This was posted to the Yahoo Chancellor Media Board tonight...

I seriously question whether or not Chancellor has its investors in mind when it sacrifices an established station like top-40 WZJM 92.3 FM/Cleveland for an unproven and risky format like Jammin Oldies.

For those of you who are unfamiliar with this situation, word has it that Chancellor Media flipped the format on top-40 format of 92.3 FM WZJM/Cleveland to a mix of disco and R&B oldies. In fact, as of late, Chancellor has sacrificed some other PROFITABLE stations for this RISKY and UNPROVEN format. Take, for example, WOCL 105.9 FM in Orlando, FL. This was an established, highly rated, well-performing, HIGH BILLING oldies outlet. In fact, it was the market's ONLY oldies station. Somehow, the minds at work in Chancellor decided to can this station's format and head in a "jammin oldies," i.e. disco, direction.

These both were EXTREMELY BAD moves because...

When placed into research, both disco and motown oldies have extremely high "burn" potentials. This means that listeners become infatuated with the music for a short period of time, but then they begin to tune out. So, jammin oldies stations' ratings tend to spike, and then they drop like a bowling ball through thin ice. Some of the first "jammin oldies" stations are starting to witness this trend. An example is WXXY FM 103.1 in Chicago. This station, owned and operated by Big City Radio, but possessing a Chancellor-like jammin oldies format, saw a big increase in ratings after it signed on. In about a year, it saw an incredible decrease in listener time spent listening, followed by a drastic drop in its ratings!

Instead of waiting to see how the first jammin oldies stations performed, Chancellor Media has gone on a massive format changing spree to bring jammin oldies to nearly ever city in which it has a market presence, and it often sacrifices established PROFITABLE stations to do so. This will bite Chancellor and its investors in their butts come one year from now. It's very simple... Many jammin oldies stations will be successful for only a few months, and then they'll wither away into a low-rated, most likely unprofitable abyss. On a personal note, a PD at a top-3 market oldies outlet once told me that when researching, he found disco and motown oldies to have *the highest* burn potential of any single musical genre aimed at the 25-54 year old high spending demographic!

Advertisers, FYI, do not look at short run performance. They look at a combination of ratings periods over a multiple year time horizon. For this reason, only one year of good performance will not be enough to establish the goodwill among advertisers needed to bring in the dollars.

In addition, one must not forget the 10,000-50,000 dollars per station Chancellor is spending just to NAME THE STATIONS! And don't forget the costly big-name personalities being brought to host the stations in major markets, as well as TV promotion, etc, needed to establish the new stations' identities. Is it safe to assume that the fixed and variable costs of establishing a jammin oldies outlet will probably be much higher than those costs associated with keeping successful stations on the air? Is it any wonder that people like Mel Karmazin of CBS avoid format changes whenever possible?

As one can easily see, there are some very large risks in bringing jammin oldies to major markets. And it is even riskier to sacrifice highly performing properties to do so. As a corporation beholden to its investors (like me), Chancellor should work to minimize risk and *maximize* growth. The word "maximize" does not mean canning successful formats for risky ones.

Last week's issue of Billboard Airplay Monitor, a radio industry trade publication, printed the new 1999 power rations, which are a reflection of dollars earned per ratings point in Arbitron rated markets. Generally, power ratios are calculated as follows: one ratings point equals one million dollars. Top-40 radio for instance, scores a power ratio of 1.18, meaning that for every ratings point it claims, it earns 1.18 million dollars. Overall, power ratios have fallen dismally in the past year, meaning radio stations in 1999 are earning fewer dollars per ratings point than they did in 1998. The reason, Airplay Monitor points out, is simple: Companies that own a lot of radio stations, like Chancellor Media, are taking bigger risks with their properties. The latest spree of jammin oldies format changes, like WZJM and WOCL are the acme of this type of risky behavior.