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iHeartRadio Soon to Have it All

It seems quite appropriate that my final blog posting on the radio industry would involve Clear Channel, since I’ve practically been their cheerleader this entire semester, but this is a great one to end it out, because FMQB reported that it was announced today that iHeartRadio is soon going to offer all of the radio stations under Cumulus Media, Inc.

This is an amazing development, because Cumulus is the number two terrestrial radio provider in the country. I blogged in September about the Cumulus and Citadel merger, which took Cumulus to the number two spot with nearly 600 radio stations in 120 markets. To broadcast all of their stations over iHeartRadio means that Clear Channel’s application will now boast nearly every single major radio station in the country, something around 1400 stations. If that is not dominance, I don’t know what is.

A big win for Cumulus is that part of the deal also includes advertisements on iHeart for another of Cumulus’ projects, SweetJack, which is sort of Grouponish, but not nearly as pretty. The daily deals from SweetJack not only now will be advertised on every Cumulus station, but every Clear Channel station as well. That’s a huge amount of exposure.

If mergers are what the radio business is all about, this seems like a way for two radio behemoths to soft merge and reap the benefits without having to bother with the administrative/bureaucratic hullaballoo that a real merger would have. It would seem that having Bob Pittman at the helm is taking Clear Channel aggressively into the future. It will be interesting to see over the next couple of years how this direction actually pans out.  

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That's a Whole Lotta Cars

Radio and Television Business Report posted an article today which noted that David Frear, Sirius XM’s CFO, announced a projection of 100 million more cars around the country being equipped with satellite-capable receivers by the end of this decade.

 Currently, there are an estimated 235 million cars with satellite receivers. The forecast growth for 2012 ranges from 13.1 million to 14.3 million more cars, but this number could be hampered if the economy continues to decline. Of the cars currently on the road, only 46 percent of those usually extend their Sirius XM subscription past the initial free phase which comes with purchase of the vehicle. They see a greater subscription rate from luxury car buyers than lesser models, roughly 70 percent vs 30 percent.

It could definitely prove very unfortunate for Sirius XM that they put so much stock in the automobile industry. Even if people do keep buying a lot of cars through the next few years, they may not want the extra burden of paying for the radio in their car too. I think to help combat this we will definitely see the company develop ways to enhance their mobile smartphone application and similar technology.

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Pandora and Clear Channel Leading the Pack

FMQB reported that Triton Digital released its Internet rankings for October, and Pandora and Clear Channel both increased in traffic from the month before. The session starts for Pandora are significantly higher for Pandora, 343 million to 61.9 million for Clear Channel, but this is still a decent climb for Clear Channel, which overtook CBS as the second most popular streaming site.

The top ten on the domestic ranker are:

Pandora

Clear Channel

CBS

Cumulus

Slacker

Entercom

ESPN

Digitally Imported

Cox

EMF

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Will We Ever Be Able to Escape Political Ads?

Pandora announced in a press release last week that they will be airing targeted political advertisements throughout this coming election cycle. With candidates gearing up to spend record breaking amounts of money on ads this next year, this could mean some big-time revenue for Pandora if it gets it right.

The company will be relying on the zip codes registered by members, but also can take into account age, gender, time of day, music genre most listened to, and other variables. The company is also touting that they will be able to deliver rich media to end users, such as video ads. This, coupled with the fact that their reach is perhaps bigger than terrestrial radio stations due to limitation of signals, might mean that they are able to significantly subtract from money that has traditionally gone to those terrestrial radio stations.

I think the difficult thing here is measuring effectiveness, but this has always been a problem with advertising on the radio. Because Pandora has many ways to track the metrics of its customers, though, they just might be able to draw conclusions at the end of the election season as to the power of their targeted ads better than terrestrial radio stations ever have been able to do.

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Liberty Media Soon to Own More of Sirius XM?

The New York Post reported today that John Malone of Liberty Media may up Liberty’s 40 percent stake in Sirius XM. Liberty saved Sirius XM from bankruptcy in 2009 by investing in the company. The post noted that if this does occur, Liberty will gain controlling interest of the company, but only to 49.9 percent.

