iHeartMedia INC.

Link

by Michael Rubloff

Contact Information:

iHeartMedia INC. 200 East Basse Road, San Antonio, Texas, 78209 (210) 822-2828

Company History

iHeartMedia INC. was founded in 1972 with the purchase of a first FM channel in San Antonio under the name of Clear Channel Communications. iHeartMedia expanded over the course of thirty years, and by 1995 owned forty-three radio stations. However, with the Telecommunications Act of 1996, iHeartMedia radically expanded and added several stations. Currently, iHeartMedia owns eight hundred-fifty radio stations in the United States that reaches 150 markets. In September 2014, Clear Channel Communications rebranded itself as iHeartMedia INC. [1]

Clear Channel Logo [2]

iHeartMedia INC. logo [3]

On September 16th, 2014 Clear Channel made a massive commitment to the future by rebranding to iHeartMedia INC. The former name Clear Channel was derived from an AM channel and is no longer relevant. iHeartRadio however, is a massive source of entertainment for millions of people. iHeartMedia better reflects what Clear Channel had built and its goals for the future. iHeartMedia also felt that its name was not well known compared to other services such as Spotify and Pandora even though iHeartRadio provided millions of people everyday with entertainment. This move was made in order to make the brand and the product more synonymous with each other.

Corporate Leaders:

Robert Pittman, Chairman and CEO of iHeartMedia INC. [2]

Robert Pittman, Chairman and CEO of iHeartMedia INC. [4]

Richard J. Bressler, President and CFO of iHeartMedia INC. [2]

Richard J. Bressler, President and CFO of iHeartMedia INC. [4]

Wendy Goldberg- Executive Vice President and Chief Communications Officer

Wendy Goldberg, Executive Vice President and CCO of iHeartMedia INC. [4]

Gayle Troberman, Executive Vice President and CMO of iHeartMedia INC. [4]

John Sykes, President of Entertainment Enterprises of iHeartMedia INC. [4]

Financials:

iHeartMedia is a publically traded company in the OTC market (IHRT). Over the past year the stock has remained relatively stable with a year low of $6.10 and a high at $9.40. The high occurred in the week after the announcement of the rebranding to iHeartMedia.[5] Previously, the ticker for Clear Channel was CCO. In its third quarter report, iHeartMedia reported that revenues were up three percent to 1.6 billion dollars. [6]

Past Six Months of Stock Values of iHeartMedia [3]

Past Six Months of Stock Values of iHeartMedia [5]

Competitors:

iHeartMedia’s long-standing rivals have been CBS Radio and Cumulus Media. However, in the past ten years with the emergence of Satellite Radio, Sirius XM has taken over as iHeartMedia’s biggest rival in terms of revenue. iHeartMedia has permeated SiriusXM, as two of the stations featured on SiriusXM, Z100 and Kiis 102.7, are owned by iHeartMedia.

Pandora Logo [7]

Now that iHeartMedia is putting a focus on its online music service, iHeartRadio, it now competes with Spotify, Pandora, iTunes Radio, and Google Play. In this field iHeartRadio has a great deal of catching up to do as Spotify and Pandora dominate the online streaming market.

However, iHeartMedia has an advantage over its competitors because it crosses over multiple platforms. For instance, Other radio giants such as Cumulus or Sirius are limited to their radio stations. On the other hand, Pandora and Spotify are limited to their apps or their website. iHeartMedia is able to cross between these two platforms in order to better serve their customers desires. Because of this, it is able to capitalize on where its competitors are limited.

Events:

iHeartMedia is known for its excellence in creating live events directly catered to specific demographics. On October 2nd, it announced the first ever iHeartRadio Fiesta Latina, a massive concert aimed at Latin music fans.[8] It took place on November 22nd, and was a massive success. This experimental event seems to have been a good investment for iHeartMedia as their Spanish and English radio stations reach “93 percent of Hispanics monthly” [9].

iHeartRadio Fiesta Latina logo [10]

The Fiesta Latina is the newest addition to iHeartMedia’s collection of live events including the Jingle Ball Concert Tour, Country Festival, and the iHeartRadio Music Festival. While it remains to be seen if the Fiesta Latina will be made into an annual event, it most likely will given its success. One week later, on October 9th, the lineups and locations of the iHeartRadio Jingle Ball Tour were announced. This annual tour has become one of the year’s most exciting events. The tour will begin on Sunday, November 30th and finish on Monday, December 22nd. This event is supposed to cater to listeners of the top40 stations on iHeartRadio and reflect what listeners want to see. This year the New York City concert will be streamed exclusively on Yahoo.com for fans who are unable to attend.[11]

