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They can take the radio out of Clear Channel (but that won’t take Clear Channel out of radio)

Friday the 900 lb. gorilla of commercial radio announced that it is changing its name to Clear Channel Media and Entertainment, striking the word “radio” from its name. Even though the company still owns 850 terrestrial broadcast stations–down from its post-1996 height of 1200–Clear Channel is trying to emphasize its belated focus on the internet, seen most clearly with its recently refreshed iHeartRadio platform.

My most cynical response is that the name change represents nothing new; Clear Channel hasn’t really been in the radio business for more than a decade. Rather, the company was in the broadcast real estate business, buying up stations and repackaging them into clusters in order to reduce staffing and other costs. In the short term it was a wildly successful strategy from a profit standpoint, because it’s a ruthlessly simple formula: radically cut costs while keeping revenues mostly static. However, it wasn’t a sustainable approach because it also resulted in diluting the product–the programming itself–which listeners couldn’t help but notice, as they jumped ship to new competing platforms.

At the same time, I think it is true that the company’s shift in strategy really is a turn away from traditional radio, but at radio’s expense. By comparison, National Public Radio has used its internet platforms to compliment and court new listeners to its programming, on the air and online. While programming ostensibly is the product offered up in iHeartRadio, the overwhelming sameness of it all is rather striking. Sure there are dozens of active rock stations to choose from, but the distance between their sound and playlists can be measured in millimeters.

Now it is true that Clear Channel is actually a significant radio content company with its ownership of Premiere Radio Networks, home to such highly lucrative programs as Rush Limbaugh’s and Sean Hannity’s. And while you can listen to these programs by tuning in live broadcast streams from affiliate stations on iHeartRadio, there’s no way to listen at another time. Furthermore, iHeartRadio doesn’t provide a schedule for these stations so you know when to tune it. Sure, you can subscribe to on demand access to Rush or Hannity on their respective websites, but I argue that’s a scattershot approach. First, it limits the audience to the more dedicated, rather than casual listeners. Second, it takes place outside of iHeartRadio, fracturing the platform’s value as a one-stop shop for Clear Channel radio content.

The even more telling aspect of Clear Channel’s move away from radio as we know it is its Total Traffic Network which delivers real-time traffic reports over its stations’ HD channels. Why is this not a radio service? Because one of its primary purposes is to feed traffic data to navigation devices like Garmins and TomToms, not radios. In effect, this is a step towards making stations more valuable for the spectrum they occupy rather than the programming that they can deliver.

This isn’t to say that I believe Clear Channel is abandoning radio. Rather, it’s clear that Clear Channel is continuing to move away from relying on profiting from individual station revenues towards seeing stations as a nationwide commodity where local programming is more of an obligation than a raison d’être. I don’t see the company reinvesting in programming at local stations so much as using them as resources to create new data services and outlets to push national programming brands as consolidated under the iHeartRadio banner. This can be seen no more clearly than in the massive layoffs of on-air talent that Clear Channel imposed last October.

The change from Clear Channel Radio to Clear Channel Media and Entertainment is consolidation 2.0. For the sake of true local service and innovative programming, we could only wish that Clear Channel were actually leaving radio.



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