If this happens, the timing would likely come after March of next year, because Liberty will not be subjected to tax penalties. The article does not speculate what this could mean for the future of Sirius XM, but Liberty also has its hands in Live Nation, so it gives pause to wonder if maybe there is interest in adding to satellite radio a sort of pay-per-hear service where people can access live concerts through their satellite receivers. Regardless of that scenario, though, if Liberty is at the helm, there surely will be some sort of change at the company to benefit Liberty’s other business interests, as well as Sirius XM itself.

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Coming Soon to Everywhere Near You

Pandora sent out a news release November 10 that indicated their application will be standard on Toyota’s newest car, the Prius v. This is the third Toyota that will boast Pandora via the touchscreen Entune program in the car’s dashboard. Users must have a smartphone equipped with Pandora to be able to couple it for use in Entune. Though the company succeeded in placing Pandora in the Prius v, it is worth noting that iHeartRadio is also standard on Entune.

This announcement is on the heels of last’s week’s news that Pandora would be available as a featured application on Amazon’s Kindle Fire, but it will also be on Barnes and Noble’s nook. It seems that since Clear Channel is aggressively taking steps to make consumers more aware of iHeartRadio by adding many features to it, Pandora is trying to maximize their exposure in order to counter it.

Since Pandora has not made any significant updates or announcements for future plans on their application’s improvement as of late, it makes sense that they would try and capitalize through innovations in other areas. Though Pandora isn’t necessarily new, adding it to products that are new breathes more life into the application, and also makes those products seem ‘hip,’ because internet radio is often perceived as more modern and advanced than other forms of radio.  

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Heard It on the Radio

Radio and Television Business Report posted a summary of a new study by the NPD group of the National Association of Recording Merchandisers that indicates terrestrial radio is still the number one method people use to discover new music. In their field surveys, 60 percent of those polled said that radio is how they become aware of current music.

Television is the main competitor to radio, but social media, websites, movies and word-of-mouth also challenge the medium. One of the biggest drawbacks the study noted in regard to radio’s influence is that it would be much more effective if the songs and artists were more regularly identified, so that people would be driven to purchase music easier than is usually the case.

The study lumped consumers into one of five categories: committed, converts, comfortable, casual and content. Those who are “committed” are most likely to discover music by multiple means, and very likely to purchase music. Though they only make up 15 percent of musically active consumers, they make up 46 percent of people who are spending money on music. The “converts” and “comfortable” groups are larger in percentage of musically active consumers, but both these and “casual” and “content” are less likely to make purchases.

The main message here seemed to be that radio identification must be emphasized to maximize sales. This could definitely signal a greater emphasis on radios that have displays with artist and song names, especially in automobiles.

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Center for Communication Seminar Summary

Yesterday I attended the Center for Communication’s presentation “How to Be Your Own Best Publicist: A Crash Course in Promoting Yourself at Work,” hosted by Jessica Kleiman, the VP of public relations for Hearst Magazines, and Meryl Weinsaft Cooper, the co-founder and principal of Allen/Cooper Enterprises. The two hosts are the authors of Be Your Own Publicist: How to Use PR Techniques to Get Noticed, Hired and Rewarded at Work.

The seminar started with the pair showing pictures of celebrities and asking the question, “What is their reputation?” They seemed to have an affinity for George Clooney, but raked poor Lindsay Lohan through the coals. The point was to emphasize that your reputation in any business must always remain intact. They told the audience that people should think about what makes them great, and even ask others, so that individuals can be more aware of the strengths. I think better advice would have been to tell them to ask people, “What is it that doesn’t make me great?” I mean, if you are going around fishing for compliments, it doesn’t really build anything. It probably just helps confirm assumptions one carries for oneself.

