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WFNX and Boston Radio Wars

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  • Pages: 8
  • Word count: 1761
  • Category: Music War

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WFNX was started in 1983 by The Phoenix Media/Communications Group, with the intent to appeal to the newspaper’s same audience of educated, affluent, single professionals and students seeking different opinions from those offered by mainstream media. WFNX was a first mover in the “new wave” or “alternative rock” music genre – they offered something different and had a firm commitment to the local music scene, and quickly became a leader in Boston’s “new music” radio niche. As alternative rock caught on and WFNX’s competitors began to pounce on the station’s previously unique market positioning, their struggles focused around a particular dilemma: How could a station founded upon and recognized for staying outside the mainstream, remain profitable and competitive in an industry driven by cut-throat marketing tactics, constant commercial demands and ever-evolving cultural trends? With industry consolidation forcing major shifts in the industry landscape, WFNX is faced with key strategic decisions to regain ground and stay afloat amidst fierce competition. Through strategic hiring, increased marketing efforts and merger/partnership opportunities, WFNX may be able to turn things around. Radio Industry Background

Radio as an advertising channel provides unique and attractive benefits. As a result, stations in metropolitan areas such as Boston complete to generate profits through advertising sales, gain ratings and market share, reach new listener demographics and implement marketing strategies to expand awareness and popularity among both listener and artist/record label target segments. They also face the challenges of cultural shifts, as genres move in and out of mainstream popularity. WFNX Strengths and Weaknesses in an Emerging Market

WFNX had early success as first movers in an emerging market. They had a clear positioning and connected with their niche audience. Although their ratings were low, they had a loyal audience and good relationships with artists/record labels, enabling them to stay at the forefront of new music. They also had low operating costs that allowed them to be profitable without being large or having high market share – spending less on staffing costs, licensing fees and marketing than their closest competitors, namely WBCN, a ‘classic rock’ station that threatened to infringe on their territory. They also offered lower advertising rates than their competitors, making them attractive to advertisers looking to maximize value of their advertising investment. A primary weakness of WFNX was their limited reach – they had lower signal strength than stations such as WBCN (3,000 watts versus 50,000+), making it difficult for them to expand their audience and market share. Changing Industry Structure and a Mature Market

As alternative rock gained popularity in the mainstream, and competitors such as WBCN moved to gain a foothold in the genre, WFNX faced high threats of new entrants, rivalry and substitutes (Porter’s 5 Forces model), and a shift toward industry consolidation in the late 1990s also brought new challenges and competition for WFNX in a more mature market. For example, competitor WBCN had more reach and leverage and invested heavily in on-air personality and marketing in order to outpace WFNX – eventually moving to an entirely alternative rock format and attaining the coveted spot in Monitor as Boston’s official alt rock station. WFNX struggled to continue to attract bands for their shows, as hot artists flocked to stations with more influence and signal strength such as WBCN, leading to strained relationships with some labels and less access to the new music outlets. Additionally, after losing their program director in 1995 the station suffered from a lack of leadership for several years, leading to high turnover and unclear strategic direction. Poorly received marketing attempts such as the ‘Radio Anarchy’ campaign increased drift amongst their already dwindling audience and led to a steady drop in ratings and profits. Strategic Options and Recommendations

WFNX needed a shift in strategy to quickly generate revenue and neutralize threats. They began changing their program format to include more top hits and popular music, but risked losing their positioning and abandoning their core values by doing so, which could lead to further drops in ratings for those listeners who value their strong anti-mainstream positioning. They retained good recall and recognition in the market, but had lost popularity to competitors. The station identified several strategies that leveraged opportunities to help them regain competitiveness and grow its market share. While all strategic options suggested could be successful, a key next step for the station is to prioritize their initiatives and develop a timeline for implementation. The station should focus first on those strategies that will immediately generate revenue to help sustain them in the short-run. Hiring is one area that should be a priority initiative – hiring and training a competent sales staff to bring in new revenue, finding on-air personality that can compete with WBCN’s popular Howard Stern show, as well as expanding their categories of advertising to produce new revenue streams.

