Radio just got dropped by Clear Channel Radio: It's now Clear Channel Media and Entertainment.
I suspect the reaction from some will be negative. Some will say Clear Channel doesn't care about radio anymore. Others will say it signals that radio is dead. There will be a thousand opinions about this change, and I do think it is a significant signal.
First, I believe Clear Channel remains deeply committed to radio. Radio currently makes up a majority of the company's revenue, and anyone thinking they don't care any longer is foolish. I had lunch with CEO John Hogan just last week, and I have never seen him more engaged and more excited about the company and all the different initiatives they are touching. He seems truly engaged with the leadership of Bob Pittman and loves that the company is opening new doors in new areas.
This name change signals exactly what can be expected from Bob Pittman, who orchestrated the AOL merger and ran Time Warner -- a global giant with every form of media, including film and music. All my friends have been wondering why Pittman would put his own money into a radio company, with apparently no clear exit strategy to get a return on his investment. As I've said all along, Pittman never goes into an investment without knowing how he is going to get out of it. I think this name change is the first clue.
Clear Channel Radio proved something with the recent iHeartRadio Festival, pulling off what music maven Irving Azoff said was the biggest and best concert he had seen in his lifetime. Clear Channel used the power of radio to drive a lightning bolt of energy into iHeartRadio, which has been on fire since. Why bother? Just look at the market cap of Pandora, and that answers the question. Pandora's current valuation exceeds all publicly traded radio companies combined -- sans profit. If Clear Channel can build iHeartRadio to a similar valuation, it will do incredible things to the financial picture for Clear Channel.
And now, of course, Clear Channel is moving into the massive couponing world to compete against Groupon and Living Social, which have giant valuations and revenues -- but don't have the advantage of a local sales team and 800-plus radio stations to drive success. This leverage of radio, to drive other businesses, is the future of Clear Channel.
I think the Clear Channel we see today will look very different a year from now. Think about the conditions of the marketplace. We still have not resolved the music licensing issue, and people like me have been saying all along that no airplay will kill the music labels -- and radio should use that leverage and launch our own labels. Why not Clear Channel Media and Entertainment? Pittman already had many major artists working for him at Time Warner. He has the leverage of airplay. I think a label is the next logical step. Maybe that too will be a collaboration with Cumulus Media. Radio can drive airplay and sales. Online listening can not only drive it, but drive clickthroughs for a percentage of the sale.
Why not Clear Channel Films? Film companies buy radio to drive attendance. It's logical. Then why not own Web brands, like Huffington or Drudge. Pittman invested in and sold Daily Candy for $200 million. Online brands can be driven by radio and can be used as product placement in films. One media fuels the other.
If you're thinking this name change signals the death of radio, you're wrong. This is the chance radio needs to become an inflection point to drive other media. These are the moves all radio companies should be making in their own unique way. Your job really isn't to create radio and sell ads. Your job is to create loyal audiences and help move product. Change your perspective, and you end up changing how you look at your purpose.
At Radio Ink Forecast in December, WBEB/Philadelphia owner Jerry Lee acknowledged Bob Pittman as the best thing that could happen for radio. I agree. No other leadership in our industry has been able to gel the big media play for radio and to get away from this radio mindset. Though Pittman loves radio, his childhood sweetheart, he knows that we have to get beyond the limits we've placed on ourselves.
Bravo, Clear Channel Media and Entertainment.
Excuse me? I dont pimp expensive art. If youre referring to the fact that our company also produces art magazines. Yes. Im not sure what that has to do with the argument above. Seems like good business to have diversity in this uncertain world.
Im not ashamed of myself nor am I a sell out, which would infer that Im being paid for my comments or that Im sucking up, neither of which are true. If youve followed anything Ive written you can find numerous instances where Ive challenged these companies for many of their previous practices. That has little to do with this specific article which is about them broadening their focus.
Clear Channel is becoming a media company? Not sure why that is a bad thing? Probably smart because they know their growth has to come from areas where growth is occurring, which leverages their assets.
I can appreciate your anger over things not being the same as they used to be. Its not pretty but its reality and pining for the past isnt productive. Seems that some people are so angry, so bitter, so closed minded that they cannot allow any of these companies any slack if they do something right. Perhaps you disagree with the way this company operated in the past, most of that was a previous administration. Maybe a brilliant executive like Pittman with a great track record can put radio on the map again in a way never before done. Only time will tell but to blame him for the last 10 years of Clear Channel, is well, just silly.
Posted by: Eric Rhoads | February 02, 2012 at 03:38 PM
Eric, you're a piece of work. While most of us are attempting to eek out a living of what remains of terrestrial radio, you are busy pimping expensive art. Now you're congratulating the very people who bully, degrade,& devalue local radio. You are a sell out of the first order. You should be ashamed of yourself.
Posted by: D Allen | February 02, 2012 at 03:09 PM
Am I understanding you correctly? You're suggesting radio companies deny music labels airplay to drive them out of business, then sign artists themselves, and turn radio into a 24/7 paid program? Well, maybe such honesty is best for underscoring just how much the radio industry ignores the public interest in their licenses of the public's airwaves and that it goes beyond developing a "loyal audience to help move product." Sad.
Posted by: Sam Klein | January 16, 2012 at 03:37 PM
Eric, the best line in your article: "Your job is to create loyal audiences and help move product. Change your perspective, and you end up changing how you look at your purpose." You are 100% right.
Bob: What's wrong with following the leaders? Why not try and out-Pandora Pandora if you can? Unlike Pandora, our industry has the framework necessary to monetize this type of new medium. Sales teams in place, relationships with agencies and advertisers, relationships with record labels, etc. Clear Channel has the ability to overtake Pandora with iHeart Radio and, more importantly, to make it profitable.
We should be cheering for the leaders in our industry to take these risks as it will keep radio relevant and profitable. If we let outsiders (like Pandora) develop and take a large bite out of our revenue where does that leave us? We should be encouraging diversification and looking for new opportunities or radio will become a shell of its former self.
Posted by: Nick Beyer | January 16, 2012 at 01:55 PM
As for Jerry Lee acknowledgement of "Bob Pittman as the best thing that could happen for radio"
Let's set the record straight: Bob Pittman, Clear Channel, Bain Capital, Thomas Lee and RCS are thieves that has used small companies to deliver some of their trade secrets via 'fake acquisitions' and just using that information as 'their ideas' at the moment
Posted by: Insider | January 13, 2012 at 07:35 PM
Follow the leaders. They should change their name to "me too" media.
Posted by: Bob Bellin | January 13, 2012 at 04:51 PM