They shared five of their ten success methods:

1.      Message is Key

2.      All About Who You Know

3.      Toot Your Own Horn (But Not Too Loudly)

4.      Anything You Say Can Be Held Against You

5.      Every Crisis is an Opportunity

Most of these were explained with cutesy little one-liners, such as “Your network is your net worth.” Regarding the third method, they emphasized the importance of seeking third-party endorsements for occupational successes, so that people can better justify to employers their accomplishments. They spent a significant amount of time on the fourth method, noting that “Google is your first resume,” and that people need to watch their digital footprint. While I believe this is true, the way they represented it pointed out how flawed and obsessive our society has become with social media. They talked about ‘better not have that beer bong picture on there,’ and I just thought, ‘wow, imagine how many execs have a stash of cocaine at their desks, right now, or hiring managers that are hardcore alcoholics.’ As much as it was meant to help people, I think it showed how shallow the hosts were to really think that all of people’s accomplishments mean nothing because there might be some suggestive picture. Get over it.

As far as crises are concerned, they noted that if mistakes are made people should own up to them and learn from them. This led into a very uninteresting round of questions, which absolutely showed that most of the audience members had no concept of how to succeed in the work place, so perhaps the book will sell well for Kleiman and Cooper. For me, I found the information to be common sense and full of little substance. I’m sure there are more details in the book, and the two women have a track record for success, but I really don’t think that any of their information is groundbreaking or something that you can’t read in the umpteen million career books that are out there. As far as satisfaction goes, I will have to attend another Center for Communication seminar sometime to feel fulfilled.

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Hispanic Audience is the Must-Have Demographic

Radio and Television Business Report posted an article November 4 where Randy Falco, the CEO of Univision Communications, commented on the recent pairing of the company’s radio stations with Clear Channel’s iHeartRadio. According to their website, Univision Radio is the “#1 Spanish radio network in the country, and in major markets, it is home to stations that rank #1 in any language,” and Falco is ecstatic about extending Univision’s stations’ reach.

I have been writing something about Clear Channel and iHeartradio almost every week it seems, but they just keep making moves to stay in the headlines. I’ve written in prior postings about the power of the Hispanic demographic and that all the key players are trying to win its appeal. Sirius XM is attempting this with its 2.0 upgrade and now Clear Channel will be further tapping into this market via iHeartRadio. Sirius XM, though, will be testing new original programming, while Univision is a leader among Hispanic outlets. Clear Channel scored in a big way being able to offer Univision’s programming, because the base audience is clear and Univision’s revenue continues to climb. Additionally, no one has to pay for iHeartRadio (yet!) so they also have that advantage over Sirius XM.

This should definitely work to Univision’s advantage, and almost daily Clear Channel is adding programming to iHeartRadio that boosts its appeal among many different fragments of the national audience, so capturing one of the largest is advantageous for them. If Clear Channel really does offer up its digital assets in a separate IPO, Pandora and the other mobile applications better watch their back, because in all the trade publications its iHeartradio you are reading about week after week. The others don’t seem to be bringing anything new to the table.

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Study Claims Radio Boosts Product Appeal

Ipsos OTX MediaCT and Katz Marketing released the results today of a study which claims that radio advertising has a positive impact on all phases of what they call the “purchase funnel.” This funnel has five stages: Assessment, Familiarity, Affinity, Purchase/Consideration, and Recommendation.

The study focused on certain control groups who were listening to stations in a chosen area versus people who did not listen to these stations at all. They conclude that people exposed to radio ads improved in every area of the purchase funnel, especially when it comes to affinity and recommendation, each with a 39 percent and 38 percent increase, respectively. Additionally, by using their “Emotive Power Measure,” they also came to the conclusion that ads with emotional appeal tended to yield the greatest influence on the purchase funnel.

I would like to see some harder statistics released, though, because it seems quite a broad claim to say that they are able to measure affinity. I mean this would be a natural inclination to buy a product. If anything, I think maybe this is a poor word choice. Maybe “recall” would have been better. If the ad had to produce exposure to a product, then there is nothing natural about it. It’s Pavlonian in a way. In actuality, this study is kind of funny anyway. Of course people who listened to radio ads would have greater recall than people who didn’t, because… well… they didn’t get exposed to the ads. Seems like a no-brainer to me. Also, the bit about the emotional appeal is sort of elementary advertising. If radio execs need to be taught and convinced of this, maybe they shouldn’t be execs in the first place.

