Clear Channel (CCU), the over-the-air radio giant, will begin offering a service that allows cellphone users to text song requests to radio stations. According to The Wall Street Journal: "Listeners also will be able to use their phones to check lists of the last 10 songs aired on the station, find out what songs are coming up, look at traffic conditions in their area and download graphics and ringtones." The service is free.
The new product is not satellite radio, but it is one more product being offered by a large company in the radio field. And, it is interactive, which satellite radio is not. It also may be a prelude to a service which allows users to text requests to radio stations and actually download songs to their phones.That could cause fits to satellite radio providers. Sirius (SIRI) and XM (XMSR) offer traffic reports, so the new Clear Channel beach head may be getting a little too close for comfort.
Sirius has been making the case that it has many competitors and that a merger with XM would not create a monopoly. The Clear Channel product could actually help Sirius argue that case more forcefully. But, if the merger is not approved, it is also more evidence that satellite radio faces an uncertain future as technology allows other companies to creat similar businesses. And, the Sirius share price is already low.
Douglas A. McIntyre
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