Why Clear Channel’s Web Radio Will Fail

Clear Channel has made it evident many times over the years that it's not in the business of music or news. No, it's in the business of consumer marketing. If Clear Channel's attempt at a web radio service can't sell the masses cars, beer, and fast food while still doing nothing to compete with its regular programing, it will fail.

And that's the point, by design it should fail. If by chance it's wildly successful, Clear Channel will kill it off. It's not like Clear Channel can steal listeners from itself and give them a web radio service that they only listen to temporarily while they're away from their local stations. If Clear Channel creates a product that's any good – i.e. worth making a remark about – it will be better than actual radio.

The Hulu Problem

Given that a web radio service will be saddled with licensing costs, it will bring in lower margins. Clear Channel might be able to charge a premium for the targeted ads, but it won't take long before it gets greedy and ruins the user experience. In relative terms, Clear Channel wants to create a Hulu to compete with Pandora.

However, making incremental changes to its existing product doesn't mean that it will gain an edge on its competition. Everything that Clear Channel does will be in support of its current business model, which is consumer marketing. It sells cars.

Pandora is disruptive by design, destructive by nature.

Vs.

Clear Channel is stagnant by design, monopolistic by nature.

Major TV networks are learning every day that Hulu is not TV on the Internet. It's an entirely new game. If Hulu actually succeeded, it would kill traditional TV.

If Hulu even hints at killing major TV networks, they will kill Hulu.

Sadly, viewers don't just flock back to TV. Hulu – like MOG and Pandora – fundamentally change what consumers want from what they experience.

Clear Channel and traditional radio in general can't create something that shifts the expectations that listeners have for their product. Radio isn't their product.

Consumer marketing is their product. The music and news is just a façade.

There's potential for Clear Channel to embrace Thumbplay to create a better product, but that doesn't give them a different product. It still sells cars.

Like TV, radio suffers from the Hulu problem. It can't create the future of its business, because if it were actually the future it would have to kill it.

Clear Channel can't create a new thing to compete with its old thing because it never did the old thing to begin with. Radio is bland, redundant, and delocalized, which is why listeners are turning away. Pandora is exciting, ever changing, and personalized, which is why listeners are tuning in. It changed their expectations.

Forever.

Radio Kills Radio

Due to the period of time that it takes radio to grow incrementally better, a chasm is opening up for entrepreneurs to create an experience that's drastically better.

The more merged and conglomerated that traditional radio becomes, the less control it will have over the independently created radio stations that will trickle up through its empire. The connected car and its subsequent app store will provide new companies with a gateway into the mainstay of traditional radio. In trying to compete, radio will kill itself to live. Stations will put themselves out of business.

In the past, it was thought that TV would kill radio.

Ultimately, that prediction turned out to be wrong. Given enough time, radio will kill radio. Why? Because Clear Channel never actually did radio in the first place.

As soon as companies that do radio come along, traditional radio is screwed.

Clear Channel turned into a consumer-marketing firm fifteen years ago; it doesn't know [radio edit] about running a radio station. It isn't a radio company. Period.

The radio companies of the future will have radio stations. Imagine that.