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Proposed Spectrum Fees Ruffle Feathers

The Congressional Super Committee, tasked with reducing America's deficit, has proposed extra spectrum fees for terrestrial radio stations, and the National Association of Broadcasters is up-in-arms over it.

The extra tax, if approved, would allow the FCC to garner $4.775 billion during the ten years which would follow the tax's implementation. NAB is arguing that more taxes to radio providers on top of the taxes they already pay would be too much of a detriment in a time when not only radio revenue is small, but also that of the nation. They say that there would be even more of a struggle to get advertisers when businesses are becoming more reluctant to spend that much on spots.

Additionally, because the FCC can pick and choose who gets what taxes and that there would be free reign on how those taxes were instituted, the policy is then not fair, because some stations would have an advantage over others. While the goal of Super Committee is to help fight the deficit, it does seem that this tax does not yet have enough fine details to help pass it. It likely will face continued scrutiny from the radio lobby.

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Who Needs DJs?

Last Wednesday, Clear Channel announced that it had laid-off a significant number of DJs at local stations from coast to coast. The New York Times reported that it was not about trying to save money, but more about trying to earn more money from delivering a revamped product.

Clear Channel has said that listeners should still expect localized reports, but that these reports will come from regional offices where teams will build broadcasts targeted to certain areas and that these will then be sent to local stations. There will also be a greater presence of syndicated programming.

Business-wise this makes plenty of sense for Clear Channel, because as the number one owner of terrestrial radio stations, the company has already been homogenizing the content listened to for years. The disc jockeys played little to no part in what music was actually being chosen, so unless they had superstar hosts, it probably was not the on-air talent bringing in the ratings.

Clear Channel has also announced that their quarterly profits are up 7 percent, and this is not due to the layoffs. If more of the popular syndicated broadcasts are available with better talent and people still get local news, it is probably fair to say that the revenue stream will continue to grow, helping the company chisel away at its $20 billion in debt.

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What Do They Really Care About Here?

Radio Business and Television Report vomited out a Clear Channel press release in the form of a news story about the company’s commitment to support Small Business Saturday, which is scheduled for November 27.

The initiative is meant to steer people toward small businesses on the weekend after Thanksgiving. The effort will include “a public interest campaign, social media content, on-air advocacy by on-air talent and community events.” Special spots will be made to support the local businesses and local public officials have signed on to promote local commerce.

While this effort is heartwarming, it doesn’t really mask the fact that this is simply to keep local businesses buying ad space in a downturned economy. In my opinion, this is an obvious business ploy. I think the real thing to pay attention here to is that the digital sites will also feature targeted local advertising.

Why is this important? Well, because iHeartradio is set to be the only mobile platform that truly advertises for mom and pop businesses. While this might be beneficial to a minute degree for these local businesses, it is yet another way Clear Channel is positioning iHeartradio as a unique asset among its competitors. They are embracing advertisers that don’t have to have national appeal or even high dollar local businesses that can sneak in an ad or two, like is the case with Pandora. Make no mistake; this is not about goodwill. It is about money and increasing the marketability of their digital products.

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What's the point?

Ever heard of AOL Radio? Yeah, I didn’t think so. FMQB reported October 20 that AOL Radio is being revamped and will be “powered by Slacker.” This is all well and good, but it should leave a reader wondering, ‘What’s the point?’

Apparently the advertising is now cut down by half and customization will be more seamless. They modeled the update to the program from the five or so listeners who have provided feedback on how to improve the radio service.

AOL Radio is still going to be a subscription service, with two levels of membership, just like Slacker. So… why not just get Slacker… ? I can’t make much sense of this. Obviously Slacker likes the exposure to say that they “power” AOL Radio, but with AOL’s paltry listenership I don’t know what the benefit is. If anything, why wasn’t their just a merger of the two, if AOL really has a “breadth of content.” I may be wrong, but from my personal experience, I’d rather just use Slacker when comparing the two, and I have a strong feeling most other listeners would too.

