Xfm may have to widen its appeal

For Xfm, which this week won the much-coveted licence to become London’s fourth FM radio station, it is a case of third time lucky. Bids for the licence in 1993 and 1994 both failed, allegedly by just one vote each time.

But now that Xfm has won its five-year battle to get on air, will it be able to attract – and keep – sufficient numbers of listeners and advertisers, or will its indie-music format prove to be just too niche? Indie music refers to guitar bands such as Pulp and Oasis which started out recording for independent labels.

Xfm co-founder and managing director Chris Parry says the station’s target audience is 15- to 24-year-olds. “But I think there will be a rump of 24- to 35-year-olds as well,” he adds.

He says his target of 700,000 regular listeners is sustainable, once listening figures have settled down after a honeymoon launch period.

Leo Burnett head of radio Simon Ward says: “Xfm has already had an awful lot of PR and quite a large proportion of potential listeners will already have read about it in the specialist press. But it also needs to communicate to a wider audience than music buffs and to do this it will have to spend a substantial amount of money on advertising – at least 1m.”

In fact, Parry is planning to throw about 750,000 at the launch. He hints his favoured agency will be Saatchi & Saatchi.

After the launch, which is scheduled for September 1, Parry has promised that a minimum of three-quarters of airtime will be devoted to music which is less than three months old.

With this kind of fare on the menu, it should not be hard to attract traditional youth advertisers. Ward says drinks and clothing companies will be lining up to have their name associated with the station. CIA Medianetwork director David Fletcher says: “It is the kind of station which is appealing to people working in adland.”

The Guardian newspaper and Levi’s already advertised on the station when it was broadcasting on a 28-day licence. Parry says he hopes to attract other youth advertisers such as HMV and the NME.

But some experts think that Xfm will have to attract advertisers appealing to under-45s as well as to the younger end of the market. They say the station will need an eight per cent share of London’s adult listeners as a minimum. Parry’s 700,000 is only a seven per cent share.

Zenith Media’s head of radio Yvonne Scullion agrees that Xfm’s success will depend on whether it can also appeal to the over-30s.

But Mediapolis managing partner for strategy Phil Danter warns that commercialising the station would dilute its appeal and that London already has too many mainstream stations. He says the best strategy would be to offer added value for existing advertisers by diversifying the Xfm brand.

Parry likes the idea of spin-offs. He will not specify whether this will take the brand into club sponsorship or a magazine launch – similar to Kiss FM’s The Lick. But he says something will happen within the first six months of the station’s launch.

Parry also admits that although the intention is to stick to the 75 per cent new music rule, he will be swayed by commercial concerns. This may see Xfm copying Kiss in having a more mainstream breakfast programme with the really esoteric stuff being kept for the evening.

Despite the emphasis on new music, New PHD director Morag Blazey says too much of what Xfm is planning to do has already been done by John Peel’s Evening Session on Radio 1. She says: “The idea of new indie music would probably have been more of an interesting proposition when it first tried to launch five years ago.”

Parry refutes this. “The idea of a new music station would have been interesting in Radio Caroline’s day but new music keeps changing.”

In terms of audience share, Parry does not think Xfm will hit Radio 1, Virgin, Capital and Heart too hard. He believes listeners will be the “dial hoppers” who dip into all the stations according to the particular programme and the DJ.

He thinks Capital will be hit in terms of ad revenue. “We are not going to be predatory – we are not going to take Kiss advertisers. But advertisers will be able to buy a large part of the youth ear if they buy us and Kiss, whereas at the moment they are buying Capital and Kiss.”

Parry says categorically that advertising rates will not undercut other stations. “If anything, we will be selling at a premium.”

But just how the advertising will be sold is not yet clear. One option would be to sell through its shareholder CLT. CLT owns 15 per cent of Xfm and sells the advertising for Talk Radio and Atlantic 252.

One senior airtime buyer says he would not like the idea of Xfm’s airtime being sold by the CLT team: “It will need to have a dedicated sales team which is very focused.”

The general feeling in the industry is that Xfm’s victory is a good opportunity for advertisers, unlike the ill-fated Viva! station. Now they need to know whether Parry will get the balance right between the cool and the extreme.

Factfile, page 30