Canadain Radio Regulations

At McVay Media we have a number of stations throughout Canada that we help. It's a very interesting challenge as Canada clearly has a different culture and approach to radio than the U.S. Right now radio broadcasting is enjoying a solid growth pattern in Canada with revenues growing at record rates. The CRTC (the government regulation agency) is expanding the number of stations in many markets and there is also a bit of a consolidation wave going on in the ownership arena.

One of the regulations that really stands out to many U.S. programmers is the Canadian Content rule. This is a govt. regulation that 35% (in most cases) of the music played from 6a-12m must be of Canadian origin. The idea here is to grow and perserve Canadian artists, writers, producers and musicians.

The results have been very good for those in the Canadian music biz. While U.S. programmers may not realize it a lot of Canadian talent is on your weekly playlist. In Rock bands like Nickleback, Our Lady Peace, Theory of a Deadman, Hinder and many more hail from various Canadian locales. Country and AC also have a pretty strong line up of Canadian content.

While it may seem like a 'wierd' regulation to some it's worked out very well in Canada allowing many artists to build a career and hasn't handicaped the radio stations too much. But, the world is changing. With the advent and growth of streaming signals from anywhere in the globe with no regulations on content, satellite radio with less regulation on Canadian content, the spread of I-Pod/MP3 players and the advent of cell phone and WiFi networks that will stream music just around the corner suddenly the Canadian broadcaster will face increasing drains on their TSL and audience.

Now the CRTC and various artists organizations are lobbying for an increase in Canadian content to 40%. While 5% may not seem like a lot right now and in most formats there is probably enough quality/hit product to support it we also have to look at the long term competitive enviornment here. What would happen if the Canadian audience began to stray (as it already has in the U.S.) off to streams, cell phone stations, Podcasts, I-Pod/MP3, and other music entertainment sources leaving radio behind?

Forcing the stations to nearly 1/2 Canadian content could handicap Canadian radio. What happens when you don't have the room to expose big songs, developing artists and hot -in demand- music that is not from Canada. Your new media competition will not likely have similiar limitations and could end up with a stronger product that pulls the listener and Canadian music consumer away from the broadcast stations. Suddenly the goose (broadcasters) that laid the golden eggs for the musicians can't produce the results.

Both the broadcasters and the musicians in Canada are enjoying a healthy return on both sides of the fence. Will an increase help the musicians and not hurt the broadcasters? Do you want to find out?

Everything and Anything That Rocks

A rather low key evolution is taking place within the rock format of stations that are moving away from the niche strategy that's been in place since the mid 80s. When Classic Rock and Alternative stations first appeared as destinct formats we began to see more sub dividing of the rock cell to Active Rock, Adult Alternative, Classic Hits, Classic Rock that Rocks, and many of the older AOR outlets, that played both library and currents, quickly moved to all Classic Rock before a competitor lobbed off their older listeners.

Over the last year or 18 months we've seen a swing back to stations that cover as many as 4 decades of rock music. Sets can range from a Beatles track to the lastest from the Red Hot Chilli Peppers. Perhaps it's a reaction to all the 'Jack' - We Play Anything stations, but it becoming a viable option. Witness the recent move by KDKB in Phoenix.

We've been working with this approach at WBFX in Grand Rapids and seen the station start to emerge in a race that had 2 stations fighting over the Classic Rock position. There are many different approaches in the era balance and tempo of the stations with so many great testing titles to choose from over a 40 year span. The real target here is a space between the older Classic Rock stations, that are quickly becoming a 42 or even 45 plus landscape, and the Active/Alternative stations that are mainly 18-34 in their appeal. The target here is the 30 something and early 40 somethings that grew up from 1985 to 1998.

The big Classic Rock artists had mostly faded or broke up, but they still grew up on a healthy dose of the music on the rock stations they listened to at the time. They also evolved through the harder rockers of the late 80s, the Grunge movement in the 90s, the Alternative and Active rock growth in the late 90s and early 2000+ era. One look at their I-Pods and you'll see a lot more variety than the 500 songs most Classic Rock or Active Rock outlets feature.

This approach doesn't jump through the roof like some of the more successful Jack style stations. Much of that lies in the Marketing. Jacks come on with a unique name, a full imaging package that stands out, and the successful ones market a lot more than most rock stations. You can't just fill up the studio hard drive with a bunch of tunes anymore and expect everyone to notice. Hopefully we'll see this approach take hold - but it won't happen on the music alone. In today's new media and crowded terestial radio markets you have to do a lot more than just play the right music - that's easy.

Gen Y When Will Radio WAKE UP!!!!!!

