June 27, 2011
With Pandora now public, all eyes are on that company transitioning from a wildly popular music listening tool to a successful business model that can sustain serious profits for investors for years to come. Much has been written by digital gurus and self-professed Internet experts about whether or not that can happen. Fact is, as time goes by, Pandora may morph several times, finding new ways to generate revenue and profits. At this point in time, as Pandora deals with the high cost of music fees and figures out how to sell more advertising without diluting what listeners love so much, radio's big dog is waiting in the wings with it's own version of music curation.
Clear Channel is working feverishly to integrate Thumbplay into iHeartdaio and the company says a beta version of the revised app will be ready this fall. As the competition wedges into the Pandora space "it might even be harder to find a workable business model for Pandora." Who says that? Clear Channel's Bob Pittman.
The Clear Channel plan is to make the next generation of iHeartradio, with a Pandora-like feature, completely seamless and integrated into the app. It's almost as if Clear Channel is saying we're going to take your entire business model, Pandora, and turn it into a tab on our app. Thank you very much for creating a cool service, but it's really only one piece of the listening experience. It's not "THE" piece.
The question that intrigues us is what happens to Pandora when Clear Channel and its 750 plus radio stations and other marketing platforms begin to promote the new iHeartradio app with listener playlist creation as a "special feature"? Triton Media Group Chief Operating Officer Mike Agovino says "They have extremely large reach and if they promote the feature aggressively I would expect to see a significant jump in downloads and usage of the app. I don't think that their audience gains will necessarily come from Pandora. More likely this move just helps to grow the already growing online audio pie."
Everyone agrees that it's too early to declare winners and losers in the Internet listening game. Tunein.com CEO Bill Moore says "Online listening is still under 10% of all radio. It?s a massive market, we are on the second batter in the first inning."
ABC's Steve Jones says ?It?s way too early to predict winners and losers in digital radio. One of the most important events was the Pandora IPO. It will be telling to see how the market values that company and, by implication, the other pure-play digital radio companies. (Pandora will begin trading today at $15.37). When you talk to some of these private pure-plays, they?re apprehensive. Pandora?s success could lift all boats. But, if the market is not supportive, broader vulnerabilities for online audio (such as royalties) could be exacerbated. Still, these are early times and It?s still very much a jump ball for everyone in this space.? ABC provides exclusive content for Slacker Radio.
In the recent past Clear Channel's Bob Pittman has called Pandora a "playlist on shuffle." Of course time will tell whether that characterization is correct or whether Pandora proves Pittman wrong. An example he's referenced is his experience with AOL's instant messenger, saying it was a successful product but they could never figure out a way to make it a business.
Slacker Radio CEO Jim Cady. "We would agree that Pandora is primarily a playlist generator, where you put in a song or artist and their algorithms produce a playlist that matches that criteria. Our programming approach, radio practices, content offering and general philosophy is built very closely to that of broadcast radio and we believe that is a considerable benefit over the playlists that Pandora and others lean on for discovery. It is very difficult to beat a well programmed radio station. Especially one that you, as a listener, can control - this is something we have built our entire service around. We are very happy to employ some of the best radio programming talent to curate our stations and craft our experience, because radio is an art that does not translate to playlists."
Agovino says Clear Channel has another opportunity, perhaps the next generation of apps for the listener, "If I understand CC's execution correctly it sounds like this technology that comes from Thumbplay is not integrated with the their terrestrial brands. In other words, it's not a personalized Z100 or Kiss 108. If that's true, than I think they've missed the opportunity to take the value proposition to another level. I think a best of both worlds hybrid is the killer app."
For now, Pandora is the success story. They are the one making all the waves and everyone else is just sitting back watching how they do and what they do.
(6/27/2011 9:18:49 AM)
Clear Channel's willingness to take risks has kept the company on the cutting edge of change. It is "clear" that Bob Pittman is carrying on that tradition with the new iHeartradio App. as an answer to Pandora.
Of course, Clear Channel has the best possible promotional platform and the ability through its crowdsourcing efforts to discover and establish new artists both on air, on Web platforms and on other wireless applications.
No one can afford to be "risk averse" when dealing with the “sea changes” taking place in media. Clear Channel management and ownership are clearly placing a premium on vision.
(6/27/2011 5:29:04 AM)But, I thought that radio is supposed to stop streaming, and put everything into the HD Radio basket. LOL!
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