Clear Channel Radio Moves Video and Music Online

The online music & radio unit of Clear Channel Communications Inc. plans to launch Tuesday a test version of a video-on -demand service for 16 of its radio-station Web sites in New York, Los Angeles, Boston, Washington, D.C. and St. Louis.

The service will provide access to thousands of music videos from Universal Music Group, Warner Music Group, EMI Music and other labels. Local radio stations will have the option to customize site features. There are plans to expand the platform over the Clear Channel network throughout the United States. Clear Channel also has plans to launch a digital download service to complement its new music purchase service through Amazon.com, said Michelle Radvansky, spokeswoman for the company. No other information on the service or timing was provided.

The Video on Demand service aims to create an "interactive experience for listeners," Clear Channel said in a statement. Features, such as Video Challenge, where listeners can vote for there favorite artist video are available. The service also includes a "Share Video" feature that will let listeners share the video link with others, and a "Buy CD" link operated by Amazon.com Inc. that enables the purchase of the music being played in the video.

But considering Clear Channel's relationship with music labels, its not entirely obvious what's behind the decision to offer a click-through to Amazon for music rather than a digital music download service such as Napster, iTunes, Yahoo, Connect, or Rhapsody. "I believe downloading digital files could cannibalize their business much more so than sending them to buy the CD from Amazon," said David Bank, managing director at analyst firm RBC Capital Markets. "Basically by offering digital music downloading capabilities you're saying listen to an iPod."

The idea behind Clear Channel's new service is to bring the radio-listening audience to the Internet where more companies are choosing to put their advertising dollars. Clear Channel said it will let advertisers purchase 15 video advertisements to play prior to the music videos.Clear Channel video and music site also is meant to compete with PDA services XM Satellite Radio and Sirus Satellite Radio, which are beginning to partner with device manufacturers for music downloads. XM Satellite Radio cut a deal to let people buy tracks from Napster with a new service called XM + Napster. The service is available from a new device Samsung previewed at the International Consumer Electronics Show last week in Las Vegas.

XM Satellite Radio and Samsung introduced three portable audio models that combine content and capabilities of XM radio and MP3 player. The Samsung XM players offer satellite radio and MP3 music. The Samsung Helix XM2go player, available in the first quarter of 2006, offers live XM radio and stores MP3s, WMA files, and XM content for playback anywhere, anytime. Helix also lets users "bookmark" songs heard on XM for online purchase from the XM + Napster service.

"We've seen initiatives by many of the radio broadcast companies and it's a fairly obvious move for all to shift to an online business," Bank said. "The next logical group, which is pretty well already involved with the Internet, is Viacom radio."