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MAY 1, 2006
From Vanilla To Full Metal Racket Clear Channel is racing into the Digital Age with an array of high-def niche channels Clear Channel Communications (CCU ) was once vilified for almost singlehandedly destroying broadcast radio with its cookie-cutter playlists and barrage of ads. So it may seem a trifle incongruous that the King of Vanilla is rolling out eclectic niche channels with names like Dank ("Hip Hop and Rock all rolled up into one big spliff"), Full Metal Racket ("It's dark, it's edgy, it beats, and it rocks"), and Mother Trucker ("a hearty serving of the best Southern Rock"). Easy listening it isn't, but that's how Clear Channel Inc. wants it these days. And get this: The San Antonio-based broadcaster is set to launch a whole new business helping other radio stations come up with cool programming. Could this be the same company that inspired a Web site called ClearChannelSucks.net? That's right. And it's all part of the rollout of next-generation high-definition radio. HD, as it's known, digitally squeezes more programming into one frequency, boosting sound quality and allowing existing stations to offer side channels tailored to genres or local markets. As part of the new initiative, to be announced on Apr. 24, Clear Channel and other broadcasters will expand their current HD offerings to 50 cities, up from 28 now. With operating earnings essentially flat since 2002, Clear Channel needs to show it has a plan for the Digital Age -- and that includes taking on satellite radio. The broadcaster hopes to have 100 digital channels up by September. Many are already on the Web, and the company is working with Motorola's (MOT ) iRadio to send programming to cell phones. Still, while it's important to deliver radio in as many ways as possible, Clear Channel Radio Chief Executive John Hogan acknowledges that "good programming is the key." MUSIC-NUT OUTREACH That's especially true when HD receivers cost at least $200. So far, Clear Channel's digital offerings have left some industry observers cold. "The programming is not compelling enough yet to get somebody to buy [an HD] receiver," says Robert Unmacht, a partner with media consultancy IM3 Partners. Clear Channel hopes to differentiate itself from XM Satellite Radio Holdings Inc. (XMSR ) and Sirius Satellite Radio Inc. (SIRI ), which offer the same channels nationwide, by coming up with content tailored for local audiences. Besides using its in-house programmers, the broadcaster is reaching out to regular folks who are nuts about music. One is Bobby Leach, a Clear Channel IT guy who happens to love bluegrass; he'll program Americana NewGrass. Another is Ben Sanders, a Vermont auditor by day who hosts a public radio show on Monday nights. He is programming The Blues Channel. "I want to develop programs with local blues societies and highlight local musicians," says Sanders. For Clear Channel, the HD initiative offers new ways to make money. For example, when the broadcaster provides programming to other radio companies, it will charge a fee, sell ad time on the channels, or a combination of the two. The broadcaster also will follow its TV counterparts by more seamlessly integrating ads with content, including product placements. Companies might even sponsor entire channels of their own. And Clear Channel is considering selling subscriptions for racier, "blue" programming. "The potential is enormous," says Hogan. Yes, but only if Clear Channel manages to put content on the air that people actually want to listen to.  By Tom Lowry
BW MALL
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