Wxnf and Boston Radio Wars

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Case Analysis:
WFNX-101.7 FM and Boston’s Radio Wars

Situation Overview
WFNX was started in 1983 by The Phoenix Media/Communications Group, with the intent to appeal to the newspaper’s same audience of educated, affluent, single professionals and students seeking different opinions from those offered by mainstream media. WFNX was a first mover in the “new wave” or “alternative rock” music genre – they offered something different and had a firm commitment to the local music scene, and quickly became a leader in Boston’s “new music” radio niche. As alternative rock caught on and WFNX’s competitors began to pounce on the station’s previously unique market positioning, their struggles focused around a particular dilemma: How could a station founded upon and recognized for staying outside the mainstream, remain profitable and competitive in an industry driven by cut-throat marketing tactics, constant commercial demands and ever-evolving cultural trends? With industry consolidation forcing major shifts in the industry landscape, WFNX is faced with key strategic decisions to regain ground and stay afloat amidst fierce competition. Through strategic hiring, increased marketing efforts and merger/partnership opportunities, WFNX may be able to turn things around. Radio Industry Background

Radio as an advertising channel provides unique and attractive benefits. As a result, stations in metropolitan areas such as Boston complete to generate profits through advertising sales, gain ratings and market share, reach new listener demographics and implement marketing strategies to expand awareness and popularity among both listener and artist/record label target segments. They also face the challenges of cultural shifts, as genres move in and out of mainstream popularity. WFNX Strengths and Weaknesses in an Emerging Market

WFNX had early success as first movers in an emerging market. They had a clear positioning and connected with their niche audience. Although their ratings were low, they had a loyal audience and good relationships with artists/record labels, enabling them to stay at the forefront of new music. They also had low operating costs that allowed them to be profitable without being large or having high market share – spending less on staffing costs, licensing fees and marketing than their closest competitors, namely WBCN, a ‘classic rock’ station that threatened to infringe on their territory. They also offered lower advertising rates than their competitors, making them attractive to advertisers looking to maximize value of their advertising investment. A primary weakness of WFNX was their limited reach – they had lower signal strength than stations such as WBCN (3,000 watts versus 50,000+), making it difficult for them to expand their audience and market share. Changing Industry Structure and a Mature Market

As alternative rock gained popularity in the mainstream, and competitors such as WBCN moved to gain a foothold in the genre, WFNX faced high threats of new entrants, rivalry and substitutes (Porter’s 5 Forces model), and a shift toward industry consolidation in the late 1990s also brought new challenges and competition for WFNX in a more mature market. For example, competitor WBCN had more reach and leverage and invested heavily in on-air personality and marketing in order to outpace WFNX – eventually moving to an entirely alternative rock format and attaining the coveted spot in Monitor as Boston’s official alt rock station. WFNX struggled to continue to attract bands for their shows, as hot artists flocked to stations with more influence and signal strength such as WBCN, leading to strained relationships with some labels and less access to the new music outlets. Additionally, after losing their program director in 1995 the station suffered from a lack of leadership for several years, leading to high turnover and unclear strategic direction. Poorly received marketing attempts such as the ‘Radio Anarchy’ campaign...
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