Broadcast & Satellite

Clear Channel Buys Thumbplay At Bargain Price

image from www.writeonnewjersey.com Early Monday, news broke that subscription music service Thumbplay is getting sold.

After less than one year in the sector, its burning money and in need of a lifesaver.

Hypebot has since learned that Clear Channel Radio is buying Thumbplay at a bargain price.

And no, it is not entering the subscription sector.

Instead, the company is looking to leverage Thumbplay's technology and staff to build out its existing Web radio service, which places them in competition with Pandora. Clear Channel investor Bob Pittman told Media Memo that it needs to get ahead of the digital curve and not behind it. Buying Thumbplay and integrating its technology into their "iheartradio" service is step one. Eventually, Pittman commented, Clear Channel may get into the subscription business, but not now.

This news comes as Pandora nears an IPO and is striving to chop into the in-car market of commercial radio. Apparently, Clear Channel has been watching Pandora closely; it will use its "25 million monthly uniques" to complete with them. Pitman remarks, "Pandora is a great feature rather than a business."

Commentary

Prepare for an all-out war. Unfortunately, even with a $100M IPO, Clear Channel still has the power to out-market and spend Pandora at every corner. But, one thing is certain, Pandora is loved. That much can't be said about Clear Channel.

The other factor is that Clear Channel will encounter the Hulu problem. If their revamped "iheartradio" app starts to take listeners away from traditional radio, without bringing in the same revenues, it will be tempted to cripple its own future.

If killing off the future of your business is the only way to preserve the future of your business, then, like the major labels, you're screwed. Just because Clear Channel sees the writing on the wall doesn't mean that it won't destroy the wall.

By rule, the company can't make an experience that's better than radio. That would kill radio. Hell will freeze over before it contests its own business model.

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10 Comments

  1. not so fast on the demise of clear channel. maybe they will go down, maybe they won’t – but when making the assessment don’t forget that clear channel still owns all the billboards on the highway and in cities – and IRL advertising venues at bus stops. The music business takes place offline, too. *and* it happens all over the world, whereas pandora only works in the usa. Also remember that pandora generated love based on a lucky political play. You only get that chance once. And nobody knows washington better than Clear Channel. This will be an interesting year for radio.

  2. might want to catch the first word of this article too, while you’re at it.

  3. It should be noted that “coincidentally” the primary investor in Thumbplay is Bain Capital Ventures. The same Bain Capital Ventures that holds a major stake in Clear Channel. Hmmmmmm.

  4. So Clear Channel may finally enter the music business? As opposed to the advertising industry. Not a big fan of monopolistic conglomerates like them, and definitely not a fan of their harm to the actual art of music, so hopefully this is too little and too late.

  5. If CLear Channel buys Thumbplay, then Thumbplay is pretty much done for and no one I’ve ever known is fond of Clear Channel and the monopoly they exist as. IheartRadio? really? Does anyone know someone who listens to iHeartradio? I surely don’t. Pandora & Grooveshark? yes.

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