Bob Chaundy BBC News Profiles Unit

The company contracted to manage, for free, the Live 8 concert in Hyde Park this weekend is the entertainment arm of the American media giant, Clear Channel. The firm is little known in the UK, whereas at home it is a household name.

If you attended the recent U2 concert at Twickenham, the Guys and Dolls musical in the West End or have been to any of the Apollo music venues, you will have entered into its empire.

Stand in a bus queue and the advertising poster you see is likely hosted by Clear Channel. Even your local public toilet could be one of theirs.

Last year, the company grossed more than $9bn, $3.7bn of which came from its commercial radio operations, $2.4bn from outdoor billboard advertising and $2.7bn from its live entertainment division. Less than a decade ago, it was but a small San Antonio-based radio chain with 36 stations.

Then, in 1996, radio was deregulated in the United States, and the company, under its astute billionaire owner L Lowry Mays, went on a massive spending spree.

He bought radio stations in every US state, developed an outdoor advertising empire, signed up some 700 recording artists/celebrities when he acquired the SFX agency, purchased concert venues and formed a division to promote live entertainment.

Britney Spears - radio play did not alter

Today, Clear Channel owns 1,225 US radio stations, around 10% of the nation's total. It also has some 38 television stations. Abroad, it owns radio stations in Australia, New Zealand and Mexico.

But Clear Channel's gung-ho commercialism - Mays once described radio as there simply "to assemble ears for advertisers" - has provoked fierce criticism.

But stars are said to have complained that Clear Channel stations were refusing to play their songs because they had declined to hire the company as their tour promoter.

'Generic junk'

Similarly, in 2003, rock singer Don Henley told a Senate committee hearing that performers were being pressured to play Clear Channel-owned concert venues for fear of Clear Channel radio stations not playing their records.

The company denies the claims, saying there is no connection between what gets played on the radio and artists' choices of concert promotion or venues.

It points to the fact its stations have been responsible for about a third of Britney Spears' airplay in the US, even though she chose a tour promoter other than Clear Channel.

Another complaint against the company is that it has created a bland effect on American radio both through its homogenous playlists and such devices as voice-tracking.

Voice-tracking involves using segments of speech, music and commercials which can be sent digitally from one Clear Channel network to another. These are then cut and pasted giving the impression that, for example, a DJ is taking a live request or is doing an interview when, in fact, he or she is not.

One critic summarised the opposition to this practice with the words "spoon-fed generic junk".

Clear Channel backs musicals like Guys and Dolls

Clear Channel argues that, by doing this, it can deliver national DJ talent to local markets that couldn't otherwise afford it. It also cuts costs through economies of scale. It also says voice tracking is widely used across the radio industry and it accounts for a very small percentage of radio time among its stations.

Recently, Clear Channel has run into choppy commercial waters. The lower profit margin of its entertainment division as against its radio and outdoor arms, has had a detrimental effect on the company's stock price.

It also made the company vulnerable when, as happened, there was an advertising slump.

In April this year, it announced a 59% drop in net income in the first quarter. As a result, in a drastic move, Clear Channel has decided to split off its outdoor and entertainment divisions from its broadcast holdings as of next year.

More for less

It will maintain a 90% controlling interest in the outdoor company but will shed its ownership interest in the entertainment division.

This will free the company from the complaints of monopolistic behaviour between the radio and entertainment arms.

"Although these decisions are commercially driven, Clear Channel has finally realised that quality is important," says media commentator Ray Snoddy. "For example, it has decreased the number and length of advertisements on its radio channels to show it is sensitive to criticism."

As yet, this "less is more" policy has failed to staunch fall in listeners. These people are more and more turning to satellite radio stations, mobile phone makers and online music programming which offer a much wider selection of audible fare.

The new "musical poster" in a London bus shelter

Technological advances mean that a large company like Motorola is now testing a service called iRadio that will enable users to download MP3s from internet stations to a mobile phone and, from there, beam it to a car stereo.

In response, Clear Channel and other terrestrial-radio companies are upgrading their FM stations to split their signals into multiple, digital streams, to cater for niche markets. They also plan to offer content via mobile phones.

"There has been a meltdown in the radio economic model," says Theresa Wise, media analyst with Accenture. "There are now so many ways to string together what you want to listen to."

Clear Channel's traditional hegemony may, as a result, be under threat in its homeland, and it will be a measure of its strength to see how it adapts to changing times.

In the UK, it has so far declined to snap up radio stations because it believes they are overvalued. Its future here is likely to remain chiefly in its outdoor advertising, and its latest innovation is the Star Wars poster, complete with sound and movement, showing at a bus shelter near you now.