1-26-2012
One of Bob Pittman's strategies since coming to Clear Channel has been to bulk up iHeartRadio with as many radio stations as possible, competitors included. Following the iHeartRadio music festival in Las Vegas and Clear Channel's launch of its curated music option to compete with Pandora, Pittman has been cutting deals with his fellow broadcasters. Cumulus' Lew Dickey was the first to come aboard followed by Greater Media and a handful of college and public stations. Is Entercom next? Radio One? Townsquare? And is this the right strategy? After all, we hear it at every industry convention...Radio needs to speak with one voice to increase its share of advertising revenue and compete with increased competition.
Robert Maccini is a managing director at Angel Street Capital. Prior to that, Maccini was a founder and CEO of Ando Media which is a provider of audience information and ad serving in the Internet radio industry. Ando now provides
services to 45 of the top 50 radio broadcasters in the U.S. In 2009 Ando was sold to Triton Digital Media. Maccini wonders what broadcasters see in iHeartRadio. "Is it extension of their brands? Is it increased advertising revenue? A new distribution platform? Even though I believe in added distribution channels, there simply is very little benefit for stations to join and distribute their programming via this platform." Cumulus CEO Lew Dickey apparently see a lot more benefit to iHeartRadio than Maccini. Dickey told Radio Ink back in December that it makes a lot of sense for radio to have one portal, such as iHeartRadio. It also eliminates the need for his company to create one, not to mention the additional benefit Cumulus receives from Clear Channel promoting SweetJack.
Maccini says for Clear Channel, and Clear Channel only, this is a beautiful thing. "They get content for free to add to the offerings on their platform to the consumer and take advantage of the effects of ?the long tail? (No one broadcaster will benefit dramatically but Clear Channel may in the aggregate). Being added just means that you are one of more and more stations/channels on this increasingly fragmented platform. While stations may get to keep their in-stream audio ad revenue I?m sure Clear Channel is keeping all pre-roll and display revenue. Will this platform result in some added ad impressions and therefore revenue? Yes but not enough to buy a cup of coffee. Of the five featured stations today, all were owned by Clear Channel. It appears that this is more a feel good strategy that terrestrial radio is doing something in digital."