October 2014:

October was a busy month for iHeartMedia as it made several business announcements. On October 7th, iHeartMedia announced a $200 million partnership with Omnicom to develop a multi platform device that will give insight into iHeartMedia’s events as well as technologies.[12]

While this will help Omnicom better target customers, the real winner is iHeartMedia. This deal is dangerous for iHeartMedia’s competitors because this project will allow iHeartMedia to see how it can improve on its multi platform features. Essentially, iHeartMedia will continue to widen the gap between what Pandora and Cumulus are able to do. This will help iHeartMedia become a more versatile company and extend its already industry leading reach.[12]

The next day on October 8th, iHeartRadio announced that it would be available on Android Wear beginning on October 15th. This represents another step forward for the integration of iHeartRadio in technology as iHeartRadio had already announced integration with “Amazon’s Fire Phone, Amazon’s Fire TV, Android Auto, Google’s Chromecast, Apple’s CarPlay, Samsung’s Gear 2 Smartwatch, Qualcomm’s AllPlay and new auto partnerships with Subaru, AT&T Drive, GM, Jaguar Land Rover, Kia and Volvo” [13] earlier this year. By spreading across to different manufacturers, iHeartMedia makes itself more accessible, convenient, and well known. This strategy is directly reflective of the rebranding because it exposes more users to the services provided by iHeartMedia.

iHeartMedia did not stop there. On October 15th, Gayle Troberman was named the Chief Marketing Officer of iHeartMedia. This is a new role created with the intention to “connect them (iHeartMedia) more closely to consumers, helping integrate the company’s brands, products and platforms even more deeply into consumers’ daily lives.” [14] This is necessary after the rebranding because it will decrease the amount of time needed for consumers to become familiar with the iHeartMedia brand. This is a fantastic idea and could pay off exponentially for iHeartMedia in the coming years. iHeartMedia is doing a fantastic job of identifying what it needs to improve and is taking logical steps to ensure it remains an industry leader.

What’s in the future:

In the next year, iHeartMedia hopes to continue to reach more customers through social media, live events, and radio. It hopes that its customers will become familiar with the iHeartMedia brand and be able to connect it to popular music events, radio stations, and the iHeartMusic application.

iHeartMedia has embraced the change that is coming to the industry and appears to pioneering the way for other companies to follow it. While the long term effects of rebranding remain to be seen, it has initially been successful. In the next half year, look for iHeartMedia’s competitors to try and catch up with the ability to move across platforms.

Resources

[1] Clear Channel Becomes iHeartMedia. Published September 16, 2014. Accessed November 22nd.

[2] Clear Channel Logo. Published June 26, 2012. Accessed November 29th.

[3] iHeartMedia INC. Logo. Date Published N/A. Accessed November 29th.

[4] Corporate Team. Date Published N/A. Accessed November 22nd.

[5] Stock Information. Updated Daily. Accessed November 29th.

[6] Financial Report. Published October 28th, 2014. Accessed November 22nd.

[7] Pandora Logo. Date Published N/A. Accessed November 22nd.

[8] iHeartMedia Fiesta Latina Announcement. Published October 2nd, 2014. Accessed October 30th.

[9] iHeartMedia Factsheet. Date Published N/A. Accessed November 22nd.

[10] iHeartRadio Fiesta Latina Logo. Published November 22nd. Accessed November 29th

[11] Jingle Ball Tour. Published October 9th. Accessed November 22nd.

[12] iHeart Media Omnicom Partnership. Published October 7th, 2014. Accessed November 22nd.

[13] iHeartRadio Android Wear Integration. Published October 8th, 2014. Accessed November 22nd.

[14] Gayle Troberman named iHeartMedia’s Chief Marketing Officer. Published October 15, 2014. Accessed November 22nd.

Clear Channel Communications

Posted on September 18, 2012 by grsanson

by [Gabriel Sansone]

Clear Channel Communications Logo [1]

Who is Clear Channel?

