Google vs. Facebook & Clear Channel vs. Pandora

An internet start-up gets so wildly popular that it becomes almost synonymous with the business category it helped to create.  It’s such a success story that a major conglomerate decides to compete with it in a major way.

This is both the story of Facebook and Google, and also Pandora and Clear Channel.

THE SOCIAL MEDIA BATTLE

Google has introduced Google+, pronounced “Google Plus.”  I’ve been playing around with it.  So far, I’m underwhelmed.

Much of it is very reminiscent of Facebook.  Except … almost nobody’s there.  So the vibe feels like a party with only a few people attending, and you know how uncomfortable that is.  Now, the big leader in a product category seldom gets lots of hot, fawning coverage.  It’s when someone threatens to upend the status quo that journalists and early converters get excited.  Much of what’s being written about Google+ seems to be more about how cool it would be to watch Google and Facebook fight, rather than about what’s actually at Google+.

By the way, if you’re not on Google+ but want an invitation, email me.  I need your email address so Google can sign you up.

If you talk with average people, what they’ll say about Facebook has nothing to do with features or special pages or other product-oriented stuff.  They’ll talk about the old friends they’ve reconnected with.  They’ll talk about how much time they waste interacting with friends.  In short, they see Facebook as the major example of social media, and they think, “This social stuff is really cool.”

Meanwhile, Google seems to be focused on the media part of social media, instead of the social part.   Google has moved into different branded territories with great products … search, email, AdWords, Picasa, documents, toolbar, and so on.  They can try and integrate Google+ with their new +1 feature in search, but it’s not going to move people from Facebook to Google+.  Facebook really has rewritten the rules about online interaction, and Google+’s list of features is unlikely to change that much.

Google’s best scenario is what we radio folks have seen with head-to-head format competitions.  One station flips format to directly challenge a market leader.  The newcomer may shave a share or two from the leader, but if the leader reacts correctly, they’ll often return quickly to a position of dominance.  Meanwhile, the challenger struggles to find the perceptual territory they can exist in, long-term, that’s not “Just Like The Leader, Only Different In Ways You Can’t Tell.”

Fundamentally, I don’t see how Google+ adds enough people fast enough to make it feel as much fun as Facebook.  Most people will click on it, and … cool features notwithstanding … feel like it’s sort of a thin version of Facebook, and that will kill their repeat visits.

THE ONLINE RADIO BATTLE

Today, Clear Channel relaunched iHeartRadio, with a huge concert announcement.  IHeartRadio currently offers streams of Clear Channel’s terrestrial radio brands, along with a number of custom stations.  They’ll soon be offering Pandora-like custom stations, too.

Some of the radio news websites this morning had fawning articles extolling the greatness of Clear Channel, but this article contains some interesting quotes from Bob Pittman, who is Clear Channel’s chairman of media and entertainment platforms.  Basically, he says if having Pandora-like choice helps grow their iHeartRadio app, that’s a win for them.  That could mean Clear Channel could feel good about better iHeartRadio numbers without affecting Pandora significantly.  This is not a zero-sum game … iHeartRadio growth does not have to come at Pandora’s expense.  That growth might come from people not doing much listening now; it might come from the increase in smartphone users; it might come from current station stream users logging on to iHeartRadio for more choice.  You usually don’t see big, top-of-the-category brands like Pandora collapse from someone else covering what they do, and more.  That’s not a focused message that easily enters consumers’ minds.

This battle has the feel of early online retailing, when focused and single-minded Amazon got such an amazing perceptual foothold, and major brick-and-mortar retailers tried to compete by being broad and unfocused.

Pandora, to their credit, has flanked traditional radio with music choice.   Radio counters that Pandora is just a juke box.  You know what?  That’s undoubtedly true.  That’s what some listeners want.  Pandora has been pretty successful gathering listeners, but they’re also probably distracted right now with their recent IPO.  It was not exactly an unparalleled success.

Still, what’s been holding iHeartRadio back?  Is it that so many Pandora listeners would have been listening to Clear Channel streams, except they had to move to from one app to another … or one website to another?  That’s probably not it.  Pandora has been very successful, but it’s not like we’ve tapped out on the potential number of people who might listen to music online.  I don’t believe that Clear Channel is competing with Pandora.  They’re competing with other radio companies, who have been promoting and (sometimes) packaging their streams in different ways.  If anything, Clear Channel has done more to create a new online destination for music listening than any other radio group.  That’s how this will play out, with iHeartRadio taking more of a share of listening to commercial radio streams, rather than seriously competing with Pandora.

Chris Miller 

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