Seriously, why would anyone pay for AOL Radio, when it is “powered” by a different, better music application? Just cut to the chase and get Slacker. This seems like a desperate attempt by AOL Radio to seem relevant, and quite frankly does next to nothing for Slacker except gain it a minute amount more of exposure.

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Clear Channel Lassoes Best of Public Radio

Clear Channel Media launched a press release today to bring attention to the latest addition to iHeartradio: WNYC. WNYC is arguably the most successful and statistically the most-listened to public radio station in the nation.

Though the station boasts many segments, for the time being iHeartradio will focus on “The Takeaway,” “The Brian Lehrer Show,” and “The Leonard Lopate Show,” covering news, politics, and arts and culture, respectively. This is a very smart move for Clear Channel, because the average audience for public radio, according to Arbitron, has household income greater than $74,500. By channeling programming to this demographic, it adds more draw for higher paying advertisers.

It is interesting on WNYC’s end, because they launched their own mobile application just six days ago. With the combination of the internet, their mobile application and iHeartradio, the station is staying true to its goal of delivering programming to “national audiences,” which the New York Public Radio Vice President and Chief Digital Officer Thomas Hjelm pointed out in recent press release.

The collaboration seems to be a win-win for both sides, as WNYC is able to potentially increase their listenership many times over, while iHeartradio can wrangle wealthier listeners.

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SiriusXM Dos Punto Uno

The satellite radio provider SiriusXM sent out a press release today to reveal that the company’s 2.0 conversion has become available to customers. Subscribers will see the addition of several new channels and optimized audio, thanks to major software and hardware updates which will reportedly deliver “25 percent more bandwidth capacity.” The company is pimping its latest receiver, the SiriusXM Edge, as the best one on the market to handle the upgrade. It carries a price sticker of $139.99.

In an obvious attempt to combat internet radio, the Edge receiver “allows customers to pause, rewind and replay live satellite radio programming, and boasts a large color graphic display to view artist name, song or show title and channel information.” This should be a great addition to the company’s offerings, because it allows a degree of customization that seems to be the key forecasted ingredient to the future of radio.

In all of this, though, there is one thing that blatantly stands out as the clear goal: capture the Latino market. According to the Radio Advertising Bureau, 95 percent of Hispanic Americans listen to terrestrial radio. With SiriusXM’s 2.0 upgrade, it is obvious that they are trying to swing some of that listenership over to satellite. Various genres had channel additions, but Latinos and fans of Latino music got the lion’s share, with a “wide variety of music genres, including tropical, salsa, merengue, Latin pop hits, Latin hip-hop, Latin rock classics and … news and talk from RadioFormula Mexico.” There is also a dedicated Sirius XM page for the Latino audience.

The business plan here is clear: modernize the equipment to allow for more customization and increase business to minority listeners. SiriusXM might definitely be on to something, considering the business is becoming more and more fine-tuned. Every side of the business is micro-targeting, and the most profitable will likely be the providers who can effectively reach out to largest of those micro audiences.

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Speculations Abound for Future of CC Media

In a recent article by Radio and Television Business Report, the website tries to shed some light on the future stock prospects of Clear Channel Media now that Bob Pittman is at the helm as the company’s President and CEO. The larger rumor is that CC Media will attempt an IPO for the company to try and increase the number of stockholders, due to the fact that the majority of current shareholders rejected a $36 per share buyout in previous deals.

More interestingly, though, RBR reported in the same article that CC media may break off its digital media assets into an IPO. This would basically mean that they are offering up iHeartradio as a public company, and this would directly challenge Pandora. RBR is quick to point out, though, that even if this is the case, Pittman should put most of his energy into beefing up iHeartradio as a product before trying to push it into a tepid public market.

Although there might be a bit of a wait if this actually happens, as I noted in my last blog, Clear Channel is taking strides to make iHeartradio the ‘it’ application for internet radio. It is going to be interesting to see what Pandora does over the course of the next year to prepare for what might be a full-out attack from Clear Channel.