Clear Channel Communications is a global entertainment and media company from San Antonio, Texas, that specializes in digital and radio platforms, as well as outdoor advertising. Clear Channel’s radio division, Clear Channel Media and Entertainment, reaches 239 million monthly listeners in the United States, giving it the largest reach of any television or radio outlet in the country.[2] Clear Channel Media and Entertainment has holdings in 150 cities and owns 850 radio stations,[3] which can be heard via AM/FM transmission, Sirius/XM satellite radio, HD digital radio, the Internet, mobile applications on smartphones and iPads, and navigation systems from Garmin and TomTom. Other properties of Clear Channel Media and Entertainment include Premiere Radio Networks, the number one radio network in the country with 90 radio programs in syndication, and Katz Media Group, the leading media representation company in the U.S., with over 500 television and 4,000 radio stations.[2] Clear Channel Media and Entertainment also owns iHeartRadio, a free digital radio service that allows users to listen to more than 1,500 Live Stations.[2] Clear Channel Media and Entertainment is run by Chairman and CEO John Hogan, who graduated from Lake Forest College in 1979.[4]

Clear Channel’s History

Clear Channel Communications was founded in 1972 by Lowry Mays and Red McCombs as the San Antonio Broadcasting Company, and by 1984 Clear Channel had six AM and six FM stations in seven different markets. Clear Channel first entered the television business in 1988, and by 1995 was in control of 43 radio stations and 16 television stations in 32 different markets. With the passage of the Telecommunications Act of 1996, the company acquired 49 new radio stations that covered 20 markets. In 1997, Clear Channel acquired Eller Media Company, helping it to become a leader in outdoor advertising. By 1999, Clear Channel was ranked by The Wall Street Journal as the fifth best-performing stock of the 1990s, and today, under the leadership of CEO Bob Pittman, Clear Channel continues to be one of the leaders in both the entertainment and advertising industries.[5]

What’s Clear Channel Doing Today?

September

On September 27^th, Clear Channel announced that it had struck a deal with Glassnote Entertainment Group to pay sound recording performance royalties to artists signed to the Glassnote record label, whether their songs are played via digital media or over the air.[6] The revolutionary deal, similar to one Clear Channel

Glassnote Entertainment Group Logo [8]

forged with the Big Machine Label Group in June, allows the label to receive a (undisclosed) percentage of Clear Channel’s digital and terrestrial advertising revenue, as opposed to just receiving revenue on a per-play basis.[7] Clear Channel CEO Bob Pittman released a statement to the press, saying that the deal not only allows for Glassnote Entertainment Group artists to participate in Clear Channel’s radio revenues, but “it also creates a vibrant new digital radio business model that we believe will provide more money for the artists and the labels and more digital choices for the consumer.”[7] Popular Glassnote artists that will benefit from this deal include Mumford and Sons, Childish Gambino, and Phoenix.

October

On October 25^th, Clear Channel announced that the company successfully completed a private debt exchange of $1,999, 815,000 for new notes that are worth the same principal amount but due in 2019.[9] As Clear Channel is currently in almost $20 billion in debt,[10] this debt exchange is a step in the right direction for providing the company with “greater flexibility to manage our debt maturities in the future,” says company Executive Vice President and Chief Financial Officer Tom Casey.[9] The offering was reportedly highly oversubscribed, which shows that debtholders are prepared to allow Clear Channel more years to repay some of its debt.[11]

Throughout the week of October 27^th, Clear Channel dismissed dozens of local radio D.J.’s across the country in an effort to revamp their 600 U.S. regional stations. In a company statement, spokeswoman Wendy Goldberg said the firings came about because Clear Channel rethought their regional market strategy and “reinvented our operations in those markets in a way that will let us…succeed using all of Clear Channel’s resources, scale and talent.” However, the layoffs proved controversial, as many media reform groups believe that Clear Channel is sacrificing radio’s integrity by replacing locally produced programs with less costly shows that are syndicated nationally.[10]

On October 29^th, Clear Channel announced that it had stuck a deal with another record label, Naxos. Naxos is America’s largest digital distributor of independent

