800.275.2840 MORE NEWS» insideradio.com

THE MOST TRUSTED NEWS IN RADIO

FRIDAY, APRIL 24, 2015 What’s behind modern rock’s slow, steady growth. Modern rock continues to enjoy steady ratings growth, thanks to a deepening well of young, melodic bands and investments made by broadcasters to strengthen their brands. The format’s ratings share of men 18-49 grew 12% during the past three years while men 25-54 increased by double that amount, Nielsen data shows. Modern rock added an outlet in Phoenix last year and moved back to a full signal in Chicago, while HD Radio-fed translator stations sprouted up from Tampa to Raleigh to Minneapolis. “What we’re seeing is the influence of today’s Millennials on musical trends and musical tastes,” says Jim Fox, OM of Entercom’s Sacramento cluster and program director of modern rock “Radio 94-7” KKDO. The generational shift from Gen X’s “Hey, wait, I’ve got a new complaint” to Gen Y’s “Shut up and dance with me” has jacked up the format’s pop quotient during the past three years and spawned cume-enhancing crossovers. “The core sound is focused, fresh and strong,” says programming strategist Greg Strassell. “Crossovers help expose the genre, making some alternative music true mass-appeal hits and giving it added cume appeal.” The pendulum shift to pop has also heightened sharing with adult alternative. Half of the 10 most played modern rock songs this week are also top 10 at adult alternative, according to Mediabase. But sharing music makes it more challenging for modern rock to have a unique musical position and enjoy the perks of “owning” artists. “It comes down to whether you are willing to fight for those songs in an environment when you could have 5-6 other stations playing them,” Fox says.

With strong music to bank on, programmers focus on other brand elements. Modern rock wouldn’t be in a strong position today without a steady stream of quality music. But there’s more to it than that. Many companies have improved their brands. “Morning show development, and some re-branding and refocusing of station names to rid themselves of rock images that may have held them back, has helped stimulate consistent growth,” programming strategist Greg Strassell says. A strong music cycle is a good time to ensure other brand elements are being developed, he says. “Otherwise that music tide could go out and leave you with only the strength of what is between the music,” Strassell says. “Now is the time alternative should be building great morning shows and other brand features.” Programmers also need to keep their antenna up for the next musical shift. “If the alternative radio community doesn’t recognize when that pendulum of critical mass begins to swing in the other direction, they’ll get let behind,” warns Entercom’s Jim Fox. Today’s emphasis on pop has some programmers wondering what happened to the electric guitar in modern rock. Troy Hanson, head of corporate programming for rock formats at Cumulus Media, chalks it up to some modern rock PDs having closed minds. “You hear them complain about playing too many crossovers and not having artist ownership anymore. But that’s the danger of poo-pooing any type of rock song because it ‘sounds like an active rock song,’” Hanson says. “The audience doesn’t talk like that.” Get ready for new currency metrics for online radio. Nielsen is close to rolling out its digital radio measurement service and it apparently will come with a new set of currency metrics for streaming audio to be bought and sold on. Nielsen EVP of product leadership Megan Clarken told a press conference yesterday the company is having “some very active discussions”

[email protected] | 800.275.2840 PG 1 NEWS insideradio.com FRIDAY, APRIL 24, 2015 about “how to handle new currency metrics” with regard to introducing its form of digital audio measurement to the marketplace. Her comment came in response to a question about the company’s total audience initiative for the TV industry, which seeks to measure the myriad ways Americans are consuming video content, from linear and time-shifted TV to subscription- based streaming video on demand services. The question had to do with how to square traditional TV metrics with those used in the digital advertising world. It’s an issue for radio too, where the currency metrics have long been cume and average quarter hour ratings. But for webcasters using dynamic ad insertion, there may be a new set of metrics more suitable for the way digital advertising is transacted, such as impressions, average minute audience and unique audience. Clarken didn’t say what metrics Nielsen will use for digital audio. “As we get closer to that, clearly we’ll make sure there are the appropriate announcements around that,” she said. “But there are active discussions going on at the moment on both the video and the audio front and we feel really good about them.”

