On September 16th, the world’s largest mass media company, Clear Channel, announced that it had officially changed its name to iHeart Media.1 Clear Channel is also switching its ticker symbol to reflect the new name. The move reflects the media company’s growing momentum and reach of its Internet radio service, iHeartRadio, and its increasing push towards digital services.
Clear Channel has come a long way from where it started—a single radio station in San Antonio, TX in 1972. Over the years it built an empire with the help of the 1996 Telecommunications Act, which softened radio ownership restrictions. Prior to the Telecommunications Act, companies were kept to a limit of 40 domestic radio stations.2 In the time since the restrictions were lifted, Clear Channel has grown continuously, and now owns an unparalleled 859 radio stations.3 The monthly reach of iHeart Media in the United States is argued to be greater than either Google or Facebook, with about a quarter of a billion listeners.
In 2008, Clear Channel was taken over in a $17.9 billion private-equity deal with Bain Capital, and Thomas Lee Partners. The buyout occurred at the peak of the market and has since left the company with a significant debt. The result has been significant layoffs and the inevitable re-structuring. Yet throughout Clear Channel has stood firm as the most listened to radio station conglomerate in the US.
Content on multiple platforms
Today, iHeart Media serves over 150 different markets through its ownership and operation of radio stations. The company prides itself on being a multi-platform leader, with content delivered to consumers on many media including digital radio, terrestrial radio, and satellite radio. iHeart has also been building their mobile presence through their iHeartRadio mobile application.
In a broader sense, the shift towards digital content can be seen across the industry, with the development of new technology that allows new possibilities for listeners. Other competitors in digital music, such as Spotify, and Pandora, continue to make headlines and attract new listeners everyday. Perhaps a name change for a company so tightly linked to the broadcast radio format is necessary as they look to compete with these well established services, and build upon the success the have already seen with iHeartRadio.
Evidence supporting the name change can be seen in the astounding level of Consumer brand awareness for iHeartRadio—nearly 70% within three years. iHeartRadio has seen tremendous growth since its inception, reaching 50 million users in a shorter period of time than social networking sites Facebook, Twitter, and Pinterest–and significantly faster than any competing digital music service. The mobile iHeartRadio application has already surpassed 345 million downloads. Additionally, in 2013, iHeartRadio was ranked as the #5 media brand on Facebook.
But a name switch by a leading media giant such as Clear Channel, even if meant to reflect the company’s increased movement towards digital services, inevitably casts a shadow of doubt on the future of its traditional radio services. With an increasing number of appealing alternatives, it’s easy to speculate that their broadcast radio stations will see their audiences greatly diminish. The numbers, however, paint an entirely different picture.
Chairman and CEO, Bob Pittman, remains confident in the future of broadcast radio. As Pittman points out, roughly 92% of Americans listen to broadcast radio every week. Many may underestimate the medium, but people utilize terrestrial airwaves far more than they are given credit.
According to Nielsen, consumers spend, on average, approximately two hours and forty-five minutes listening broadcast radio every day. Interestingly, that’s second only to watching TV, and surpasses time spent on the Internet. Another statistic says that 73% of listeners discover their new music through traditional radio, making it the leader in music discovery. Radio, of course, has the advantage of coming standard in every automobile, making it the most used platform for listening outside the home.
Another important distinction is that broadcast radio, unlike Pandora, Spotify, and other such services, offers a diverse array of programming, including talk radio, news broadcasting, and live sports coverage—all of which is in addition to musical offerings. So it is likely iHeart Media is going to continue bolstering traditional radio while delivering content on additional platforms.
The company has made a commitment to expanding the iHeart name wherever possible, including in the broadcast of live entertainment. Three years ago, Clear Channel presented the first annual iHeartRadio music festival in Las Vegas, and was met with overwhelming success. Now in its fourth year, the concert continues to draw a sold-out crowd, while simultaneously allowing listeners to stream the concert live online, with mobile devices, and on certain radio station websites. This attention has been yet another driver of the iHeart brand among new consumers.
While the company’s name change signifies some strategic shift, there isn’t much right now to indicate that traditional radio services will play second fiddle to new media. Besides, despite iHeart, the Clear Channel name will not be completely lost. Clear Channel Outdoors is a successful subsidiary of iHeart Media, and one of the world’s largest outdoor advertising companies. Its name will not be changed. Other Clear Channel brands such as Total Traffic and Weather Network, which boasts 196 million monthly consumers, will also keep their namesakes.
1. “The World’s Largest Media Company Changes Its Name.” RapRehab. 17 Sept. 2014. Web. 29 Sept. 2014. <http://raprehab.com/worlds-largest-media-company-changes-name/>.
2. “Clear Channel Becomes IHeartMedia.” Clear Channel Becomes IHeartMedia. 16 Sept. 2014. Web. 28 Sept. 2014. <http://www.clearchannel.com/Pages/Press.aspx>.
3. “FCC’s Review of the Broadcast Ownership Rules.” Federal Communications Comission, 30 July 2014. Web. 27 Sept. 2014. <http://www.fcc.gov/guides/review-broadcast-ownership-rules>.