Naxos Logo [14]

classical music, with over 30,000 albums from various classical labels, including 6,500 on its own labels.[12] The deal is different from Clear Channel’s previous deals with Big Machine and Glassnote, as it only permits Clear Channel to pay Naxos for digital, not terrestrial, radio play.[13] The agreement is representative of Clear Channel’s current desire to continue to help radio permeate the digital world, and as part of the deal Naxos will assist with iHeartRadio’s digital classical station, “Classica.”[12]

November

On November 2^nd, Clear Channel released their quarterly earnings report for the third quarter of 2012, which ended on September 30^th of 2012. Clear Channel Media and Entertainment revenues experienced a 1%, $7 million dollar increase in comparison to the third quarter of 2011. This increase is due in large part to a 3% growth in radio revenues, which occurred as a result of increased national advertising, the growing popularity of digital radio service iHeartRadio, and the iHeartRadio Music Festival.[15]

On November 20^th, Clear Channel announced that its popular digital radio service, iHeartRadio, has been downloaded more than 135 million times and has over 20

iHeartRadio Logo [17]

million registered users. These numbers are particularly impressive, considering that iHeartRadio was launched a mere 13 months ago. In a company statement, Clear Channel Media and Entertainment Chairman/CEO John Hogan said “iHeartRadio has reinvented the digital radio experience and is a key element of how Clear Channel continues to reshape the media and entertainment industry.”[16]

On November 29^th, it was announced that innovative social commerce web site Lockerz made an agreement with iHeartRadio. Lockerz is a website on which users can discover the latest fashion trends and top brands, receive points (called PTZ) for sharing images and videos from the web, and use their PTZ for big discounts on fashion and electronic products.[18] Now, iHeartRadio’s 1,500 live and user-created custom stations are available on Lockerz, and members can earn PTZ for sharing and adding their favorite music and radio stations. Clear Channel hopes the agreement will help iHeartRadio to continue to grow in popularity. “Lockerz has built an incredibly passionate and social user base and is a great distribution platform for us,” said Brian Lakamp, President of Digital for Clear Channel Media and Entertainment.[19]

What’s Next for Clear Channel?

Clear Channel is helping produce the 12-12-12 concert, a show that will take place in New York City on December 12, 2012, with all proceeds from ticket purchases going to the Robin Hood

Poster for the 12-12-12 concert, featuring some of the notable artists who will be playing at the show [20]

Relief Fund to assist the victims of Hurricane Sandy. The concert has already secured distribution to over one billion people via various mediums to maximize awareness and relief efforts, and in a joint statement, event producers James Dolan (Chairman of The Madison Square Garden Company), John Sykes (President of Clear Channel Entertainment Enterprises) and Harvey Weinstein (Co-Founder and Chairman of The Weinstein Company) said the concert and its media distributors “will enable us to create a tremendous and unprecedented fundraising effort on a global scale to benefit the victims of this devastating storm.”[21]

Tickets to the show are currently available on Ticketmaster

Because of its current debt situation, Clear Channel could be experiencing some financial turmoil in the future. According to a Moody’s report released during the week of December 5^th, while Clear Channel should be able to manage the amount of debt they have due through 2015, they could very well be unprepared to deal with the $10 billion of debt that will be due in 2016. Moody’s senior analyst Scott Van den Bosch writes that “the company’s ability to avoid restructuring will be challenging as debt levels will exceed our expected asset value. The possibility of a restructuring or a distressed exchange remains high…in our downside scenario the company is likely to face a restructuring of its balance sheet in excess of $16 billion in debt.” It is possible that Clear Channel will be able to avoid the restructuring, but it is going to “depend on the receptivity of the financial markets and moderate underlying interest rates.” So, in the future, Clear Channel will be very sensitive to changes in the economy.[22]

Contact Clear Channel

Wish to contact Clear Channel Communications?

Web: http://www.clearchannel.com

Mail: 200 E. Basse Rd. San Antonio, TX, 78209.

Phone: (210) – 822 – 2828

Sources

1.http://www.mxdwn.com/wp-content/uploads/2011/11/clear_channel-logo.gif

2.http://www.clearchannel.com/MediaAndEntertainment/

3.http://www.cjr.org/resources/?c=clearchannel

4.http://investing.businessweek.com/research/stocks/people/person.asp?personId=3155827&ticker=CCMO

5.http://www.clearchannel.com/Corporate/PressRelease.aspx?PressReleaseID=1166&p=hidden

6.http://www.radioinfo.com/tag/glassnote-entertainment-group/