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After a Slow Start, Clear Channel Enters the Online Radio Fray

Posted on: Tuesday, 19 July 2005, 12:00 CDT

After giving its Internet competitors a huge head start, Clear Channel Radio is ready to play catch-up.

The dominant company in the U.S. radio market, with more than 1,200 stations, Clear Channel is introducing its first meaningful online strategy after what could be the most protracted example of Internet indifference among major media businesses. At long last, Clear Channel is building more original programming and other features into its stations' Web sites to lure listeners and, it hopes, new advertisers.

"This is an easy way for Clear Channel to increase their stations' midday audiences, by making the stations available to office workers who have either no radio or bad reception in their offices," said Kurt Hanson, publisher of the Radio and Internet Newsletter. "And it opens up a whole new set of advertising opportunities."

Competitors and analysts say they welcome Clear Channel's initiatives, because online radio has just begun to attract the attention of listeners and advertisers. And they say they expect the company to succeed despite its late start.

Clear Channel Radio, which is owned by Clear Channel Communications of San Antonio, Texas, has been going through the motions online for years. The company's stations have dedicated Web sites, but they offer little more than pages cluttered with advertisements, song lists, entertainment news and pictures of disc jockeys.

This month, Clear Channel began replacing those Web sites with simplified sites, featuring fewer ads and highlighting original programming, live Webcasts and other elements intended to keep visitors engaged.

The relative dearth of ads makes it easy for visitors to find "Stripped" and "Sneak Peek," two new online-only features introduced in recent weeks. "Stripped" is Clear Channel's version of MTV's "Unplugged" series: a live performance that visitors can either watch or listen to as an audio feed.

"Sneak Peek" offers Clear Channel's online visitors the chance to listen to tracks from albums that have not been publicly released. Last month, 375,000 people logged on to the company's sites to hear an album from the Backstreet Boys four days before its debut in stores.

Given the pedigree of the man leading Clear Channel's new online strategy, such changes are not necessarily surprising. Evan Harrison, the Clear Channel executive vice president for online music and radio, was lured away from AOL last year. While there, he oversaw the company's highly successful Radio@AOL division.

Harrison said that when the Clear Channel Radio chief executive, John Hogan, hired him, "he made it clear it was time to do something serious."

Off line, Clear Channel Radio reaches about 110 million people each week. Online, the Clear Channel Web sites reach eight million each month. Harrison said he expected that the new online-only features would help the company's Web sites "quickly compete with all the online entertainment destinations.""After we build the audience, we'll be able to bring in our advertising partners," he added.

Clear Channel is also cashing in on the podcasting trend. Podcasts, or downloadable audio files, have generated considerable interest in recent months, partly because they allow professionals and amateurs alike to create miniature radio programs and distribute them freely. Music companies are still trying to determine how to allow for widespread distribution of songs within podcasts while complying with copyright laws. In the meantime, though, Clear Channel and its chief off-line rival, Infinity Broadcasting from Viacom, have found early success with nonmusic podcasts.

Overall Internet radio usage, while growing, remains comparatively small, according to Arbitron, the radio monitoring service. In a survey in January, 22 percent of Americans had listened to Internet radio broadcasts in the previous month, compared with 10 percent in January 2000. Yahoo claims the biggest online radio audience, with about 2.8 million weekly visitors in March, according to a survey by Arbitron/comScore Media Metrix, AOL was second, with 1.8 million listeners, and MSN and Live365 also attracted sizable audiences.

As Clear Channel vies for more online visitors, the competition is hardly standing still. In May, Yahoo started a subscription service that offers commercial-free radio, personalized playlists and a feature that lets people transfer music tracks to portable devices.

AOL, meanwhile, last month began allowing nonsubscribers to listen to its 200 radio stations on AOL.com around the clock, as part of the company's strategy of attracting more non-AOL members to its free Web site. Previously, nonmembers could listen for two hours daily, according to Bill Wilson, AOL's senior vice president of programming.

Last week, AOL announced that this month it would begin carrying 20 stations from XM Satellite Radio on AOL.com's radio service.

Source: International Herald Tribune

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