In order to position the station for long-term success and sustainability though, WFNX should put emphasis on initiating strategic partnerships. A recent shift leading to a bigger market area (including Worcester, MA and parts of New Hampshire) provides an opportunity for a marketing partnership or acquisition, which would increase reach and broadcast power. Similarly, they should put priority on leveraging parent company The Phoenix to maximize the impact of their marketing strategy and gain synergies between the newspaper and radio. These strategies seem vital if WFNX hopes to take back market share and create sustainable presence in the long-term. Lastly, it would be wise for the station to invest in market research and to continue to differentiate themselves through strong positioning and reinforced values, but these initiatives may be better suited for future implementation, since the station’s positioning and connection with/loyalty from their existing audience has historically been one of the station’s strengths. (See optional Appendix A with full SWOT Analysis for support)

Appendix A: WFNX SWOT Analysis

STRENGTHS• Clear positioning in the market – When asked, the station was easily recalled and recognized for their alternative music genre, despite lower ratings than competitors.• Original “founder” of alternative music – Widely recognized as the leader in their space, awarded “Alternative Station of the Year” by several trade magazines, and accredited by music industry critics. Known for being closest to the “street”, WFNX claimed to be a niche-marketed station that did not desire to have the mass popularity and resulting market share of more mainstream stations like WBCN. • Low operating costs – The biggest costs for a typical radio station included staffing costs, licensing fees and marketing investment. WFNX spent significantly less on staffing and marketing than many of their competitors, enabling them to be profitable early on without being large or having high market share (WBCN charged 2x more on personality and staffing costs).• Attractive (low) advertising rates – WFNX’s biggest competitor, WBCN charged 3-6 times more for prime time advertising spots.| WEAKNESSES• Low market share and inconsistent ratings – WFNX historically had low ratings, attributed largely to small signal (3,000 watts versus 50,000 watts of competitors), but made some improvements – other possible explanations were lack of marketing or content that was too “weird” for the general population’s taste.

• Lack of popularity and leverage – WBCN caused waves for WFNX when they registered with Monitor as an alternative station, bumping WFNX from the listed alternative station in Boston. As more stations switched formats, became harder for them to attract bands for their shows, as the hottest bands flocked to stations like WBCN with more powerful influence and signal. Also led to strained relationships between WFNX and some labels, because the station refused to play bands that they deemed not truly “alternative” or as revenge for being left off concert bookings.• Poor leadership and high turnover – In 1995, WFNX program director left and station was unsuccessful in replacing him. Also lost some of their DJs, and in 1996 launched the “Radio Anarchy” campaign to raise awareness and distinguish WFNX from other stations amidst their drifting audience. Unfortunately, got negative feedback and eventually puttered out slowly. Third PD in three years resigned shortly after the campaign was shut down.

Lacked direction, steady drop in ratings, staff turnover increasing (100% sales staff turnover in 1996 and 75% in 1997) – remaining staff worried were losing everything good about the station.| OPPORTUNITIES• Bigger geographic market – (including Worcester, Mass and New Hampshire) means increased reach through more wattage/broadcast power or strategic merger/partnership with other stations – ideally in Worcester.• Invest in translators for increased reach• Reinforce positioning – Continue to differentiate through positioning to retain loyal listeners and draw new audiences who are tired of the fake “alternative” stations• Market research – Competitors currently investing in more market research to stay in touch with listeners and understand what they want to hear.• Leverage parent company reach and influence – The Phoenix Media/Communications Group reaches more people overall than any of the national radio groups in Boston. See synergies between companies and capitalize on strengths.|

THREATS • Industry consolidation/Changing landscape – Industry consolidation started taking place in 1997, which posed significant threat to independent stations like WFNX because large stations were able to offer discounted advertising rates for all their stations, causing advertisers to overlook market opportunities and benefits from other stations. • Straying from core values – WFNX started playing more hits and less new music, but insisted they were not straying from their core values. By changing their music to appease ratings/market share, WFNX risked acting in direct conflict with their core values and market positioning – by focusing on commercial success they risk alienating their audience who widely resisted all things mainstream and commercial.

• Threat of new entrants and rivals – As the alternative sound grew more popular, WFNX faced threats from various competitor stations looking to cross over. WBCN started introducing more “alternative” music into its format shortly after the Green Day concert incident. They admitted that album-oriented rock was dead, and were ready to get on board the new wave trend. Several years later, WBCN along with stations like WAAF and WCGY – all traditional rock stations – appeared to consider switching to an entirely alternative format, but for the most part found it not economically viable or stable. In the end, it was WBCN who made the switch, after parent company Infinity purchased a classic rock station that would appease their existing audience demographics, and allow them to broaden and gain more traction with the younger, more “hip” audience. • Loss of advertising revenue – Threat of regulations on alcohol advertising

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