New radio royalty effort comes wrapped in FM phone debate. FM on smartphones is bad for the music industry. That’s the argument two lawmakers are making, saying consumers listening to radio for free takes money out of record labels and artists’ pockets. Reps. Marsha Blackburn (R-TN) and Anna Eshoo (D-CA) are tying the two issues together as they reintroduce legislation that, if passed, would prohibit the FCC from putting an FM chip mandate on cell phone companies. The proposed Protecting the Rights of Musicians Act would also prohibit any broadcaster from collecting TV retransmission consent fees if they also own radio stations that aren’t paying a performance royalty for FM/AM airplay. Longtime advocates of a radio royalty, Blackburn and Eshoo first introduced the legislation during the last session of Congress, attracting no other cosponsors to their bill. With a district that represents the Nashville music community, Blackburn accuses broadcasters of singing a “completely different tune” in fighting radio royalties while demanding TV stations payments. With two bills now in circulation that target a radio performance royalty, Ted Kalo, executive director of the musicFirst Coalition, says lawmakers are “waking up to the broadcasters’ games.” So far, however, a bill introduced last week with much fanfare has failed to add any additional sponsors while royalty opponents have grown their ranks. There are currently 166 members of the House opposing a radio royalty. The National Association of Broadcasters says the latest bill “devalues the indispensable role” of local broadcasters. EVP Dennis Wharton also points out the NAB isn’t seeking an FM mandate, but rather believes carriers should voluntarily activate the chips already in handsets. “For public safety reasons alone, FM chips already in cellphones should be turned on,” he says.

Nashville cues up new twists on radio-label partnerships. A pair of country acts — one a platinum-certified veteran, the other a relative newcomer — are showing what the reciprocal relationship between the radio and recording industries can look like in 2015. Cumulus Media’s partnership with Big Machine Label Group has netted a chart topping country album. “Love Somebody,” the new album from Reba McEntire issued on the Nash Icon imprint, landed at No. 1 on Billboard’s Top Country Albums chart with first week sales of 58,000 units. McEntire was the first act to sign with the joint partnership between the Nashville-based indie label and radio’s second largest radio group. Her new album is getting glowing reviews and lead single “Going Out Like That” has made its way into the top 30 at country radio. Most Mediabase-reporting country stations are playing the track, with Cumulus-owned stations accounting for 55% of its total spins for the seven days ending April 22. Elsewhere in Music City, Warner Music Nashville signed singer/songwriter Chris Janson following his ascent to No. 1 on the iTunes Country Chart after he privately sent his then-independent single “Buy Me A Boat” to Premiere-syndicated morning man Bobby Bones. The next day Bones played

[email protected] | 800.275.2840 PG 2 NEWS insideradio.com FRIDAY, APRIL 24, 2015 it twice on his show, carried on 80 country stations. Now as the latest iHeartRadio “On The Verge Artist,” Janson’s song will receive airplay on 140 country stations for six consecutive weeks, beginning May 4. The program, which selects artists based on the collective input of the company’s programmers, includes on-air exposure as well as digital and social support.

