[IRCA] Clear Channel article

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The radio industry keeps losing people like Danny C. Costa, a senior at Boston University who grew up listening to radio in New York and New Jersey.
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Tuning Out 
 
For the last few years, Mr. Costa has tuned out radio in favor of Web sites where he can get access to downloads or videos he heard about from friends. He prefers these to the drumbeat of the Top 40. He burns his favorite songs onto CD?s or copies them onto his iPod. 
?I just sort of stopped listening to radio, because I had access to all this music online,? Mr. Costa said.
While more than 9 out of 10 Americans still listen to traditional radio each week, they are listening less. And the industry is having to confront many challenges like those that have enticed Mr. Costa, including streaming audio, podcasting, iPods and Howard Stern on satellite radio. 
As a result, the prospects of radio companies have dimmed significantly since the late 1990?s, when broadcast barons were tripping over themselves to buy more stations. Radio revenue growth has stagnated and the number of listeners is dropping. The amount of time people tune into radio over the course of a week has fallen by 14 percent over the last decade, according to Arbitron ratings. 
Over the last three years, the stocks of the five largest publicly traded radio companies are down between 30 percent and 60 percent as investors wonder when the industry will bottom out. 
Now, radio?s woes have spurred a new wave of deal making.
Clear Channel Communications, the nation?s largest radio operator, is now considering selling some of its 1,200 stations in smaller markets after years of acquiring everything in sight, according to industry analysts. The Corporation">CBS Corporation did the same thing recently and now says it is looking at further station sales. The Walt Disney Company struck a deal this summer to get out of the radio business altogether, and in May, Susquehanna Broadcasting, the nation?s largest privately held radio group, was sold to another broadcaster.
But rewriting the ownership map is just part of radio?s scramble to find a new groove. In the last year, the industry has moved into overdrive by increasing experimentation with new formats and starting digital initiatives like HD Radio ? a nascent format that will allow listeners with special tuners to hear more specialized channels. Radio companies are moving fast into Web businesses that incorporate video and other features that could not have been imagined when commercial radio first appeared nearly nine decades ago. 
?It?s not a debate any more that radio is a structurally declining sector,? said Michael Nathanson, media analyst at Sanford C. Bernstein & Company. ?What you?re starting to see are strategic changes in operating models to address the sluggishness of growth.?
What has set radio apart from other challenged media businesses ? like video rentals, magazines, television stations and newspapers ? was the swiftness of its fall from grace on Wall Street. 
A possible reason is that unlike other media businesses, radio appears to have come late to the game of focusing on viable online business models. Although digital revenues are growing fast, they accounted for only $87 million of the industry?s $20 billion in 2005 revenues, according to Veronis Suhler Stevenson Communications.
It is not just students in their dorms who are spending their listening time elsewhere. 
Larry R. Glassman, a surgeon who does lung transplants and commutes between Cold Spring Harbor and Manhasset, N.Y., each day, used to tune into radio for his 40-minute drive, particularly to hear his classic rock favorites. 
But now he subscribes to XM Radio, and recently had an XM receiver installed in a new boat. ?Some of the programming I just flip over,? he said, adding that he would listen to XM in surgery if he could. Instead, ?I use the iPod in the operating room.?
Mr. Glassman, who is 51, said he turned a deaf ear to radio primarily because of the advertising and because he finds the playlists of his favorite stations too mainstream and limited. 
Broadcast radio advertising over all was up 0.3 percent in 2005, lagging in growth in comparison with the gross domestic product for the third consecutive year. It will continue to lag economic growth for the next five years, according to Veronis Suhler. (Only the newspaper industry gets a slower top-line growth prognosis.)
Radio?s digital efforts come as the nation?s two satellite radio companies ? XM and Sirius ? have amassed more than 11 million subscribers drawn to the services? marquee names, led by Mr. Stern and various sports leagues, niche programming, sound quality and fewer or no advertisements. Still, some broadcasters argue that satellite has grabbed an unfair share of buzz given that its audience subscribers pale beside the roughly 230 million Americans who listen to old-fashioned free radio. 
?As an industry, we?ve lost the hipness battle,? said Jeffrey H. Smulyan, the chief executive of Emmis Broadcasting. ?Like a lot in life, it may be more perception than reality.? (Mr. Smulyan tried to take his company private earlier this summer in the face of its sagging stock price, down more than 40 percent since 2003.)
But the radio companies are looking to fight back with innovations of their own.
Clear Channel, for instance, signed a deal with BMW earlier this month to provide real-time free traffic updates to navigation systems in the automaker?s new models. The company announced another deal to beam its radio signals to Cingular wireless phone users, offering them streaming and on-demand content as well.

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