Ahhh, Clear Channel. The bane of my mid-1990’s punk rock teenager existence. In my beat up Toyota, all I had was the radio and a broken tape deck, and before the times of satellite radio and iPods, that meant listening to one of the maybe eight stations that I could reliably get, and invariably to Clear Channel. Because the truth was that Clear Channel owns a huge proportion of all of the major radio stations that broadcast in the United States.
This month, Clear Channel announced that the Clear Channel name was no more, that the company would rebrand to IHeartMedia. This is named after its very successful online streaming effort, called IHeartRadio.
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Executives say that the name change is designed to bring their identity more in line with the major contours of their business, which is as an online radio streaming company. IHeartRadio has more than 50 million subscribers.
But there was certainly more than that. As referenced before, Clear Channel was at one point resented for the dominance they exerted over the “national playlist,” the regionally uniform, unchanging tracklist that dominated Top 40 Radio. Indeed, they were Top 40 radio. They were sometimes referred to as “the Microsoft of music,” an insult that had more relevance in that era, to be sure, but still stings. In those days, one could drive from one end of the country to the other, and be sure to hear the same songs despite changing radio stations a dozen times.
Clear Channel’s senior executives had two goals when rebranding to IHeartMedia: firstly, they wanted to finally slough off the last, lingering vestiges of their stodgy past. No more would they be the “Microsoft of Music.” Punk rockers and independents everywhere would be satisfied, or at least fooled.
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They also wanted to show that they weren’t some vast multimedia conglomerate, but rather embrace their new identity as a fresh, interesting tech company, specializing in online broadcasting. Indeed, this decision was presaged by an earlier removal of the word “Radio” from their name.
According to some of their executives, the brand had such a bad perception that it actually prevented them from taking advantages of some opportunities. CEO Robert Pittman said that marketing teams did experiments identifying themselves with both names, and experienced much more willingness to collaborate when they used the IHeartRadio name to identify themselves.
Rebranding, which it’s successful, necessarily needs to be accompanied by a cultural shift. It can’t just be a disguise for an old company to reach a new audience unencumbered by old perceptions. It needs to be accompanied by a genuine change, otherwise the public will detect the deception and ignore it.
Sometimes, as the Clear Channel/IHeartMedia executives argued, the branding change is necessary to signify a cultural shift that has already occurred. They argued that Clear Channel had grown so much since the launch of IHeartRadio about three years ago, that it no longer made sense to keep the old name. They argued that the company was revitalized and reinvented by the online sector, and now was more of an online company than a radio broadcasting company.
Rebranding is a risky strategy that can potentially result in big payoffs. However it can also be seen as the last salvo of a dying brand, a final hail mary that ultimately fails. It’s too early to see what IHeartMedia’s fate will be.
Russel Cooke is a business writer and consultant who recently relocated to Los Angeles, CA. Follow him on Twitter @RusselCooke2.