Warm words for broadcasters on weather alerts. One of the arguments broadcasters have used to promote FM chips in smartphones is its reliability during an emergency. It’s that first informer role that won radio and television praise during a Senate Commerce Committee hearing this week in Washington. “I’ve certainly seen the power of local broadcasters when we’ve had the floods in Moorhead and Fargo and when we have tornadoes,” Sen. Amy Klobuchar (D-MN) said. “It’s an unbelievable thing how many lives can be saved.” Senator Bill Nelson (D-FL) credited broadcast meteorologists for saving lives when Hurricane Andrew blew a category five storm into South Florida in 1992. “Their staying on the air and sounding the alarm exactly where the hurricane was going, the devastation would have been so much more in loss of life,” Nelson said. Lawmakers are looking at how severe weather warnings can be better developed and shared with the public as part of an overall review of the National Weather Service’s capabilities. Don Hermey, chief of emergency management in hurricane- prone Manatee County, FL, told the committee that changing media habits requires new ways to reach Millennials without abandoning what’s worked for decades. “We have to figure out better ways to communicate with the different demographics,” he testified. “In Florida I also have an elderly population who still tunes to traditional radio and TV and we have to best figure out how to accommodate all those needs out there.” The information radio personalities largely rely on to alert the public is likely to be fine-tuned in the coming months and years. Committee chair John Thune (R-SD) said he plans to introduce a bill in the coming weeks that will improve the country’s severe weather warning system. AP says the news was good for itself in 2014. For the first time in six years the Associated Press reports its revenue grew in 2014. The news cooperative says total revenue increased 1.4% to $604 million. Radio customers made up 5% of AP’s billings last year. Television made up nearly half of AP’s revenue, with a quarter coming from newspapers. Internet publishers are now larger than radio, accounting for 9% of AP’s total billings in 2014. For a second consecutive year, the 169-year old not-for-profit ended the year without any debt. AP credits several key contract renewals inked during the past year for putting it on more solid financial footing. “Facing financial and competitive pressure, an increasing number of media companies are choosing to have a single agency provide their content,” CEO Gary Pruitt and chair Mary Junck write in an annual report. While news is filling member websites, AP says the demand for video news by broadcasters soared. Broadcasters used more than 1,244 days’ worth of AP video, the executives say. Higher renewals were part of the story as AP’s profit reached its highest level since 2009. The $128.3 million sale of its stake in the sports data company Stats was a bigger factor. Nielsen ends continuous measurement in Monmouth-Ocean market. Nielsen has ended year-round measurement in the Monmouth-Ocean market of New Jersey and will measure the market only in the spring and fall. Nielsen says it did survey market No. 53 for the winter 2015 book. But since there were no subscribers for that survey in the market, it chose not to publicly release the ratings. The two-county market, which covers the coastal area of central New Jersey, is home to stations owned by Press Communications, Townsquare Media and Greater Media. Pandora’s Q1: Active users drop, sales force grows. Pandora’s user base declined 3% during the first three months of the year, as the streaming pureplay reported active listeners totaled 79.2 million. That’s down from 81.5 million at the end of 2014. CEO Brian McAndrews said another 30 million people dabbled during first quarter, but didn’t spend enough time with Pandora to qualify as an active listener. During a conference call with analysts, executives also noted the Q1 tally is still higher than what Pandora had during the third quarter, suggesting some new listeners stuck around. And they noted active listeners spent more time with the service — hitting a record 22.3 hours per month on average. But the user drop-off was larger than investors expected and the company’s stock price fell 5% in after-hours trading. While listener metrics shrank, Pandora’s sales force grew. The company added more than 90 reps in recent months and its sales ranks total about 430. That includes 138 reps focused on local sales across 37 cities. That compares to 194 software engineers on staff. “We’re adding salespeople, not just doubling down in markets that are successful, but also adding specialty vertical experts in those

