This week, radio industry muckraker Jerry Del Colliano published a blog post announcing his acquisition of a "secret memo" from Clear Channel CEO Bob Pittman to executive staff. The details of the memo itself are hidden behind Del Colliano’s blog paywall, but the preview is worth a gander.
Reportedly, the memo is entitled "Expanding iHeartRadio onto the Terrestrial Platform" and outlines exactly how the broadcast conglomerate plans to do this. It is unclear from the preview just what the plans are, but it definitely signals that Clear Channel aims to use its iHeartRadio streaming platform as a primary content provider to some (if not most or all) of the company’s radio stations. The Pittman plan also reportedly suggests that iHeartRadio will become the company’s "main source of revenue" in the process.
If true, it’s a huge step toward the evolution of terrestrial broadcasting in the U.S. away from live-and-local service into something where radio stations effectively become advertising, promotional and content-relay nodes that work in subservience to a broadcasters’ streaming platform. The implications for what this means for the future identity and service goals of radio are profound – but Clear Channel’s strategy in this regard has been developing for quite a while.
I first wrote about this more than a year ago, when Clear Channel conducted a mass-firing and began to heavily promote its radio stations under the iHeartRadio brand. Since then, the firings have continued, "Radio" has been removed from iHeartRadio’s own URL (the word has also been dropped from CC’s corporate name), and the service has developed Pandora-like customizable content "channels" for users.
This is all part of a larger struggle radio is having about how to leverage the internet usefully. A few broadcasters have turned over their stations to app–platforms which actually allow listeners to "program" them; one station in Tampa Bay, Florida now does this 24/7, with "DJs" only involved in maintaining the station’s playlist and editing user-submitted commentary and shout-outs.
Mass firings in radio have been taking place for years, as heavily-indebted conglomerates (including Clear Channel) cut operating costs to the bone in order to compensate for the stations they swallowed in the post-1996 consolidation heyday, when station prices were wildly inflated in a buyer’s bubble (sound familiar?).
Yet many broadcasters still continue to be wary of streaming itself and don’t understand how to design and market their online presence. Lots of them (both commercial and noncommercial) have opted to not go it alone, preferring instead to become "affiliates" of Clear Channel’s iHeartRadio – giving the company powerful leverage over the streaming profile and permissions of those broadcasters who sign onto it. The company’s also made significant advances getting the iHeart app installed in many automakers’ infotainment systems.
It’s well-established that Clear Channel is a market-maker in many aspects of the radio industry, so it’ll be interesting to see just how this nebulous new strategy affects the industry’s relatively chaotic dance with online platforms. But if what Del Colliano insinuates is true, it’s a major move toward the subsumption of a legacy media platform in homage to convergence.
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