Clear Channel’s Pittman: iHeartRadio app is not about Pandora, kinda

September 13, 2011

When Pandora shares took a dive last week several people pointed out that its dip came soon after the number one U.S. radio company Clear Channel Inc launched a customized radio application announced with a press release which didn’t shy away from drawing comparisons with Pandora.

Of course those comparisons essentially said “look our service is waaay better  than Pandora” and Clear Channel’s chairman of media and entertainment platforms Bob Pittman, couldn’t help but damn Pandora with faint praise in our interview.

Here are highlights of our chat with Pittman, a well -known AOL and MTV alum. (By the way, Pandora shares were back up 5 percent on Tuesday morning to $10.38).

MediaFile: You already had streaming radio stations, wasn’t that enough?

Bob Pittman: We’ve seen an opportunity to create what Pandora has called ‘custom radio’ probably more accurate to call it a playlist creator because there’s no personalities, no services like radio. But since they described it as custom radio they gave us brand permission to come in and add it as a feature to our service.

Mediafile: Why is your custom radio any different or better than Pandora?

BP: We had the benefit of watching Pandora trying to build a business, certainly they built a nice feature whether it’s a business or not I’ll let everybody else debate. We thought what else can we do to the experience to make it fit better with radio, so we have a slide feature with a range of songs from familiar to discovery with ten times the number of songs Pandora has for example. We have ongoing music research, that we spend millions of dollars for every year, checking what’s hot, what’s moving on, what clusters together. And we’ve written our own algorithms in addition to using some outsourced algorithms.

MediaFile: You’re not running commercials on the custom stations till the end of this year, why?

BP: “We’re old fashioned we think the way you really build a business is you build a product that consumers really love then you figure out how you make money out of it. I think we want consumers to have a good trial period of it as pure as can be. What I know we’re not going to do is when we do run commercials is run the same commercial everything 30 minutes and drive you nuts no matter how targeted that is there has to be a limit. What we’re not going to do for the advertisers is turn the volume down to half volume so you don’t quite hear the commercial. We’re going to find an experience that works for  both the advertiser so they’re getting their money’s worth as well as for the consumer so it’s a good experience.

MediaFile: You mention Pandora a couple of times in the release and also in our conversation, is it possible Clear Channel feels threatened by such a small company?

BP: It’s a point of reference. Pandora has been a leader in custom-radio creation, I think we looked at that. The good thing about being a company like ours is we can watch everything going on in the market place and if you see something beginning to bubble a little bit you can say ‘Wow, consumers like it’. Whether it’s a business or not other people will decide but I think it’s certainly a worthwhile feature and therefore we invested money in creating one for our consumers. Certainly they’re not a competitor of ours  we overlap in a tiny part of our business. And by the way we’re very respectful, they created a nice feature and a nice product so hats off to them.


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