music memo2 _2_.docx - Wikispaces

							TO: Proximity Music Team
FROM: Michelle January
DATE: 9/28/09
SUBJECT: Clear Channel Communications strategy analysis

Here is my strategy analysis for Clear Channel Communications. Clear Channel continues to
dominate the radio and music industry. They will have no problem staying above their
competitors if it continues attract a diverse group of consumers and introduce new services. Gen-
Y users will keep supporting this company as they develop a more digital strategy.

Profile

Clear Channel Communications is the largest pure-play radio station owner and operator. It owns
the largest selection of full power AM, FM, and shortwave radio stations and twelve XM satellite
radio channels. This company was founded in 1972 by Lowry Mays and Red McCombs.
Currently Clear Channel is overseen by its CEO, Mark Mays out of its main headquarters in San
Antonio, Texas.

Clear Channel now reaches more than 154 million people. It has more than 97 million listeners
every week with about 1,200 radio stations in operation. It also has over 240 stations in
Australia, Mexico, and New Zealand. Clear Channel records more than $3 billion in revenues
annually. (Wikipedia, 2009)

Competitive Landscape

Clear Channel owns stations in 247 of the nation’s 250 largest radio markets. Many other
businesses view Clear Channel as a monopoly and having predatory and anticompetitive
business practices. (Lyndall 2004) In 2001 this company was accused of running an “illegal
monopoly that thwarts competition” by an independent concert promoter in Denver. (Boehlert
2001)

Business advertising and consumer demographics drive demand in this industry. The profitability
of individual companies depends on advertisement volume, programming mix, and efficient
operation. The companies that are closest to competing with Clear Channel are Cumulus Media,
Cidadel Broadcasting, and CBS radio. Small companies can also be competitive by the use of
special programming or broadcasters who attract large audiences.

Clear Channels’ Strategy

To stay on top Clear Channel keeps diversity as a primary part of their strategy for competing in
the marketplace. Its top leaders say that their workforce is very creative because of the variety of
personal backgrounds, culture and business prospective that are brought to the table. They draw
upon unique backgrounds and experiences to develop better solutions, faster results, and an
extraordinary vision for the future. (Clear Channel 2009)
Clear Channel also plans on moving to a more digital delivery of music. There strategy is to
stream radio to mobile phones, computers and other devices. Recently they released an online
media player that secures access to about 850 radio stations at IHeartradio.com. (Yao 2009)
Clear Channel also hopes to increase revenue with internet and mobile ads to reach an even
larger audience.

Gen-Y implications

Clear Channel communication controls the majority of the radio industry so Gen-Y consumers
very rarely have never used services that this company provides. This company is able to reach
out and attract a very diverse group of consumers. Clear Channel is continuously researching to
create new products and services to introduce in order to better serve their Gen-Y consumers.
Right now Clear Channel is moving to a more digital strategy to distribute its services. Executive
vice president, Evan Harrison said “Our custom digital programs are connecting consumers to
brands in entirely new ways” to explain the significantly increased levels of consumer
engagement this company along with its partners are receiving. (Clear Channel 2009) I think that
as long as clear channel continues to have innovative ideas they will keep increasing its appeal to
the Gen-Y consumers.

References

Boehlert, Eric. Suit: Clear Channel is an illegal monopoly. (2001, Aug 8). Salon.com. Retrieved
September 25, 2009 from
http://dir.salon.com/story/ent/clear_channel/2001/08/08/antitrust/index.html

Clear Channel. (2009). Corporate. Retrieved September 23, 2009 from
http://www.clearchannel.com/Corporate

Lyndall, Craig. Clear Channel Charged with Crushing Competition. (2004, Apr 20). Blogcritics.org.
Retrieved September 28, 2009 from
http://blogcritics.org/culture/article/clear-channel-charged-with-crushing-competition/

Wikipedia. (2009, September 29). Clear Channel Communications. Retrieved September 29,
2009 from
http://en.wikipedia.org/wiki/Clear_Channel_Communications

Yao, Deborah. Radio Giant Clear Channel Amps up Digital Strategy. (2009, June 8). Abc news.
Retrieved September 29, 2009 from http://abcnews.go.com/Technology/wireStory?id=7782794