of weekly listening tune-in occasions and the passion.

The following charts summarize our findings:

Top 40

As with all of these format examples, Passion for Pop music on Contemporary Hit Radio/Top 40 remains high over the sixteen year term of this study. What has changed is the number of weekly occasions of listening. Drop-off began as early as 2006 - long before many of the alternative methods of consuming Pop music became available. The divide between the passion and the tune-in is significant for this format yet provides an opportunity.

“The gap between the Passion Index and the Tune-in Listening Occasions represents the growth potential for these formats.”

— Dave Van Dyke

Country

According to our samples, passion for Country music has sustained its high numbers throughout this period having reached its highest point today. And as well-programmed are many of the Country radio stations reflected in this study, the passion for the music and the number of times listeners tune-in each day has slipped and in 2010 began to diverge into a Country music life group that is not as satisfied with Country radio as it could be. The gap between the passion index scores and the tune-in occasion number is the potential the format has for growth.

Alternative Rock

Evidenced in most of these music formats is the growing gap of non-alignment and nowhere is it more evident than in the Alternative Radio segment. Passion for the Alternative music category which can include everything from Alternative, Punk, Indie, Rock and Alternative Pop remains greater than the satisfaction levels delivered by the stations represented in this next chart. Despite the drop-off, the passion for the music is only 14% lower than it was in 2000 while tune-in to these radio stations on average has dipped faster after a high in 2007.

Urban Contemporary

An example of well-aligned radio to its audience is Urban Contemporary as shown in the following chart. Passion for the music and tune-in occasions have followed similar growth trajectories since 2000 and today the format is performing better than ever. Does this have anything to do with the fact that Urban music tends to be the most-consumed whether by stream, download or physical purchase? We believe it does.

Solutions

According to a separate research study of radio program directors conducted late Summer 2016, only 44% of radio programmers used some form of music research. 70% of the group that doesn't use music research depends on published airplay charts to choose and manage their playlists.

The slow disintegration of station tune-in occasions not only aligns with advances in technology but also seems to align with an era when budget for solid station product research began to be cut or reduced and as revenues dried up since 2005, costs were eliminated and research was one of the victims.

“The disconnect between listener expectations and radio’s music programming provides an opportunity.”

Radio today continues to reach over 90% of the U.S. population weekly. And it's no secret that with all the entertainment options available, traditional radio has competition for the short attention span of most listeners.

With the varied audio options available to radio consumers, frankly they've gotten more sophisticated in their tastes, needs and expectations.

Our listener panels and the charts in this report point to one of music radio's key vulnerabilities: listener expectations are not being met.

Even listening behavior of older demographics have significantly adjusted to the influence of new technology.

The disconnect between listener expectations and radio's music programming provides an opportunity.

The radio industry can view this data in hindsight and wonder why time spent listening is dropping. However a return to investment in the product in the form of research, talent and marketing could resolve or at least halt the deterioration in listener commitment to radio stations that play music they are passionate about.

Genergraphics: Supercharging Marketing

Dave Van Dyke May 9, 2018

Radio is Seeing a New Revenue Opportunity

In a series of recent interviews with radio marketing directors, Bridge Ratings Media Research learned that most companies (55%) use demographics (statistical data relating to the population and particular groups within it) when marketing for increasing reach; 25% use psychographics (the study and classification of people according to their attitudes, aspirations, and other psychological criteria) and 20% use some form of Genergraphics (separating the generations and their mindsets for marketing and advertising).

Why is this important?

In today's world of media overload, marketing messages generally do not cut through beyond "awareness" to "engagement" as much as they used to.

With so much clutter, a more focused approach to marketing/sales is needed and we're finding the genergraphic approach to marketing stimulates engagement and consumer recognition. This is because marketing messaging created with generational mindset vs demographic definition is much more effective.

Analyst Jack Myers has released new data suggesting the potential for radio to break out of "the new normal" of the last few years' 0%-2% annual revenue growth.

Jack indicates that the growth of audio advertising will flourish at least through 2020 with "over the air broadcast" to cordon off the "lion's share of total audio spend in 2020". The number is 80% of the $20.8 billion forecast to be spent on audio advertising in 2020 leaving 20% for digital pureplays like Pandora and Spotify.

With this good news is even better news: if radio can perfect its sales approach by properly defining consumers, response to advertising will improve and increased dollars will flow.

Radio's been a fan of audience research for decades, refining it over the years to improve ratings and sales.

Audience insights through demographics brought a sophistication to radio ad buying and further improved with targeted advertising such as content and textual targeting, time targeting, sociodemographic targeting and behavioral targeting.

