iHeartMedia to launch paid music-streaming service

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Thread: iHeartMedia to launch paid music-streaming service

  1. #1

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    iHeartMedia to launch paid music-streaming service

    http://nypost.com/2016/09/20/iheartm...ng-competitor/

    This is to make Iheart more competitive against spotify, pandora and other music on demand services.
    Terrestrial radio giant iHeartMedia will announce this week the launch of a major paid streaming service, The Post has learned.

    The paid streaming service, the first of its kind for a traditional radio outfit, will include a $5-a-month ad-free radio station and a $10-a-month on-demand music service, according to people familiar with iHeartMedia’s plans.

    IHeartMedia Chief Executive Bob Pittman is expected to make the announcement during the company’s music festival in Las Vegas this week, sources said.

    While the service is close to being announced, iHeart must still secure music licenses before it begins.

    The moves come as Pandora recently took the wraps off its $5 service and Amazon is expected to do the same for owners of its Echo device.

    Pittman’s company, however, is planning to build different functionality for its $5-per-month service, including off-line play, sources said.

    By jumping into the paid streaming game, iHeart will get a toehold in the lucrative subscription business and a direct credit card relationship with its listeners.

    Digital music subscriptions rose by 50 percent last year, and paid streaming is set to grow from $2.2 billion in 2015 to $12.7 billion by 2020.

    “It is so clear that digital is everything in radio and in streaming,” said a source familiar with iHeart’s plans.

    The San Antonio, Texas-based company has already built a sizable digital business with its iHeartRadio app that lets consumers stream the company’s 850 radio stations — which is expected to continue when the paid service is introduced.

    The radio giant, however, has been figuring out how to navigate a more mobile digital music world that requires it to pay for a music on less favorable terms than its current terrestrial business, which reeled in $6.24 billion in revenue in 2015.

    The paid streaming service will require new licenses from the major labels, and iHeart is negotiating directly with those, sources said, rather than opting for statutory radio licenses.

    “Radio has underinvested in digital. I’m very impressed with iHeart services, and although they haven’t announced anything in response to Pandora, I’ve got to believe they are feeling the heat of competition, especially in the car, which has been the one area they have enjoyed exclusive positioning,” Larry Miller, a director at NYU’s Steinhardt School of Culture, told The Post.

    The terrestrial radio business has been in turmoil in recent years as streaming services, including Pandora, Spotify and Apple, steal away listeners. IHeart has the additional issue of $21 billion in debt and stagnant revenue over the six months ended June 30.

    IHeart shares have fallen 76 percent over the past year. They closed Monday at $1.22, down 6.2 percent.

  2. #2

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    how long will it be before IHeartRadio tries to put all their FM & AM stations streams behind the pay wall in a way similar to how you have to pay to get local TV stations on Cable & Satellite TV.

    i think IHeartRadio will end up being the first to do this.

  3. #3
    I disagree. I think they'll continue to offer their stations through the iHeart app for free, but will leverage the app to offer a Pandora like streaming service for those willing to pay to avoid ads. It's a logical step. Despite being shackled by serious debt, iHeart has made great strides in expanding and improving their digital platform. I'm fairly impressed with their execution of this.

  4. #4

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    http://mobile.radio-online.com/cgi-b...line_id=n33348

    Here's an update Iheartplus is an on demand service and it requires a subscription fee to join.

  5. #5

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    iHeartRadio has now confirmed they are launching a paid version of their service with unlimited skips on customized stations and on-demand streaming (similar to Spoity and Apple Music).

    press release here:
    http://iheartmedia.com/Pages/iHeartM...adio-All-.aspx

    they did announce the 2 paid tiers by name, it will be iHeartRadio Plus and iHeartRadio All Access (they may face a lawsuit from rival CBS due to their TV side having the name All Access as their TV streaming service brand).

    i think IHR Plus will be the $5 service and the All Access will be the $10 dollar one in terms of price, and no iHeartRadio has not announced their payment prices yet.

    also do expect the free customize stations to start adding a skip limit where it you get passed it, you either have to listen to the next song by no choice or get a ad break in between songs to open the next batch of songs to be able to skip.

  6. #6
    The free customized stations on iHeartRadio already limit your skips to six per hour.

  7. #7
    "The terrestrial radio business has been in turmoil in recent years as streaming services, including Pandora, Spotify and Apple, steal away listeners. IHeart has the additional issue of $21 billion in debt and stagnant revenue over the six months ended June 30."

    The thing about it is that the financial problems with radio have nothing to do with any audience losses. The financial problems predate streaming, and are due to a decision to take the company private in 2008. The debt hasn't really increased at all since then. Revenue is stagnant because the audience hasn't changed. In fact, statistically, there has only been a 1% loss of audience in the last ten years. People use streaming services IN ADDITION to traditional radio, and quite often the agenda for their music playlists come from what's new and popular on the radio. Streaming services have crippled the digital download business, which is down a lot in the last three years. Streaming is replacing buying. But to say they "steal away listeners" is overstating the facts.

  8. #8
    The thing about entering streaming radio is that the enterprise is performing worse than terrestrial. Look at Pandora's share price the past couple years with stagnant user growth and zero profitability. Apple bought Beats at a huge premium expecting to leverage it into a Spotify competitor but the service has not met expectations. Tidal by Jay-Z has been underwhelming too.

    iHeart's problems stem from too much debt, not from horrendous financial results. Throwing a splashy "tech" innovation which happens to be cash poor onto that makes matters worse, not better unless iHeart can throttle the streaming industry. I don't think it can.

  9. #9
    Quote Originally Posted by Grant Dossetto View Post
    Throwing a splashy "tech" innovation which happens to be cash poor onto that makes matters worse, not better unless iHeart can throttle the streaming industry. I don't think it can.
    I agree. But I give them props for at least giving it a try. They're not letting their debt interfere with innovation.

  10. #10

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    Meanwhile Lew Dickey says that Broadcasters will have a tough road competing with New Media. Lew failed with RDIO doing the same thing IHeartRadio is planning on launching.

    http://nypost.com/2016/09/25/radio-b...ex-execs-book/

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