Car advertisements are fueling an uptick in local radio revenues, compensating for shakiness in other categories such as cellular phone service, retail and political advertising, according to a new study.
Auto advertisers account for 13 to 16 percent of local radio revenues, and they have been growing in number, concludes the study by the Southern California Broadcasters Association, which has issued a mostly upbeat prognosis of the radio market.
About 300 auto dealers and dealers groups currently advertise on L.A. radio, up from 180 in 2002, the association reported. Their spending hit $111.4 million in 2004, up 12.9 percent from 2003.
In the first half of this year, General Motors Corp.’s Chevrolet division and Carmax Auto Superstore were the two largest advertisers on L.A. radio to either debut or return after an absence of a year or more.
“What’s driving (the growth) is local advertisers,” said Mary Beth Garber, president of the broadcasters association. “I see the pause is in national advertising, because many of the major national ad agencies are focusing on new media.”
Radio is faring better than much of its local competition, according to TNS Media Intelligence, a research consultancy. During the first half of the year, radio revenues increased 2.3 percent compared with the same period last year, while television fell 3.3 percent and newspapers dropped 7.5 percent. Among the reasons cited is the speed that radio ads can be produced and responded to, as well as competitiveness among car dealers.
Hurban Renewal
When KXOL-FM (96.3) switched earlier this summer from an adult contemporary Spanish-language format to a more youthful and bilingual mix, rival KPWR-FM (105.9) was worried enough to sue to block the change.
It turns out that the concern might have been justified.
KXOL jumped from a 2.0 share in the spring Arbitron ratings its last under the old format to a 2.7 in the summer, its first under the new “Latino 96.3” branding that features a mix of English and Spanish spoken words and dance music. The format, nicknamed “hurban” for Hispanic urban, is increasingly popular in major U.S. cities.
KPWR, which broadcasts in English but targets a largely Latino audience with hip-hop and dance music, dropped in ratings from 4.2 to 4.0 during the same period.
Executives at KXOL did not return calls. KPWR program director Jimmy Steal said much of his rival’s success might be due to the novelty of the new format. “They enjoyed their halo in the first 90 days and now they have the challenge of constantly programming their station with no listener benefit other than the music they play,” Steal said, noting that KXOL remains mostly DJ-free.
When KXOL switched formats in May, the owners of KPWR sued to prevent the change because KXOL was broadcasting from leased facilities owned by KPWR’s parent company, which demanded approval for any format switch. KXOL has since abandoned the leased broadcast tower and moved to a different one.
More Variety
Tribune Media Services, syndication arm of Tribune Co., is starting an entertainment news wire service that will use content from Variety, the trade paper that competes with the Tribune-owned Los Angeles Times in covering Hollywood.
When the entertainment wire launches Sept. 26, it will include stories from the daily and weekly editions of Variety, its Web site and VLife, a lifestyle magazine published by Reed Business Information, the owner of the Variety Group.
“The quality of material generated by Variety on entertainment on any given week would trump that of any other publication or outlet,” said John Twohey, vice president of Tribune Media Services.
Twohey said his comments weren’t a slap at the Times, which he noted is aimed at a more general audience. Times editors did not respond to messages seeking comment.
Urge to Merge?
Could New Times Inc., which left Los Angeles in 2002 with the controversial market-swapping deal that led to the closure of New Times Los Angeles, be the next owner of former rival LA Weekly?
The scenario is being raised amid growing buzz in media circles that Phoenix-based New Times, which owns 11 alternative weekly papers, is eyeing a merger with New York-based Village Voice Media Inc., which publishes LA Weekly.
Last week, the San Francisco Bay Guardian published documents that appear to show a deal is afoot under which New Times would acquire a controlling interest in a new company part-owned by Village Voice. The new company would be the nation’s largest publisher of alternative papers.
It also would mark a return of New Times to Los Angeles, which shuttered its L.A. paper in 2002 in a deal that had Village Voice agreeing to close its Cleveland paper, giving New Times a monopoly in Cleveland and Village Voice a monopoly in Los Angeles. The deal brought allegations of collusion and a lawsuit from L.A. advertisers that remains pending. Two years ago, the two companies reached an anti-trust settlement with the Department of Justice that, among other provisions, required them to allow certain advertisers out of their contracts.
New Times and Village Voice officials have refused to comment on the possibility of a merger. At the LA Weekly, Associate Publisher Jane Kahn has said she has no knowledge of any possible deal.
Holding Pattern
Congratulations, Los Angeles. You’re still No. 2.
L.A. kept its rank as the nation’s second-largest television market in a new report by Nielsen Media Research. L.A.’s 5,536,430 television homes put it squarely between New York and Chicago.
The top nine U.S. television markets did not change in rank in the new Nielsen assessment, although Houston displaced Detroit for 10th place.
The rankings did show that in adding 105,290 TV households between 2005 and 2006 (projected ahead to Jan. 1), L.A. is the nation’s fastest-growing television market in sheer numbers. But don’t expect it to catch up anytime soon with New York, which topped Nielsen’s list with 7,375,530 TV-viewing households.
*Staff reporter James Nash can be reached at (323) 549-5225, ext. 230, or at
[email protected]
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