These tactics have been beneficial to radio, but as media consumption becomes more layered there is one definitive approach that should be given a closer look: Genergraphics - the marketing approach that combines psychographics with the sociological mindset of a specific generation.

The challenge is to shred the old school approach of demographic marketing to embrace a new, more targeted way of selling, programming and advertising.

It's time for a change.

The days of marketing to the wide 25-54 demographic or 50+ needs to be invigorated and Genergraphics is the answer.

Genergraphics® is the brainchild of Phil Goodman who also holds a process patent on Genergraphics Web sites. Phil Goodman and Craig Carapelho have brought together their experience and expertise in order to develop a full array of Genergraphics marketing services including Genergraphics Web sites, advertising and product marketing, market research, and communications consulting services. There's much to be learned here.

Generational marketing is more sophisticated and accurate in reaching consumers than common methods of dissecting a market by demographics or lesser-known psychographic analysis.

A generation is defined by the rise and fall of the birth rates by the Census Bureau.

Genergraphics and psychographics are both derived from sociology, but there is a big difference between the two. Genergraphics goes beyond an individual's personality which is pretty much determined by the age of six. It equates to a person's mindset from their generation which is based on social circumstances of their youthful formative years (12-16 years of age).

Think about this: two people can have similar personalities but be members of different generations.

Generations can buy the same product or service but they purchase for different reasons. The number one reason many ad campaigns don't succeed as much as they should can be traced to the segmentation of consumers by demographics. The commonly-used 25-54-year-old demographic consists of three distinct generations who may like the same products and services but can be motivated to purchase for very different reasons.

Genergraphics market research does all that demographics and psychographics can do, but it goes further by revealing the "why" and "how" a generation does or does not influence another generation in buying decisions.

More importantly, generagraphics will show you how to sell and market to more than one generation at a time without alienating the others that purchase the same product or service.

So, radio, keep this in mind...Genergraphics keeps the research for your clients on track by following different generations through different stages of their lives.

Keep in mind that the social and historical events that occur during a young person's formative years (12-16) will dictate how they think for the rest of their lives.

18-24 year olds in the 80s grew up in a far different world than today's 18-24s. Someone in their formative years in 1985 was born around 1970. The culture they grew up in still guides their consumption and entertainment choices today thirty-three years later.

Marketing should vary by mindset with an understanding that each generation carries its own unique set of circumstances which shape its expectations and way of life.

Traditional media has generally depended on demographics to target its audience for both sales and product research. In this age of media bombardment, marketing messages are challenged to break through. It's time to move to a more focused approach.

Radio has all the tools to take advantage of generational marketing.

New Generational Insights*

Millennials can’t seem to get a break. They are said to be either too lazy or too disruptive. They are either all flocking to the suburbs, or to the city or some other various homogenization. This 80+ million demographic is a mystery to most in marketers precisely because the vast majority of people believe that Millennials act as a monolith, and nothing could be farther from the truth.

In fact, there is a minimum of four sub-demographics that actually range wildly in values and culture Forbes magazine offers this snapshot of three key areas-to-watch, as they intersect with tech, during these next couple quarters as they pertain to various parts of the Millennial demographic:

A. Money, Honey – Watch for an even greater intersection of Millennial behavioral trends and new scenarios around money including cryptocurrency. Crypto is very much a millennial’s game, with 17.21% of millennials claiming to own crypto, versus only 8.75% of Gen X and 2.24% of baby boomers jumping into digital currency, this new area of finance is more of an “Uber” Millennial play at the moment, not all Millennials in total. The “Uber” Millennial is college-educated, more apt to live in a major city, and is a professional/upwardly mobile, among several other traits. This is the disruptor who is more financially stable and who is game for innovation.

B. Diversity - Race and ethnicity, not only pertaining to that steady drumbeat of diversity and inclusion, but also and missteps around this area as well as debate and conversation will grow in volume for certain segments of the Millennial audience. While “Vice” Millennials (think hipsters, anti-mainstream, lovers of vintage) will continue to abstain from this conversation except within their own closely guarded circles, the “Culture” Millennial will see this area as a growing topic of interest but will show support via media properties (i.e. film, music videos) that address the issues rather than direct protest or organization and most of the sentiment will be expressed via Instagram.

C. Brother’s Keeper – The demand for social responsibility and identification of who stands for what will deepen, particularly when it comes to powerful corporations. Much examination will be done out-loud via social media giving few brands time to prepare.

