Clear Channel Swipes Pandora With 'iHeart' Revamp
LOS ANGELES (AP/CBS SF) - Radio station giant Clear Channel Communications Inc. is taking a swipe at Oakland based, online music service Pandora with a revamp of its 'iheartradio' application that imitates Pandora's personalized listening experience but doesn't mimic the startup's need to turn a profit.
The operator of over 850 radio stations nationwide is kicking off the new service with a star-studded two-day concert in Las Vegas on Sept. 23rd and 24th featuring acts including Lady Gaga, Coldplay, Black Eyed Peas and Jennifer Lopez.
Bob Pittman, chairman of media and entertainment platforms for Clear Channel Communications Inc., said the success of Pandora Media Inc. proves that people like being able to stream songs according to their personal tastes on mobile devices.
Pittman said 'iheartradio' will adopt that feature in a gradual relaunch over the coming months.
Pandora went public with an initial offering of shares last month but its stock price has seen-sawed as euphoria among Internet investors gave way to the reality that its ad revenue has not grown fast enough to cover the royalties that it pays to play music. Pandora's stock closed at $19.27 on Friday, about 19 percent above its initial public offering price.
Pittman said Clear Channel, a privately held company that had $5.9 billion in revenue last year, doesn't need to turn a profit if its new service helps reach audiences in different ways.
"To us it doesn't matter if it ever succeeds as a business," Pittman said in an interview. "We only have to have it succeed as a feature."
Pandora has said it has about 94 million registered users and more than 30 million listeners a month.
Pittman said Clear Channel isn't far behind, with about 27 million monthly online visitors, although that figure includes visitors of radio station websites and those who listen to the 'iheartradio' application. Clear Channel reaches 237 million listeners over traditional radio airwaves every month.
'Iheartradio' allows listeners to hear the feeds of stations outside their market and to certain channels that stream music along specific genres. Clear Channel acquired streaming music company Thumb play in March, and used its technology as the basis for the new customized radio feature.
Pittman said that the new 'iheartradio app' will have access to 10 million tracks, millions more than Pandora, and run without ads for the rest of the year. The company is also offering freebie concert packages to listeners to build buzz around the relaunch.
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