Ah... 96.3 Jamz... a good part of the soundtrack of my eighth grade year in middle school. I liked the then-Q95 too - in fact I probably listened to Q95 more than anything else - but 96.3 had an edge that no other station, not even WJLB, seemed to have. 96.3 was the station that played the hot new songs first before anyone else. I never liked gangsta rap and would usually switch the station once a gangsta rap song came on, but it was 96.3 Jamz that first exposed me to dance and R&B artists like Ace of Base, TLC, SWV and Toni Braxton. Of course, in my household at least, I always had to listen with headphones, because if my parents heard some of the racier songs on their playlist... there'd be hell to pay. It was the undisputed station of choice for most of my school peers, and I still remember when they did after-school dances at my middle school.
Then as my freshman year began, they changed to Planet 96.3. I listened to the Planet for the same reasons I listened to 96.3 Jamz, to keep up on what was hip at the time and to hear cool, out-of-the-ordinary songs no other station would play. I finally stopped listening when they dropped the '80s new wave "Flashback Lunch" and "Saturday Night Flashback" shows... but that's a story for another time.
As to why they changed, I definitely believe they probably weren't making enough money. WJLB could get away with playing gangsta rap because they were, and always have been, for the African-American community primarily. And like you said, JLB had heritage and had been playing that kind of music for years, and were an institution. While WHYT played many of the same songs, though, many of their DJs were white and their listening audience consisted largely of white suburban kids. Many of Detroit's suburbs are extremely redneck and have been for years (especially since the 1967 riots). I assume there were probably many businesses who didn't want to advertise on a station that was corrupting innocent young suburban minds with "all that ghetto music." And I think the fact that the station's biggest popularity was with the under-25 crowd - younger listeners than advertisers generally like - had something to do with that as well. A few years earlier, a station in Battle Creek (WBXX-FM, B95) went under and changed to Oldies and later AC for similar reasons.
And when 96.3 flipped in the fall of '94, Alternative Rock was the new "hip" thing... the grunge movement was in full swing and bands like Green Day, Pearl Jam, Live, the Cranberries and the Gin Blossoms were crossing over to CHR more and more. For CHR radio in general, it seemed like one of the most musically segregated periods in recent history. CHR seemed to favor alternative rockers, soft rock AC crossovers and a handful of Euro techno-disco tunes while R&B and hip-hop artists got the shaft. Many R&B songs during that time that were top 10 hits on the Billboard Hot 100 struggled to break top 30 or even top 40 on the Radio & Records CHR/Pop chart (today, of course, it's the exact opposite). If you look at what WHTZ-FM (Z100) in NYC was playing around this time, it was very heavily alternative-leaning. ABC may have also felt that 89X, being, one, a Canadian station, and two, in the portion of the FM dial considered (in the USA) non-comm, would be vulnerable and could use some competition.
