WHAT DO BROADCASTERS SEE IN iHEARTRADIO?

January 25, 2012

Is it extension of their brands? Is it increased advertising revenue?  A new distribution platform?  A number of broadcasters have agreed to have their internet streams added to Clear Channel’s iHeartRadio 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.  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.

For Clear Channel 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).

It appears that this is more a feel good strategy that terrestrial radio is doing something in digital.  As I have noted before, Clear Channel is tiny compared with Pandora’s audience (about 15%).  Based on Triton Digital December 2011 Internet Audio ranker, even if you added all of the top 20 terrestrial stations’ audience including Clear Channel it would still only be 42% of Pandora’s audience .  What’s more, Pandora’s audience is increasing rapidly while the terrestrial stations audience has not increased over time.

6 Responses to “WHAT DO BROADCASTERS SEE IN iHEARTRADIO?”

  1. Paul Goldstein Says:

    Robert, I agree 100%. In the same way that MTV and the Discovery channel built powerful brand extensions (new channels) , it’s critical that broadcasters build breakthrough new & original online stations. Throwing up another “oldies” station won’t cut it. Powerful, compelling, big concepts that are flawlessly executed, preferably with star power is how broadcasters can get back into the game. I see very little of that happening today which is great news for Pandora, Spotify and other new media innovators.


  2. For Ithaca College’s WICB, the benefit is iHeartRadio’s multi-platform functionality. Although the station has an iPhone app and is on iTunes Radio, listeners with Android, Windows & Blackberry devices had difficulty listening to our station. Nothing in our contract indicates that there will be a pre-roll, Most of the stations I listen to on iHeartRadio do not have pre-rolls.

    So, if CC makes money thanks to us, that’s fine. WICB’s potential audience is increased, and that’s why we jumped on the bandwagon.

  3. Mark E. Says:

    Reblogged this on Mark Edwards Rants and commented:
    For radio people (probably) only. Some thoughts from the man who started Ando Media as to why you’d want to give your streaming to Clear Channel. The man makes some very good points. If you’re a radio station thinking about joining I Heart Radio, you should read this first.

  4. Frank Mueller Says:

    I don’t think any non-CC station sees iHeartRadio as their only online solution. However, it is a digital distribution channel into which CC is investing a large amount of effort into marketing. True, it is smaller than Pandora now, but a few years ago Pandora was tiny compared to AOLMusic or Real. Where are those guys now? The clear advantage iHeartRadio has and the reason why it behooves stations to get involved in it is that it has the marketing and staying power of a proven company behind it. That is why my station will be getting on board very soon.
    Additionally, to further address your comment on combining the stations from the Top 20 markets, this is an unfair comparison. Let us compare apples to apples here. So, if you take all of Pandora’s combined national audience and compare it with all of radio’s national combined audience, who is the winner? I think you have 93% compared with about 3 or 4%. And radio’s penetration hasn’t shrunk in over a decade, with the latest numbers showing a growth in the 12-18 crowd. Pandora touts their 1 share AQH in major markets. If I combined all the stations I worked for into a single group in a major market and only got a 1 share from it, I’d be embarrassed, not boasting. True, online streaming is a necessity for radio, but it doesn’t appear to be about to displace radio any more than cassettes, CD’s or MP3 players have before. It is an additional channel of distribution.

  5. Jonathan Adams Says:

    @Frank, I am your target demo, 27 yr old male with money to spend. My iPhone 4s is loaded with Spotify (social playlist activated), NPR Labs, Pandora, ESPN radio, all of my favorite iTunes U programming, witty/satirical podcasts, etc. Please tell me how often you think that I touch that dial in my truck and tune. Please wake up sir, please. Notice I do not use TuneIn radio or iHeart. Same stuff, different channel. They missed the boat. Should be different stuff, different channel. I understand I am a sample of one, but I have friends and our habits for media consumption spread virally. Online may not replace radio, but my niece plays an interactive game on her iPad that includes her favorite characters, teaches her to read, and plays her favorite music while we drive her to school. We are not tuned into Disney radio. Your audience now has the power to replace you. If you do not understand that, then you cannot be helped.

  6. Frank Mueller Says:

    @Jonathan, thanks for the reply. My argument was not that radio stations should not invest in digital distribution. It was that iHeartRadio makes sense because of the strength behind it. It sounds like you haven’t checked out iHeartRadio since they did the revamp, but I have personally found it superior to Pandora because it offers all the same features as Pandora (ability to create my own playlists, etc), has a much broader library of music, and has the ability to listen to traditional stations from across the country. However, I do stand by the argument that radio is not being replaced by Pandora in general because both professional studies and my personal observations (I manage a college radio station) suggest otherwise. Pandora is certainly being used in addition to traditional radio, much like other media have throughout time, but with the students I’ve talked to, who are at the University as a whole and not just in the radio program, there does not appear to be an appreciable decrease in radio listening.


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