Wayward country music fans who are trying to return to the fold should
be advised not to set their clock radios to 103.5 FM for a soothing
wake-up call. Today such listeners in the New York area would hear:
"Good morning sleepyheads! It's 6:05 in the morning on 103-5, the new
KTU. I love you! I'm RuPaul, the beef jerky of Jersey, the sushi of
It isn't that RuPaul, the drag queen and singer, has gone country;
it's just that the station has changed its format and its fortunes. And as
WKTU proves that disco is alive and screaming in the Big Apple,
radio-industry watchers on Wall Street are taking notice.
Last February, 103.5 FM changed its call letters and its format, and
soon after, its ranking and its bottom line. After transforming from WYNY
(home of country music, ranking 21st in the market) to WKTU ("the beat of
New York," the ads say), the station became No. 1 in New York, according
to the spring ratings of the Arbitron Company. The new call letters once
belonged to a New York disco station popular in the late 1970's and early
Of course, the success of the new WKTU does not represent the first
time that a radio station has moved up quickly in the ratings. Some
stations have skyrocketed in the ratings and have crashed just as fast, so
rivals and the market will be watching WKTU's staying power.
But the turnaround has helped the station's owner, the Evergreen Media
Corporation of Irving, Tex., strengthen its role as a major player in
big-league broadcasting, where it now owns 37 stations. Evergreen, which
acquired WYNY in May 1995 as part of its purchase of Broadcasting Partners
Inc., has an aggressive strategy: it wants to dominate the top 10 radio
markets in the country.
Evergreen's stock closed on Friday at $46.75 on Nasdaq, down slightly
from its recent high of $49 in intraday trading set on Thursday. Two
months before the purchase of Broadcasting Partners, the stock traded as
low as $14.
On Wall Street, ratings numbers like WKTU's do not go unnoticed. "It is
nearly unprecedented to see a station double its ratings in its first
WKTU did, said William Meyers, media analyst at Smith Barney, who has an
"outperform" rating on Evergreen's stock.
For 1996, Mr. Meyers expects WKTU to provide about $6 million in
broadcast cash flow -- station operating income excluding depreciation,
amortization, and corporate, general and administrative expenses. That
would be double the $3 million that he estimates that the station provided
last year. His estimate for 1997 is more than $8 million.
He estimates that Evergreen's broadcast cash flow, taking into account
all pending transactions, will be $118 million this year and $132 million
in 1997. Although comparisons with 1995 are inexact, because the number
of stations has grown, Mr. Meyers said this figure increased by more than
10 percent a year for its existing stations in each of the last two years.
Analysts at Morgan Stanley, UBS Securities, Oppenheimer, and Alex.
Brown & Sons, too, have given Evergreen "buy" and "strong buy" ratings.
Already, WKTU ad rates, at $1,300 for a prime 30-second spot, are more
than three times the old price of $400 at WYNY. WKTU will have a stronger
effect on Evergreen's bottom line in the next quarter, when ad revenues
are based on the spring Arbitron numbers.
Disco music, however, is not the only ingredient in WKTU's success.
Like other top-ranked stations, it conducts much market research, offers
constant promotions and hires larger-than-life personalities. And few are
larger than RuPaul who is 6 feet 4 inches tall in flat sandals. (He does
not wear his wig and heels to work.)
RuPaul is part of a wild, at-times ribald, morning show, filled with
the latest beats, dance oldies, parodies, entertainment news and celebrity
interviews. The morning team also includes the singer Michelle Visage, and
the veteran disc jockeys Freddie Colon, who used to work at the old WKTU,
and Joey B.
The show, however, has not been able to climb to the top spot among
morning listeners. The drive time is dominated by Howard Stern's
syndicated talk show on WXRK-FM, Don Imus's show on WFAN-AM and the
all-news stations WINS-AM and WCBS-AM. The Westinghouse Electric
Corporation is about to control all of that competition; it already owns
WINS and WCBS and is completing the purchase of Infinity Broadcasting,
which owns WXRK and WFAN.
WKTU plays top-40 songs, from artists like the Fugees, as well as hits
from days when New York was the disco capital of the world, from artists
like Donna Summer and Gloria Gaynor.
The station's transformation is one of the most prominent examples of
the constant format changes among stations across the country as they
search for the right formula to attract more listeners and advertisers.
"Format changes are a direct result of ownership's disappointment with
financial performance," said Gary Stevens, a radio station broker.
At least 500 stations have changed formats just this year, and one
estimate puts the average life span of a format at five years.
In the last several months in New York, for example, WAXQ-FM, 104.3,
has changed from hard rock to classic rock, having been, until December
1993, a classical music station; WPAT-FM, 93.1, has changed from adult
contemporary to a Spanish format, and WXRK-FM, 92.3, has moved from
classic rock to modern rock.
Although WKTU's predecessor, WYNY, was ranked No. 21 in New York, it
had the most listeners of any country music station in the United States,
thanks to the size of the New York market.
Robert Unmacht, editor of the M Street Journal, a weekly radio trade
publication based in Nashville, said, "The New York market is so vast and
competitive, you can do something incredibly badly and still have a lot of
Jettisoning country for disco at WKTU made good business sense to Scott
Ginsburg, the chairman and chief executive of Evergreen.
"After a series of financial calculations, we knew we needed an
alternative to the format we had in New York," said Mr. Ginsburg, 43 , who
has worked in radio since high school. "To use a full-strength New York
signal on a 21st-rated station was a waste. There certainly was a hole in
the market for dance music and we decided to fill it."
When the public is getting what it wants, advertisers notice. WKTU
ranks first in total audience and in three key demographic groups,
including one of the most desirable: adults aged 18 to 34.
Richard Cotter, senior partner at the J. Walter Thompson advertising
agency, a unit of the WPP Group, places ads on WKTU for clients like
Eastman Kodak; the Oscar Meyer unit of Phillip Morris, and 20th Century
Fox, a unit of the News Corporation.
"They have obviously tapped into something big," he said. "They have
mass appeal, but do very well with both the young 12-24 crowd and the
older 25-54 listeners."
Evergreen's journey into New York also reflects one of the most
important trends in radio: consolidation of station ownership. Because of
deregulation and the Telecommunications Act of 1996, companies can now own
up to eight stations in each of the largest markets.
"They are creating market clusters of several stations within a city
and trying to lock up spectrum," said Mr. Stevens, the station broker.
"In a good year, I do six or seven deals," he said. "This year I have
already done 20," in cities like Los Angeles, San Diego, Phoenix, Seattle,
Dallas and Miami.
Among those closely watching WKTU's transformation is Kurt Johnson,
program director of both WLTW-FM, 106.7, an adult contemporary station
that is ranked No. 3 in the market, and WAXQ-FM, 104.3, a station that
switched last month from hard rock to classic rock. "Programming is
essentially the same in any format," he said. "You have to find a format
that the market needs and assemble the right mix of personalities and
marketing to make it work."
All the fluctuations prove that "just because a station is No. 1 today,
does not mean it will be No. 1 tomorrow," Mr. Johnson said.
"Right now, WKTU is in a honeymoon phase where it can't do anything
wrong, pushing hot buttons that remind people of songs they know from
their past," he said. "But people can grow tired of a new thing."