iHeartRadio Enters The On-Demand Streaming Fray

By on Sep, 23 2016 with Comments 2

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LAS VEGAS, NEV.  – Sept. 23, 2016 — The nation’s biggest AM and FM radio station owner has trumped Pandora Media by entering the subscription-based on-demand audio streaming services business, and by providing a definitive launch date for its two forthcoming products.

Starting in January 2017, iHeart Media will offer a pair of on-demand music services, on a tiered pricing platform.

Details regarding pricing and how the two services will be integrated into the current iHeartRadio app were not revealed by the company, which made the announcement at the iHeartRadio Music Festival in Las Vegas. A company spokesperson tells RBR + TVBR that an announcement regarding the full set of features and functionality will be released “as we get closer to launch.”

However, it’s exactly what Pandora has been boasting about since August, but has yet to bring to market despite its recently forged music group digital licensing deals, which were needed to move forward with the much ballyhooed launch into a business dominated by the likes of Spotify.

The new services from iHeart, dubbed “iHeartRadio Plus” and “iHeartRadio All Access,” allow the company’s iHeartRadio app to expand beyond live streams of its own radio stations and that of its partners, in addition to its custom radio formats available through the app.

Unlike Spotify, Tidal, Apple Music or any other service, iHeart is allowing for “on-demand functionality to live radio.”

Really like a song playing on KIIS-FM, or any other station on the iHeart platform? iHeartRadio app users can now instantly replay a song, and save it directly to a playlist. There is also unlimited skips.

“While research shows that more than 90 percent of listeners say they listen to both FM radio and music collections, but at different times, for different reasons, this marks the first time ever that on demand functionality will be used to improve the radio experience, unlike current services which can only approach on demand through a music collection offering,” iHeart said in a prepared statement released Friday morning.

Darren Davis, who serves as President of iHeartRadio, noted, “We’re making it easier than ever for iHeartRadio users to think of music discovery and collecting in a brand new and easy-to-use way. We are reimagining radio — with the new technologies and offerings powered by our on-demand options, music discovery, music collecting and the power of community and companionship fostered by live radio and influential and trusted personalities. There’s no other digital music service that can do this.”

Bob Pittman, Chairman/CEO of iHeartMedia, added, “While other streaming services have taken a music collection approach to digital streaming, no one has yet built a service incorporating on demand technology with real live radio– and at a scale that only iHeartMedia can, with its reach of over a quarter of a billion people every month. It’s a monumental shift for the industry as we lead the way into a new era of interactive radio.”

Speaking of “iHeartRadio Plus,” the design is such that the company believes it will serve as an addition to other on-demand services and not as a replacement.

LICENSING AGREEMENTS SET FOR SERVICES

To bring the two tiered-subscription services to market, iHeartRadio reached license agreements with Warner Music Group, Sony Music Group and Universal Music Group, and in addition has signed agreements with independent record labels and distributors including The Orchard, Entertainment One, INgrooves, DashGo, Naxos and CD Baby.

Sir Lucian Grainge, Chairman/CEO of Universal Music Group, said, “We’re glad to build upon our relationship with iHeart, which under Bob’s leadership continues to innovate the radio experience by adding distinct features and services and attract a broad audience that remains deeply passionate about music.”

Doug Morris, CEO of Sony Music Entertainment, added that this deal “further expands our long-running successful relationship, and creates promising new commercial opportunities to engage with the millions of music fans who listen to iHeart every day. We look forward to working with them to develop premium music solutions for radio users.”

Steve Cooper, CEO of Warner Music Group, chimed in by saying, “These new services will open up the choice of experiences that iHeart offers music fans, while providing our artists and songwriters with a wider range of commercial and marketing opportunities.”

iHeartRadio was introduced at the inaugural iHeartRadio Music Festival in 2011 as a free service that offers listeners thousands of live radio stations, personalized custom artist stations, and the top podcasts and personalities.

iHeartRadio recently announced it has surpassed 90 million registered users; the iHeartRadio app has also been downloaded more than a billion times.

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

  1. Scott Gilbert Says:

    Here comes step three in iHeart’s long range plan (I’m certain) of getting out of radio. Step one was removing the word “Radio” from the company name. Step two was selling off most of their physical assets, like towers and buildings.

    • I whole”heart”edly disagree, Scott. This is a brilliant move for a financially distressed media company that has invested heavily in its core talent and technology. Complain all you want about iHeart and how it is overleveraged, but they’ve hit a home run just as Lew Dickey Jr. gets the New York Post to write an article about his new book, which says radio’s business model is unsustainable given the proliferation of subscription-based services in the marketplace. Yeah, Lew: iHeart just schooled you and your Rdio effort. There is a reason why Scott Shannon played “Backstabbers” by the O’Jays during the first hour of his first shift at WCBS-FM after “retiring” from your WPLJ, Lew. And, it’s interesting that you will largely decide whether Cumulus’ 1-for-8 reverse stock split is a go, even after you were replaced by Mary Berner. Of the two giants in the radio industry, both over-leveraged and over-focused by the investment community as why “radio is a bad choice for our dollars,” iHeart has a good game plan. Where’s Cumulus? Mary is slowing turning the Titanic away from the iceberg Lew brought it so perilously close to.