Take a look at this article in the USA/Today Business section from 10/11/06:

http://www.usatoday.com/money/advertising/2006-10-11-retail-teens-usat_x.htm

Yet another look at the Echo Generation of the Baby Boomers more commonly known as Generation Y. They are as big or perhaps bigger than the Boomers and they have their whole life ahead of them to spend spend and spend. The big advertisers are all going after them in any way they can dream up.

Too bad radio has it's head buried in the 25-54 sands and won't even try to get this generation interested. Their radio usage is dropping like a stone and every day you see more stations jumping on the 25-54 bandwagon. We could still appeal to this audience - it will take some risks, creativity and investment. Most of all it will take thinking outside the box and also a ratings system that acutally reaches this group in it's sample.

Brand Extending

Most of us have read Trout and Ries' books on Positioning and many of their teachings have become 'law' in broadcast programming. One area they nearly always took a stand on was Extending the Brand. They cited many products in the 60s-80s that took big hits trying to extend their brands - Coke trying New Coke and many others. Their feeling was that the extensions distracted from the core brand and just took sales and resources away.

Well now we live in a different world that has changed the strategy and tactics here. It's a marketing and product development world that is moving away from Mass Production to specialized products that almost seem to be 'made for me.'

Take a look at Tide Detergent, which now has 11 different products for washing clothes and they offer many of these products in 14 different scents. Look at the list of products and scents

Tide Liquid
Tide Powder
Tide Simple Pleasures
Tide with Fabreze
Tide Coldwater
Tide with Downey
Tide with Bleach
Tide with Bleach Alt.
Tide HE
Tide To Go

And the scents
Original, Clean Breeze, Mountain Spring, Free, Spring Renewal, Meadows and Rain, Cirtus and Light, Fresh Scent, Glacier, April Fresh, Ocean Mist, Vanilla and Lavender, Water Lily and Jasmine and Rose and Voilet.

Who knows how many different products you have her? It could be hundreds, a whole isle full of just Tide at the grocery store. Did they not read Trout and Ries? I bet they did, but they also took a look at having Tide niched down by all kinds of competitors from the OXY guy on TV to the other brands like Cheer and decided on a different strategy.

We are facing a similiar dilema with extending our radio station brands to HD, Web casts, cell phone link ups and other new media. Even though Trout and Ries warned countless times in their books that brand extending is bad, the world has changed and the consumer has changed. Just like Tide you can see successful brands like Z100 in New York insuring their leadership in pop radio for the market with HD Channels that extend the brand, Cell Phone delivery, p0dcasts, a web stite that streams and is packed with music entertainment alternatives. They have shown that they will go boldy into the future and extend their brand. Quit trying to hide in a cave here - reach out and extend yourself.

Sports Mania - Hurts :-(

Everyone at ESPN must be putting in 90 hour weeks right now. Fall is sports fan paradise:

• World Series/Playoffs for the next 5-6 weeks
• College Football in the middle of a competitive season.
• Pro Football rounding the first turn and building steam
• NASCAR - Building towards it's Nextel Cup race - a great gimmick to keep NASCAR in the running with all the other events
• Tiger Woods - Ryder Cup - and next year Golf adds a Fed Ex Cup race just like the Nextel/NASCAR trick.
• Hockey - Just starting - bigger news in Canada than the U.S.

If you look at the weekends right now it's wall to wall football and now with baseball in playoffs/series - we'll need 4 TVs just to keep up.

Ever wonder how much this hurts Rock radio stations. So many hours spent on sports by Men 18-49 clearly cuts into the attention span for rock music stations. Fall Ratings are nearly always in a downtrend for Rock radio and all this time spent with Sports is clearly a big reason. Gotta run - Jetter just went 5 for 5 with a HR as the Yankees dust off the team I grew up with - the Tigers.

Radio Attacks/Wars

We've all been involved in a name calling, we are #1 radio war. Changing the promos daily and driving the voice guy crazy fighting over every competitive advantage from 'the most music' to 'music/format purity.' While we seem to enjoy each little victory in the war we often see the audience either care less, or worse actually feel that the attacker is 'just beating up' the other station for no reason.

In recent years these attacks have fallen off. With consolidation why would you attack the guy just down the hall? But, they still go on and sometimes even in the same cluster. Now with the mid-term elections nearing we see attacks from the politicians that make even the most brutal of our radio wars seem so tame.

As we watch I'm sure all of us have had the 'would you guys just cut it out' reaction, much like we have when a bunch of 3rd graders are fighting in a classroom. Yet, when you look at all the research politicans do on their campaigns, all the strategy from teams of very intellegent advisors, and all the dollars they spend why do they end up with these annoying wars?

I bet it's because they STILL WORK. For all the spots we're seeing this season they MUST WORK even better than we all think. Maybe we should be starting some wars again.