The debate around artificial Intelligence for good (or bad) will grow in volume within this trend segment as well. This will mostly be spearheaded by the “Uber” Millennial, though other sub-demos of Millennials will join in freely depending upon the topic and the target. This trend could and will impact any industry.

Gen-Y? Yes, The Echo Boomers

Gen-Y experienced 72 million births in the U.S.. They're called Echo Boomers because they are (mostly children of the Boomers coming after Generation-X. What key characteristics define this generation? One reason they are so important is because of the generation's size which is critical for a marketer to appreciate.

This generation saw events in their youths that made them cynical about job security based on how their parents lost careers in the 90's.

Tech/Web Savvy:

I’ll send you an email’. Generation Y were born into an emerging world of technology and have grown up surrounded by smart phones, laptops, tablets and other gadgets. As a generation people are constantly plugged into technology and it becomes an essential aspect of the generations life. And they do not respond to traditional marketing methods.

Generation Y prefer to communicate more quickly and effectively via email, social networks or text messaging as opposed to traditional means of communication. The generation are also attracted to organizations where technology is at the forefront of the companies ethos. Traditional companies are less of an attraction for the millennial generation .

Praise-worthy

Echo Boomers need praise. They were always told how special they were when they were growing up and thus believe they are quite special. As a result they are highly confident and expect praise. This is a lesson for human resource managers and business managers: give Echo Boomers the praise they deserve.

Ambitious:

Generation Y are confident and ambitious. Expectations typically need to be managed as Generation Y’s are confident to take on important roles within organizations as soon as they begin. As an organization the difficulty is managing these expectations without stifling creativity and development. Generation Y have high expectations of their employers and expect this to be matched. Many are not afraid to seek employment elsewhere if this ambition is not met. Unlike generations before them they are happy to change job roles more often to find the right organisation to work within.

Team Players:

Teamwork is high on the agenda of Generation Y, but they still expect structure in the workplace.

Global

Because of technology, Gen-Y are the first truly global generation. They are group-oriented, adaptable and excel at processing information quickly. It is important for marketers to speak through the tech and social media methods that this generation is so comfortable with.

Final Thoughts

Regardless of targets, the Genergraphic approach to marketing supercharges the effort and focuses the message. Position your product to reach new age groups by appealing to their core values and needs. Marketing to each generation requires different mindsets and strategies. Communicating with different generations to sell products and services can be tricky yet Genergraphics can solve the puzzle.

Genergraphics can:

• Identify strong market segments within each generation based on differences in actual consumer behavior.

• Determine future demand in a dynamic marketplace as baby boomers mature and generation x'ers and Millennials mature in their prime earning years.

• Reposition your products to meet the needs and expectations of new generations as they transition into your market's target age range.

• Enhance cross-sell opportunities by knowing the entire market basket of goods and services used by different segments within each of the generations.

If there was ever a time to take advantage of this research-based lifestyle approach to marketing, it is today as digital media platforms coupled with traditional media targeting empower business to be effective communicators.

*New Generational Insights were derived from a national Bridge Ratings study fielded between March 1, 2018 through April 30, 2018 with a random sample of 4020 persons ages 6+. Sample error = +/-1.2%. Interviews were done through focus group interviews and on-line questionnaires. The sample consisted of 52% women, 48% men.

Alternative Rock Radio @ DEFCON 3

Dave Van Dyke June 4, 2017

M E M O R A N D U M

TO: Alternative Rock Radio

There seems to be consternation at both the corporate and programming levels of Alternative Rock Radio as to the current state of the format - a radio format that historically has been known for its forward-thinking approach to music.

Many I've spoken to in recent weeks have been concerned about the format's future. While there are exceptions - stations that are super serving the Alternative Rock fans - many programmers and management think the format can achieve greater ratings and revenue.

Based on these conversations, a heightened state of alert is called for: DEFCON 3!

Bridge Ratings provides research data to traditional radio including Alternative Rock stations. Part of the mix of research includes on-demand streaming data which we provide weekly to Alternative Rock programmers.

On-demand streaming data has rapidly grown into a key research tool for media this year and Alternative Rock Radio is a beneficiary of the insight we are gaining through this data. Based on four years of trending data we have seen the format in many cases is misaligned with actual music consumption by its potential audience.

Following is what we have recently learned about the format:

1) The rating system (Nielsen's PPM) that is industry currency for projecting radio audience is flawed when it comes to accurately representing Alternative Rock listeners. P1 listeners - those that contribute the most listening - have a tendency not to participate in Nielsen studies. P2 listeners are more likely to carry a people meter, but don't consume as much radio as primary listeners.

