Data Plans will Likely Put a Damper on Clear Channel Dreams of Mobil Domination.

Moses Avalon

If video killed the radio star will smart phones revive him?

Announcements from Clear Channel this week force artists and their teams to seriously evaluate the position that mobile content will play in their ability to expand a fan base.

Clear Channel celebrated with a press release, indicating that they had almost completely sold out their advertising lots for mobile radio commercial spots, ending a long dry spell for radio advertising sales.

The significance for this is the fact that these sales are based on the perception that mobile radio is where tomorrow’s radio listener will be pointing ears for music consumption.  Evan Harrison, a Clear Channel president charged with the duties of creating a unique on-line music experience was quoted as saying, “Mobile is a strategic necessity for us.”

Record labels and publishers have been salivating over this development because mobile radio offers something that terrestrial radio never could– instant sales. In mobile radio there is a “buy button” ever present.  When a listener hears something he likes, he can download it. Boom! – instant sale and instant buyer data.  It is a dream come true for music sellers.

And a nice dream it is, but is it a sound one?  Can mobile radio revive music sales and the radio star?


Here’s what’s going through the minds of Clear Channel’s digital execs, Pandora and other mobile music services that mimic the old style radio format (which on artist and songwriter royalty statements is called, “non-Interactive streaming.”):

According to Forrester Research, a market research firm, the amount of time consumers listen to mobile radio is rising staggeringly. The firm claims the average user tuned in to Clear Channel’s iheartradio App for 137 minutes a week in July.  This is up from 120 minutes at the end of 2009. Conversely, the amount of time consumers spend listening to traditional radio has decreased four hours a week from its 2005 benchmark of 10 hours.

“There’s a tremendous amount of interest” says David Goodman, president of CBS Interactive Music Group, which powers radio apps for AOL, Yahoo!, and Last.fm.

It seems obvious from all this optimism that artists should begin doing DJ booth tours for mobile radio stations. (Except, there are no DJs in mobile radio.  Computers make the playlist based on users’ listening habits.  And there are no “stations” because it’s all done on a massive server.)

So… mobile good, right?  Not so fast.


Mobile is just another sales avenue, but nothing special. At least not yet.

The problem with all this hyperactive hype that research firms are famous for is that it often doesn’t take into consideration how much new things cost the consumer.  These conclusions regarding mobile are no exception.

The big problem with the theory of more listener hours = more interest is that these stats were gathered over 2008-2009 when people had unlimited data plans.  That perk ended last month (June 2010) when AT&T announced the end to such indulgences.   Customers are now charged for all data they consume.

This sets a barrier to how high the number of hours the average listener can tune into mobile radio.  Most people who use smart phones for data uploads and have a plan of $15 a month.  This allows them about 250 megabytes, or roughly 2 hours of streamed audio content.  This will not be satisfactory to those users who also need to save some data for useless things like email, downloads, Apps, movies and of course, porn.

Even those with deluxe plans of $50 will not be listening more than a few hours a month. The likelihood is that they don’t have that big data plan because they really, really love streamed music.  They have it for uploading large files they create for  work to FTP servers.

But terrestrial radio is still FREE.

So, raise your hands, who will pay $15-$25 a month just to listen to Clear Channel or Spotify when they can hear the same playlist for free in your car?  I’ll save you some market research fees fellas:  no one.

For mobile radio to recapture the glory days of regular radio, AT&T and Verizon will have to sell a truck-load more smart phones and will have to give away unlimited data plans for quite some time.  Or they could  put mobile radio in cars and bundle the data plans so the consumer doesn’t feel the pinch.

Could it happen?  Maybe.  So far, Clear Channel has not announced plans for anything like this and the trend seems to be going in the opposite way — in the near future we’ll be paying more for large data plans, not less.  So, I’m not holding my breath that this will restore music sales or the radio star to the days of wine and roses.

Your thoughts and suggestions for Clear Channel?


  1. Jimi says:

    As we’ve talked about before, the music should be “free” & the artists should be paid by sponsor/ad revenues. Unlike terrestrial radio, streams can also include visual data, so a listener will have to watch the ads roll by while the music plays, & spam gets uploaded in the stream as well. Sponsor tags can also be uploaded in the stream, so whenever the mobile is used for anything, a quick ad shot will pop up.
    Of course, the station subscriber will have to approve this to get the free stream.
    It could even be imbedded advertising just like product placement in TV. The Rap/Hiphop community already is doing this.
    Imagine if GM paid out every time “Chevy” is used in a song.
    Streamin’ bux “my Lord on a flatbed Ford”.
    This way, the music is affordable to the end user, the artists get paid & life is wonderful.

    As if.

  2. RE: the new requirements major publishers are looking at to consider signing a songwriter, the jaded musician in me says, “What did you expect?”

    Once artists started signing 360-deals with large corporations, it’s easy to see how pubs felt like joining in the mix.

    For me, if I was an emerging artist, this trend would make me want to do it all myself and when I couldn’t cover the bases adequately, I’d seek out some of the few true independent people working in the various sectors needed.

    The one “upside” to the major label system reconfiguring itself is that they are plenty of entrepreneurially minded, talented and (this is the important part!) *experienced” professionals out there available to consult or represent young talent.

    That’s my four cents for today, Mo!


  3. Sara says:

    You’d a thought that by now the folks that run corporates would have worked out that just because it can be done doesn’t mean it will be done. Don’t people remember laserdisc, WAP and the internet fridge? We were told how amazing these would be and that EVERYONE would be using them. Errr. no. Technology is all well and good, but consumers aren’t stupid and won’t use it unless they can see how it fits into their lives. Rational reasons and emotional reasons will prevail as they always do and using it because it’s been invented doesn’t even compute.

  4. John McKechnie says:

    Change to a Samsung or LG. They include an FM radio with RDS. Or better still look on Ebay for an old Sony Walkman. I’m sure Sony will revamp a new one if the market warrants.

  5. Christopher P Adamantidis says:

    Hello Music Biz & Show Biz
    Have Dream In Become A THE RADIO STAR
    ASCAP Member & Founder & CEO Of Cham Patrick Music Group
    I Also A Music Producer & Songwriter & Recording Artist Also Trying Make Onw
    major label Ben Trying Music On Fucking FM radio World Wide & major label
    I Start in 2007 Help Me Or War With Me

  6. Paul Cooke says:

    This is complete red herring, the fact that mobile radio cna make sales? I recall taking my son on a trip and he had his iphone in the car. I wanted him to hear one of our artists so we found the track on the net and played it in the car, we jacked it into the stereo. So it was streaming through his phone into the car. Any purchase option would be at the point of sale eg: Itunes if he wanted to buy it. I listen to mobile radio on my mobile – walkman. But its just radio, even if the station had a graphic with buy why would I when i can source the track on itunes from my phone? Isnt the web mobile radio anyway’?

  7. slim says:

    The only thing that hacks me off about internet radio like iheart, last.fm, etc is that it’s a goddamn clusterfuck that new artists have to wade through.

    My band has a name that is shared with some idiot rapper in Africa, a band that no longer exists, and some pop singer in the UK.

    Somehow, on all these sites, we’re forced to share the same page. In some cases, our music doesn’t show up. So you look at the page, it’s got our picture, the genre is rap, and these silly pop songs are listed.

    We’ve got the copyright/trademark, but legal doesn’t respond cause they know the last thing our broke-asses are gonna do is start suing radio. It’s a mess.

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