iHeartMedia 2012 Annual Report Download - page 20

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adopt legislation that would impose an obligation upon all U.S. broadcasters to pay performing artists a royalty for the on-air
broadcast of their sound recordings (this would be in addition to payments already made by broadcasters to owners of musical work
rights, such as songwriters, composers and publishers). We cannot predict whether this or other legislation affecting our media and
entertainment business will be adopted. Such legislation could have a material impact on our operations and financial results. Finally,
various regulatory matters relating to our media and entertainment business are now, or may become, the subject of court litigation,
and we cannot predict the outcome of any such litigation or its impact on our business.
Regulations and consumer concerns regarding privacy and data protection, or any failure to comply with these regulations, could
hinder our operations
We collect and utilize demographic and other information, including personally identifiable information, from and about our
listeners, consumers, business partners and advertisers as they interact with us. For example: (1) our broadcast radio station websites
and our iHeartRadio digital platform collect personal information as users register for our services, fill out their listener profiles, post
comments, use our social networking features, participate in polls and contests and sign-up to receive email newsletters; (2) we use
tracking technologies, such as “cookies,” to manage and track our listeners’ interactions with us so that we can deliver relevant music
content and advertising; and (3) we collect credit card or debit card information from consumers, business partners and advertisers
who use our services.
We are subject to numerous federal, state and foreign laws and regulations relating to consumer protection, information
security, data protection and privacy, among other things. Many of these laws are still evolving, new laws may be enacted and any of
these laws could be amended or interpreted in ways that could harm our business. In addition, changes in consumer expectations and
demands regarding privacy and data protection could restrict our ability to collect, use, disclose and derive economic value from
demographic and other information related to our listeners, consumers, business partners and advertisers. Such restrictions could limit
our ability to provide customized music content to our listeners, interact directly with our listeners and consumers and offer targeted
advertising opportunities to our business partners and advertisers. Although we have implemented policies and procedures designed
to comply with these laws and regulations, any failure or perceived failure by us to comply with our policies or applicable regulatory
requirements related to consumer protection, information security, data protection and privacy could result in a loss of confidence in
us, damage to our brands, the loss of listeners, consumers, business partners and advertisers, as well as proceedings against us by
governmental authorities or others, which could hinder our operations and adversely affect our business.
If our security measures are breached, we may face liability and public perception of our services could be diminished, which
would negatively impact our ability to attract listeners, business partners and advertisers
Although we have implemented physical and electronic security measures to protect against the loss, misuse and alteration of
our websites, digital assets and proprietary business information as well as listener, consumer, business partner and advertiser
personally identifiable information, no security measures are perfect and impenetrable and we may be unable to anticipate or prevent
unauthorized access. A security breach could occur due to the actions of outside parties, employee error, malfeasance or a
combination of these or other actions. If an actual or perceived breach of our security occurs, we could lose competitively sensitive
business information or suffer disruptions to our business operations. In addition, the public perception of the effectiveness of our
security measures or services could be harmed, we could lose listeners, consumers, business partners and advertisers and we could
suffer financial exposure in connection with remediation efforts, investigations and legal proceedings and changes in our security and
system protection measures.
Government regulation of outdoor advertising may restrict our outdoor advertising operations
U.S. federal, state and local regulations have a significant impact on the outdoor advertising industry and our business. One
of the seminal laws is the HBA, which regulates outdoor advertising on Federal-Aid Primary, Interstate and National Highway
Systems’ roads in the United States. The HBA regulates the size and location of billboards, mandates a state compliance program,
requires the development of state standards, promotes the expeditious removal of illegal signs and requires just compensation for
takings. Construction, repair, maintenance, lighting, upgrading, height, size, spacing, the location and permitting of billboards and the
use of new technologies for changing displays, such as digital displays, are regulated by federal, state and local governments. From
time to time, states and municipalities have prohibited or significantly limited the construction of new outdoor advertising structures.
Changes in laws and regulations affecting outdoor advertising, or changes in the interpretation of those laws and regulations, at any
level of government, including the foreign jurisdictions in which we operate, could have a significant financial impact on us by
requiring us to make significant expenditures or otherwise limiting or restricting some of our operations. Due to such regulations, it
has become increasingly difficult to develop new outdoor advertising locations.
From time to time, certain state and local governments and third parties have attempted to force the removal of our displays