The fact that the core audience for Alternative Rock radio is under-represented by Nielsen is at the core of the format's perceived problems.

2) If under-represented in the ratings, reported listening by core listeners to Alternative Rock radio is shaping an incomplete understanding of the available audience that is spending time with the format.

3) Alternative Rock radio has at least two paths to consider: a) continue programming to the format's core or b) to perform better in Nielsen, reflect the music consumption tastes of those who are likely to be represented in such studies. In order to perform better with People Meter measurement, more individual listeners (e.g. weekly cume audience) are needed.

Secondary or P2 listeners may provide some insight as to the format's ability to attract more audience. More on this in a moment.

4) Our studies reveal that the Alternative radio audience that is likely to be reflected in Nielsen are seeking more familiar songs. This is evident by looking at our weekly on-demand streaming data. This audience uses radio and on-line streaming platforms in a symbiotic way.
When compiling playlists for on-line listening there are two primary ways the Alternative radio life-group builds them. 1) Familiar favorites and 2) Music discovery.

The portion of the Alternative rock life-group that would listen to the radio is very different from those who don't or seldom do listen. So to grow Alternative radio must appeal to this group.

When this life group seeks these types of songs - primarily in the car - familiarity is the main reason, followed closely by discovery.

3) Don't underestimate the power of catalogue material.

67% of songs streamed on-demand by the format's listeners is library-based gold.

“Referencing published airplay charts as a programming tool will produce a playlist not aligned with the audience.”

— Dave Van Dyke, President Bridge Ratings Media Research

4) Don't program current music by consensus.

Programmers who use published charts to stay aligned with the format's fast-moving audience are doomed. Published charts are based on dozens of stations and doesn't take local variances into consideration. Published charts do not reflect today's actual consumption behaviors.

Chart positions on published airplay charts do not correlate highly with actual on-demand streaming data.

This chart places Alternative as the lowest in correlation between actual airplay and on-demand streaming consumption. Only 35% of the songs on published airplay charts correlate by rank with actual consumption measured through on-demand streaming charts. Referencing published airplay charts as a programming tool will produce a playlist not aligned with the audience.

5) Not all markets are the same.

When comparing station airplay with on-demand streaming data, we see significant variances in the most-popular current songs and artists market to market. Some songs by high profile format artists may not be right for power rotations.

6) Mass Appeal is Not a Negative

As Alternative Rock core artists have become more popular through exposure on streaming services and word-of-mouth they have also been adopted by competitive radio formats such as Top 40 and Hot Adult Contemporary. Twenty-One Pilots, Imagine Dragons and X-Ambassadors were formerly exclusive Alternative Rock radio artists have crossed-over to more mainstream listenership.

As songs from artists like these are exposed first on Alternative Rock radio and then on Top 40, the streaming audience evolves and expands. This is a key point for Alternative Rock programmers to understand.

"Heathens" by Twenty One Pilots is a good example of how a song evolves. When launched in April 2016 "Heathens" was exclusively streamed by Alternative Rock core listeners. 75% of streams for that song were from the format's core listeners and 25% were from secondary listeners.

The song reached a more mainstream audience in June 2016 when it was featured in the movie soundtrack for "Suicide Squad". The song gained a wider audience during the band's appearance on Saturday Night Live that fall.

As the song and the band received more exposure, the complexion of the streaming audience changed as depicted in the following chart.

While still consuming the song heavily, over time, fewer Alternative Rock core listeners streamed "Heathens" as much but more Alternative secondary listeners began streaming the song more often as well as listeners to Top 40 radio which by the fall of 2016 was playing the song heavily.

Considering this process of songs evolving through various music consumers is a new key element for radio programmers.

A mass appeal hit by an Alternative Rock artist is good for the format; it can broaden and increase weekly listenership.

6) 25-30% of the top 75 most-streamed songs in most markets are not even on published charts. If stations properly reflected actual music consumption through on-demand streaming data, they would enhance the image of a station that is cutting-edge.

7) Reflect the audience's taste. They are there to lead you - not the other way around.

Bottom line: Alternative Rock Radio serves an audience keenly interested in both music discovery and their favorites. Evidence of this resides in the behavior of these music consumers on social media and streaming services. If the format reflects actual music consumption and ignores programming by consensus, we can return the DEFCON level to 5 (the lowest state of readiness) because it will increase daily listening occasions as well as cume.

To find out more about Bridge Ratings' station-specific on-demand streaming data, contact Dave Van Dyke at 323.696.0967 or at dvd@bridgeratings.com.

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