[email protected] | 800.275.2840 PG 3 NEWS insideradio.com FRIDAY, APRIL 24, 2015 markets,” McAndrews said. Just how big Pandora’s salesforce will become isn’t certain, but he said the typical big radio company has 1,300 to 1,800 reps. “We generally feel like we can cover the major markets and a majority of the opportunity with half, if not fewer salespeople than that,” he said. Pandora’s first quarter advertising revenue rose 27% to $178.7 million. McAndrews noted that 24% of the company’s total revenue now comes from local markets, totaling $43 million. Even so, the company reported a $48 million loss during the quarter. Pandora pushes into programmatic selling. Broadcasters like iHeartMedia are quickly ramping up their programmatic sales efforts, and so too is Pandora. The webcaster disclosed yesterday that it has launched a beta programmatic system that will focus on selling mobile in-app advertising. Pandora says 84% of its listening is done on apps, and that’s where 78% of its revenue comes from. “We anticipate mobile programmatic will be generally available for advertisers early in the third quarter,” CEO Brian McAndrews said during a call with analysts. He said they’ll offer advertisers ways to slice and dice their users through 230 different targeting metrics, as well as open the door to importing any additional data that a marketer wants to use to fine-tune their buy. “That’s where the real opportunity is,” McAndrews said. While advertiser interest in programmatic buying is growing, McAndrews said he doubts it will add up to much revenue in 2015. “We don’t expect major returns in the near-term,” he told investors. Instead, he predicts they’ll get more revenue from focusing on new ad units as they push advertisers to create things like branded stations which have a better return for the company. WKLH trades ‘classic rock’ for ‘hometown rock.’ One of radio’s first classic rock stations is abandoning the handle but keeping the music. Saga’s WKLH has dropped its longtime “Milwaukee’s Classic Rock 96.5” positioning in favor of something less specific and closer to home. The station is now branded as “Milwaukee’s Hometown Rock 96.5.” While the new moniker gives it more musical latitude, it so far hasn’t strayed from Zeppelin, Van Halen and the Stones, even as it continues to integrate more ‘80s titles. WKLH brand manager Bob Bellini says the station’s musical center has been shifting from the mid to late ‘70s into the ‘80s, and the rebranding is a continuation of that. But more importantly, he says the new positioning is about reflecting the city WKLH has been part of since 1986. “Milwaukee has a gritty, determined personality, home to so many iconic brands, and a lot of pride in that history,” Bellini says. “’Hometown Rock’ simply reflects the enthusiasm for our city that we have experienced with our listeners throughout the years.” The name change is also part of a more upbeat on-air presentation. General manager Annmarie Topel says the station is now “brighter, richer, fresher and has more tempo.” The evolution appears to be part of an effort to attract younger listeners. In Nielsen’s March survey, WKLH’s largest audience concentration was men 55-64 years old. Inside Radio News Ticker…FCC announces FM change freeze...It may be springtime, but an expected freeze has come from the FCC. As it sets up for Auction 98, the agency will put a freeze on all FM minor change applications between May 18 and May 28. The freeze covers both commercial and noncommercial stations. It allows potential bidders considering the 131 FMs going to auction to evaluate what they’ll be bidding on when the auction opens July 23…Medved returns to his SRN show…Salem Radio Networks talk host Michael Medved made a quick return to his syndicated program this week, two months after he left the airwaves to undergo treatment for stage three throat cancer. Salem VP of news and talk programming Tom Tradup says his battle has been “inspiring” for coworkers and listeners, adding, “It is a blessing to have him back.” Medved may be off the air occasionally over the coming weeks. Medved has said he’s received more than 4,000 messages of support from listeners since disclosing he had cancer…Nielsen owners selling more stock…On the heels of selling eight million shares, the private equity owners of Nielsen are now selling another 20 million shares. The Blackstone Group, The Carlyle Group and Kohlberg Kravis Roberts will pocket more than $926 million from the sale, based on Nielsen’s current stock price…TV fight impacts radio ad buys…Television broadcasters’ unhappiness with Verizon’s new bare bones cable package on its FiOS TV service is rippling to radio. A Verizon rep tells the New York Times that after Disney objected they decided not to include any Disney-owned stations in the media plan promoting the product called FiOS Custom TV. That includes ESPN Radio. Disney declined to comment…People Moves… WSM, Nashville (650) general manager Randy Bush exits after 15 months at the station. Horizon Broadcasting Group’s Bend, OR general sales manager Kenn Brown has retires and Nancy Wirth will succeed him. Plus several CBS Radio programming announcements. Read all the People Moves at InsideRadio.com.

[email protected] | 800.275.2840 PG 4 CLASSIFIEDS insideradio.com FRIDAY, APRIL 24, 2015

INSIDE RADIO, Copyright 2015. www.insideradio.com. All rights reserved. No part of this publication MORE OPPORTUNITIES may be copied, reproduced, or retransmitted in any form. This publication cannot be distributed @ INSIDERADIO.COM >> beyond the physical address of the named subscriber. Address: P.O. Box 567925, Atlanta, GA 31156. Subscribe to INSIDE RADIO monthly subscription $39.95 recurring payment. For information, visit www.insideradio.com. To advertise, call 1-800-248-4242 x711. Email: [email protected].

[email protected] | 800.275.2840 PG 5