Karen Slade, the general manager at KJLH-FM (102.3), has seen the Inglewood station's revenue fall dramatically, some months as much as 37 percent. The lighter cash flow has Slade worried that she'll have to lay off some of her 40 employees or cancel shows.
The economy is a factor, but Slade heaps most of the blame on a small electronic device no larger than a pager.
It's the Portable People Meter, and it's radically changing the way radio stations do business in Los Angeles. PPMs, which are carried around by thousands of randomly selected L.A. listeners, record special signals embedded in each radio station's radio waves. That data is then used by Arbitron Inc. to compile monthly radio ratings, which in turn determine station's ad rates.
Before PPMs, Arbitron asked listeners to record what stations they listened to in diaries, a far less precise methodology.
Slade's station has found itself on the losing end of the PPM transition. She readily admits KJLH, owned by musician Stevie Wonder, was never a ratings powerhouse. Under the diary system, the station's share of listeners hovered at around 1.3 percent. But when PPMs came on the market it fell to 0.4 percent. It's a drop that Slade believes doesn't reflect reality.
"We didn't lose 100,000 listeners overnight," she said. "And when you tell me I've lost 70 percent of my market share, you're putting me out of business."
Arbitron has used PPMs to calculate ratings for L.A. radio stations only since October, but the system has already generated static. Executives at minority and niche stations complain PPMs undercount their listeners. And for better or worse, PPMs have changed the ratings of numerous local radio stations.
The financial impact of even a small change in ratings is huge. Under the diary system, a rise or drop of just 0.1 share points translated to a corresponding increase or decrease of $1.2 million in annual revenue, according to the Southern California Broadcasters Association. A similar metric hasn't been calculated for PPMs yet because they've been in Los Angeles for less than a year.
At stations across Los Angeles, executives are scrambling to master the PPM system. Station presidents have hired consultants to help them boost their PPM ratings. Program managers, armed with PPM data that can show the exact minute listeners tune in and tune out, are shuffling DJ and talk show lineups, even suggesting which songs to play and which to avoid.
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